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Climate Reporting

Methods, calculations and data sources

The GHG Protocol

In this article, you will get a thorough introduction to the GHG Protocol and what the different scopes mean in practice

The Greenhouse Gas Protocol (GHG Protocol) is the world's most widely used framework for measuring, managing and reporting greenhouse gas emissions. It helps companies quantify their climate emissions, and take concrete steps to reduce them. It’s recommended to use the protocol for calculating emissions under sustainability reporting regulations like CSRD (details under the reporting standard ESRS E1-6: Greenhouse gas emissions), and voluntary standards like VSME and Environmental Lighthouse.

Organisational boundaries

The first step is to define the organisational boundaries, a concept that is used to determine which parts of the organisation (subsidiaries, business units, joint ventures) are included in the organisation’s GHG inventory. The GHG Protocol offers two primary approaches for setting organisational boundaries:

Equity Share: A company accounts for GHG emissions based on its proportion of equity or ownership in the operation, reflecting its economic interest and exposure to risks and rewards. Example: If an organisation owns 70% of a power plant, it reports 70% of the plant’s emission its GHG inventory
Control Share: A company accounts for 100% of GHG emissions from operations it controls, either financially or operationally, but not for operations where it only holds an interest. There are two different approaches under control share:
- Financial Control: Account for operations where the company can direct financial and operating policies to gain economic benefits.
- Operational Control: Account for operations where the company has full authority to implement operating policies, either directly or through a subsidiary.

Here is an example scenario to help understand how the different approaches work in practice: An investor (lets name it SunVest) partners with a company (lets call it RayOps) to operate a solar farm (aptly named BrightField). SunVest owns 70% of BrightField, while RayOps owns 30%. SunVest has financial control over BrightField, meaning it directs financial and operating policies. However, day-to-day operations are managed by RayOps, giving it operational control. BrightField emits 1000 tonnes of CO₂ annually (from maintenance activities and vehicles).

Under the equity share approach,
- SunVest reports 700 tonnes of CO2 emissions (proportional to its stake)
- RayOps reports 300 tonnes of CO2 emissions (proportional to its stake)
Under the operational control approach
- SunVest does not report any emissions (since it does not control operations)
- RayOps reports 1000 tonnes of CO2 emissions (as it controls operations)
Under the financial control approach
- SunVest reports 1000 tonnes of CO2 emissions (as it has financial control)
- RayOps does not report any emissions (since it does not have financial control)

Climate Reporting uses the operational control approach, as it is most commonly used by SMEs and is in line with how they typically run their business. This approach is not well suited for investors or financial institutions.

Operational boundaries

After determining organisational boundaries, the reporting company must set operational boundaries. This involves identifying emissions associated with its operations, and categorising them as direct and indirect based on the relationship between the organisation and the emission source. Direct GHG emissions are emissions from sources that are owned or controlled by the company. Indirect GHG emissions are emissions that are a consequence of the activities of the company but occur at sources owned or controlled by another company. What is classified as direct and indirect emissions is dependent on the organisational boundary selected (equity share or control). These choices are pre-set in Climate Reporting.

To help distinguish between direct and indirect emission sources and improve transparency in value chains, the GHG Protocol further defines three “scopes” to categorise direct and indirect emissions:

Scope 1: Direct greenhouse gas emissions from sources owned or controlled by the reporting company
Scope 2: Indirect emissions from the generation of purchased energy (electricity, steam, heating, or cooling) consumed by the organization
Scope 3: Other indirect emissions occurring in the organisation’s value chain, including upstream and downstream activities, such as supply chain emissions, business travel, or the use of sold products.

Let's take a closer look at the three scopes and their subcategories to help get you started!

Scope 1 - Direct greenhouse gas emissions from self-owned assets

What is included in this category?

Scope 1 includes direct greenhouse gas emissions from sources owned or controlled by the reporting company. These emissions result from activities that the organization has direct control over and include, for example:

Combustion of fuels: Emissions from burning fossil fuels in company-owned or controlled equipment, such as boilers, furnaces, vehicles, or generators.
Process emissions: Emissions released during industrial processes, such as chemical production, manufacturing of materials etc.
Fugitive emissions: Unintentional releases of GHGs from equipment or facilities, such as leaks from refrigeration systems or methane emissions from oil and gas production.

These emissions are often the easiest to reduce because the company itself has control over the sources. Examples of measures to reduce emissions can be:

Replace fossil fuels with electric or biofuel-powered vehicles.
Optimizing energy use in own facilities.
Maintain and upgrade refrigeration and air conditioning to reduce leaks.

Is this category included in Climate Reporting? If so, how is it calculated?

Yes, this category is included in Climate Reporting. These emissions can be calculated using one of two approaches:

Activity-Based Method: Uses activity data in physical units (e.g., liters, kWh, or m³ of fuel consumed). Converts the data into CO₂-equivalents using life cycle assessment (LCA)-based emission factors.
Spend-Based Method: Uses monetary data (e.g., money spent on fuels) extracted from the company’s ERP system or energy bills. Converts the spend data into CO₂-equivalents using spend-based emission factors.

In Climate Reporting, we provide the option of activity-based emission calculations, and default to spend-based in the absence of any input from the user. In activity-based emission calculations, activity data in physical units (litres/kWh/m³ of fuel consumed) is transformed into CO₂-equivalents using LCA-based emission factors. In spend-based emission calculations, spend data of different fuels is extracted from the company’s ERP system or energy bills and transformed into CO₂-equivalents using spend-based emission factors.

Since we use the operational control approach for GHG accounting, direct emissions from the operation of the assets (leased or owned) always come under scope 1.

What grounds do I have to skip this category?

It is not recommended to skip this category as it is included even in the simplified VSME reporting standard (disclosure B3). If you need to comply with CSRD you will have to assess whether GHG emissions (ESRS disclosure E1-6) are material or not, and if they are, you must include scope 1.

Scope 2 - Indirect greenhouse gas emissions from the consumption of purchased energy

What is included in this category?

Scope 2 includes indirect greenhouse gas emissions from the consumption of purchased electricity, heating, steam and cooling by the reporting company. These emissions occur at the facility where the energy is generated, but they are attributed to the company that consumes the energy. The GHG Protocol provides two methods for calculating scope 2 emissions:

Location-based: Reflects the average emissions intensity of the grid where the energy consumption occurs.

Market-based: Reflects emissions based on the energy procurement choices of the organization, such as purchasing renewable energy certificates (RECs) or directly sourcing green energy.

Unlike scope 1 emissions, scope 2 emissions are indirect since the company does not own or operate the energy production facility. However, they are directly linked to the company’s energy use and are considered within its operational control.

Is this category included in Climate Reporting? If so, how is it calculated?

Yes, this category is included in Climate Reporting. Similar to Scope 1, emissions can be calculated in two ways:

Activity-Based Method: Uses physical consumption data (e.g., kWh). Converts the data into CO₂-equivalents using life cycle assessment (LCA)-based emission factors.
Spend-Based Method: Uses monetary data (e.g., energy bills) extracted from the company’s ERP system. Converts the spend data into CO₂-equivalents using spend-based emission factors.

We provide the option of activity-based emission calculations, and default to spend-based, in the absence of any input from the user. In activity-based emission calculations, energy consumed in physical units (kWh) is transformed into CO₂-equivalents using LCA-based emission factors. We use the emission factor for physically delivered electricity calculated by NVE for this. In spend-based emission calculations, money spent on purchased energy is extracted from the company’s ERP system or energy bills and transformed into CO₂-equivalents using spend-based emission factors.

Since we use the operational control approach for GHG accounting, the emissions from purchased energy always come under scope 2 no matter if the assets which consume the energy are self-owned or leased.

If the reporting company rents or leases an asset (like a building) and the energy bill is included in the lease or rental fee, then the emissions from purchased energy will not show up in scope 2. Instead they will be accounted for under a scope 3 category 8 (upstream leased assets).

Note that we currently only support the location-based method to calculate emissions.

What grounds do I have to skip this category?

It is not recommended to skip this category as location-based energy emissions are included even in the simplified VSME reporting standard (disclosure B3). If you need to comply with CSRD, you will have to assess whether GHG emissions (ESRS disclosure E1-6) are material or not, and if they are, you must include both location- and market-based scope 2 emissions.

Scope 3 - Indirect greenhouse gas emissions that occur along a company’s value chain

Scope 3 includes other indirect greenhouse gas emissions caused by company activities, both upstream and downstream, but from sources outside its ownership or control. These emissions often represent the largest share of an organization’s carbon footprint, as they encompass a wide range of activities outside direct operational control. The GHG Protocol breaks scope 3 into 15 categories, divided into upstream and downstream activities.

What grounds do I have to skip this category?

Small- and medium sized companies (according to the accounting act definition) are not directly affected by CSRD and can potentially skip scope 3 emissions entirely. Scope 3 is currently not included in the VSME standard but some work is expected on scope 3 for Environmental Lighthouse and other certifications.

Companies that must comply with CSRD could still postpone work on scope 3 for one year if they have less than 750 employees (see ESRS Appendix C on phased-in disclosures).

Many stakeholders like lenders, owners and investors require companies to keep track of scope 3 emissions, regardless of their size and legal requirements.

Category 3.1: Purchased goods and services

What is included in this category?

Includes all upstream (i.e., cradle-to-gate) emissions from the production of products and services purchased or acquired by the reporting company in the reporting year. Companies may find it useful to differentiate between purchases of production-related products (e.g., materials, components, and parts) and non-production-related products (e.g., office furniture, office supplies, and IT support).

Is this category included in Climate Reporting? If so, how is it calculated?

Yes, this category is included in Climate Reporting. One can use different methods to calculate emissions from this category:

Supplier-specific method – collects product-level cradle-to-gate GHG inventory data from suppliers, like from Environmental Product Declarations (EPDs) or Digital Product Passports (DPPs). This method cannot cover all purchases.
Average-data method – estimates emissions for goods and services by collecting data on the mass (e.g., kilograms or pounds), or other relevant units of goods or services purchased, and multiplying this number with the relevant secondary (e.g., industry average) emission factors. As an example you get average emissions per unit of good.
Spend-based method – estimates emissions for goods and services by collecting data on the economic value of goods and services purchased and multiplying it by relevant secondary (e.g., industry average) emission factors. As an example you get average emissions per monetary value of goods.

The first method – supplier-specific – requires the reporting company to collect data from the suppliers, whereas the other two methods – average-data and spend-based – use secondary data (i.e. industry averages). Collecting data directly from suppliers adds considerable time and cost burden to conducting a scope 3 inventory, and is therefore less preferred in many cases.

In Climate Reporting, we use the spend-based method, extracting economic value of purchased goods and services from a company’s ERP system and multiplying it with relevant spend-based emission factors from EXIOBASE to calculate emissions in this category.

What grounds do I have to skip this category?

This category accounts for the majority of emissions for most companies. Therefore, it is not recommended to skip this category if you choose to report on scope 3.

Category 3.2: Fixed assets

What is included in this category?

Includes all upstream (i.e., cradle-to-gate) emissions from the production of capital goods purchased or acquired by the reporting company in the reporting year.

Emissions from the use of capital goods by the reporting company are accounted for in either scope 1 (e.g., for fuel use) or scope 2 (e.g., for electricity use), rather than in scope 3.

In certain cases, there may be ambiguity over whether a particular purchased product is a capital good (to be reported in category 3.2) or a purchased good (to be reported in category 3.1). Companies should follow their own financial accounting procedures to determine whether to account for a purchased product as a capital good in this category or as a purchased good or service in category 3.1.

It is important to note that leased assets under a financial lease end up in the balance sheet and emissions from the production are counted in category 3.2, whereas emissions from the production of leased assets under an operating lease are not to be reported by the lessee.

It is important to note that if a reporting company has a leased asset under a financial lease, the asset is recorded on the company's balance sheet, and the emissions from its production fall under Category 3.2. Conversely, if the asset is under an operating lease, the asset is not recorded on the balance sheet and the emissions from its production should be reported by the actual owner of the asset, as an operating lease confers operational control but not ownership.

Is this category included in Climate Reporting? If so, how is it calculated?

This category is currently not included in Climate Reporting. The calculation methods for category 3.2 is the same as category 3.1.

In financial accounting, capital goods are typically depreciated or amortized over the life of the asset. For purposes of accounting for scope 3 emissions, companies should not depreciate, discount, or amortize the emissions from the production of capital goods over time. Instead companies should account for the total cradle-to-gate emissions of purchased capital goods in the year of acquisition, the same way the company accounts for emissions from other purchased products in category 3.1.

What grounds do I have to skip this category?

In years when a company does not purchase any assets, it is not obligated to report emissions under this category. If the company has assets under an operating lease, the emissions from the production of the asset are responsibility of the reporting company.

Category 3.3: Fuel and energy related activities not included in scope 1 or scope 2

What is included in this category?

Includes emissions related to the production of fuels and energy purchased and consumed by the reporting company in the reporting year that are not included in scope 1 or scope 2. Category 3.3 excludes emissions from the combustion of fuels or electricity consumed by the reporting company because they are already included in scope 1 or scope 2. This category includes emissions from four activities:

Activity	Description	Applicability
Upstream emissions of purchased fuels	Extraction, production, and transportation of fuels consumed by the reporting company. Examples include coal mining, gasoline refining, etc.	Applicable to end users of fuels.
Upstream emissions of purchased energy services	Extraction, production, and transportation of fuels consumed in the generation of electricity, steam, heating, and cooling that is consumed by the reporting company. Examples include mining of coal, refining of fuels.	Applicable to end users of electricity, steam, heating, and cooling services.
Transmission and distribution (T&D) losses	Generation (upstream activities and combustion) of electricity, steam, heating, and cooling that is consumed (i.e., lost) in a T&D system – reported by end user.	Applicable to end users of electricity, steam, heating, and cooling.
Generation of purchased electricity that is sold to end users	Generation (upstream activities and combustion) of electricity, steam, heating, and cooling that is purchased by the reporting company and sold to end users – reported by utility company or energy retailer.	Applicable to utility companies and energy retailers.

Is this category included in Climate Reporting? If so, how is it calculated?

This category is currently not included in Climate Reporting. One may use either of the following methods to calculate emissions from this category:

Supplier-specific method, which involves collecting data on upstream emissions (extraction, production, and transportation) of fuel consumed from fuel providers and transmission and distribution losses in the electricity grid from electricity providers.
Average-data method, which involves estimating emissions by using secondary (e.g., industry average) emission factors for upstream emissions per unit of consumption (e.g., kg CO₂e/kWh).

What grounds do I have to skip this category?

This category typically has a small contribution to the total emissions of a company, and therefore, can be excluded.

Category 3.4: Upstream transport

What is included in this category?

Includes emissions from transportation and distribution services purchased by the reporting company (either directly or through an intermediary) from their suppliers, in vehicles not owned or operated by the reporting company.

Emissions from transportation in vehicles owned or controlled by the reporting company are accounted for in either scope 1 (for fuel use), or in the case of electric vehicles, scope 2 (for electricity use).

Emissions from leased vehicles operated by the reporting company not included in scope 1 or scope 2 are accounted for in scope 3, category 8 (Upstream leased assets).

Emissions from transportation of employees to and from work are accounted for in scope 3, category 7 (Employee commuting).

Emissions from transportation of employees for business-related activities in vehicles owned or operated by third parties are accounted for in scope 3, category 6 (Business travel).

Is this category included in Climate Reporting? If so, how is it calculated?

Yes, this category is included in Climate Reporting. One may use the following methods to calculate emissions from this category:

Fuel-based method, which involves determining the amount of fuel consumed (i.e., scope 1 and scope 2 emissions of transport providers) and applying the appropriate emission factor for that fuel.
Distance-based method, which involves determining the mass, distance, and mode of each shipment, then applying the appropriate mass-distance emission factor for the vehicle used.
Spend-based method, which involves determining the amount of money spent on each mode of transport and applying secondary (Environmentally extended input–output analysis or EEIO) emission factors.

Obtaining data for the fuel-based and distance-based methods is often difficult and time consuming. In Climate Reporting, we use the spend-based method, extracting the economic value of purchased transportation and distribution services from a company’s ERP system and multiplying it with relevant emission factors from EXIOBASE to calculate emissions in this category.

What grounds do I have to skip this category?

This category often has a small contribution to the total emissions of a company, and therefore, can be simplified or excluded.

Category 3.5: Waste disposal and treatment from operations

What is included in this category?

Includes emissions from third-party disposal and treatment of waste generated in the reporting company’s owned or controlled operations in the reporting year, including disposal of both solid waste and wastewater.

This category includes emissions from the disposal and treatment of purchased goods and materials (gate-to-grave) that are discarded as waste. Emissions from the production of purchased goods are included in category 3.1, and emissions from the use of purchased goods are included in scope 1 or 2. As a result, the whole lifecycle emissions (cradle-to-grave) of all purchased goods and services are covered.

Note that a GHG Protocol report will not reveal directly how much waste is produced by the reporting company. It is therefore recommended to keep track of the amount of waste and prioritise initiatives that address the underlying causes of waste. Waste management emissions are often small and immaterial compared to the other life cycle stages.

Treatment of waste generated in operations is categorized as an upstream scope 3 category because waste management services are purchased by the reporting company.

Waste treatment activities may include:

Disposal in a landfill
Disposal in a landfill with landfill-gas-to-energy (generating electricity from the gas)
Recovery for recycling
Incineration
Composting
Waste-to-energy (combustion of municipal solid waste to generate electricity)
Wastewater treatment

Is this category included in Climate Reporting? If so, how is it calculated?

This category is currently not included in Climate Reporting. One may use the following methods to calculate emissions from the waste generated in their operations:

Supplier-specific method which involves collecting waste-specific scope 1 and scope 2 emissions data directly from waste treatment companies (e.g., for incineration, recovery for recycling).
Waste-type-specific method which involves using emission factors for specific waste types and waste treatment methods.
Average-data method which involves estimating emissions based on total waste going to each disposal method (e.g., landfill) and average emission factors for each disposal method.

What grounds do I have to skip this category?

This category typically has a small contribution to the total emissions of a company, and therefore, can be excluded.

Category 3.6: Business travel

What is included in this category?

Includes emissions from the transportation of employees for business-related activities in vehicles owned or operated by third parties, such as aircraft, trains, buses, and passenger cars. Companies may optionally include emissions from business travelers staying in hotels.

Emissions from leased vehicles operated by the reporting company not included in scope 1 or scope 2 are accounted for in scope 3, category 8 (Upstream leased assets).

Emissions from transportation of employees to and from work are accounted for in scope 3, category 7 (Employee commuting).

Is this category included in Climate Reporting? If so, how is it calculated?

Yes, this category is included in Climate Reporting. One may use one of the following methods to calculate emissions from business travel:

Fuel-based method, which involves determining the amount of fuel consumed during business travel (i.e., scope 1 and scope 2 emissions of transport providers) and applying the appropriate emission factor for that fuel.
Distance-based method, which involves determining the distance and mode of business trips, then applying the appropriate emission factor for the mode used.
Spend-based method, which involves determining the amount of money spent on each mode of business travel transport and applying secondary (EEIO) emission factors.

In Climate Reporting, we use the spend-based method, extracting the economic value of purchased travel services from a company’s ERP system and multiplying it with relevant emission factors from EXIOBASE to calculate emissions in this category.

What grounds do I have to skip this category?

This category accounts for a large share of emissions for most companies. Therefore, it is not recommended to skip this category.

Category 3.7: Employee commuting

What is included in this category?

This category includes emissions from transporting employees between their homes and workplaces. Companies may include emissions from teleworking (i.e., employees working remotely) in this category.

Is this category included in Climate Reporting? If so, how is it calculated?

This category is not in Climate Reporting. One may use one of the following methods to calculate emissions from employee commuting:

Fuel-based method, which involves determining the amount of fuel consumed during commuting and applying the appropriate emission factor for that fuel
Distance-based method, which involves collecting data from employees on commuting patterns (e.g., distance travelled and mode used for commuting) and applying appropriate emission factors for the modes used
Average-data method, which involves estimating emissions from employee commuting based on average (e.g., national) data on commuting patterns

What grounds do I have to skip this category?

For smaller companies, this category can be skipped since the emissions will be insignificant due to fewer employees. This category is often excluded since obtaining data can be difficult.

Category 3.8: Upstream leased assets

General note on leased assets

When leasing assets (building space, equipment or vehicles), companies must decide how to account for and report GHG emissions associated with these assets. Whether the emissions are categorized as scope 1, scope 2 or scope 3 for a company depends on the selected organisational boundary approach (equity share, financial control or operational control) and the type of lease.

The first step is to understand the two ways to account for leases:

Finance or capital lease
- This type of lease gives the lessee ownership and operational control of an asset.
- Emissions associated with fuel consumption of the asset are scope 1, and purchased electricity emissions are scope 2, irrespective of the organizational boundary approach.

Operating lease
- This type of lease enables the lessee to operate an asset, like a building or vehicle, but does not grant ownership of the asset. Any lease that is not a finance or capital lease is an operating lease.
- The lessee has operational control but not ownership of the leased asset. Therefore, how emissions are categorized depends on the organisational boundary selected. Under equity share or financial control approach, emissions are scope 3 (indirect). Under operational control approach, fuel combustion emissions are scope 1 (direct), and purchased electricity emissions are scope 2 (indirect)

What is included in this category?

Includes emissions from the operation of assets that are leased by the reporting company in the reporting year and not already included in the reporting company’s scope 1 or scope 2 inventories.

If the reporting company leases an asset for only part of the reporting year, it should account for emissions for the portion of the year that the asset was leased.

Is this category included in Climate Reporting? If so, how is it calculated?

To calculate emissions from upstream leased assets, one may use either of two methods:

Asset-specific method, which involves collecting asset-specific (e.g., site-specific) fuel and energy use data and process and fugitive emissions data or scope 1 and scope 2 emissions data from individual leased assets
Lessor-specific method, which involves collecting the scope 1 and scope 2 emissions from lessor(s) and allocating emissions to the relevant leased asset(s)
Average data method, which involves estimating emissions for each leased asset, or groups of leased assets, based on average data, such as average emissions per asset type or floor space.

Since in Climate Reporting we apply the operational control approach, the emissions from upstream leased assets are usually categorised under scope 1 and 2. If any of those emissions cannot be clearly attributed to scope 1 or 2, we instead use the spend-based method, extracting the economic value of the energy consumed and report it under category 3.8. This applies for example to the energy use of leased office spaces, in cases where furnaces, district heating and electricity are included in the lease and therefore cannot be split out into scope 1 and 2 emissions.

What grounds do I have to skip this category?

If a company does not lease assets, this category can be skipped. If applying the operational control approach, emissions from this category are accounted for under scope 1 or 2 instead.

Category 3.9: Downstream transport and distribution

What is included in this category?

Includes emissions that occur from the transportation and distribution of sold products in vehicles and facilities not owned or controlled by the reporting company. Category 3.9 includes only emissions from transportation and distribution of products after the point of sale. This category also includes emissions from retail and storage. A reporting company’s scope 3 emissions from downstream transportation and distribution include the scope 1 and scope 2 emissions of transportation companies, distribution companies, retailers, and (optionally) customers.

Emissions from downstream transportation and distribution can arise from transportation/storage of sold products in vehicles/facilities not owned by the reporting company. In this category, companies may include emissions from customers traveling to and from retail stores, which can be significant for companies that own or operate retail facilities

Is this category included in Climate Reporting? If so, how is it calculated?

This category is not in Climate Reporting. The emissions are calculated in the same way as category 3.4

What grounds do I have to skip this category?

Emissions from downstream categories are hard to quantify and can be skipped unless they make a significant contribution to the company’s total emissions.

Category 3.10: Processing of sold products

What is included in this category?

Includes emissions from processing of sold intermediate products by third parties (e.g., manufacturers), subsequent to sale by the reporting company. Intermediate products are products that require further processing before use, and therefore cause emissions from processing subsequent to sale by the reporting company and before use by the end consumer.

In certain cases, the eventual end use of sold intermediate products may be unknown. For example, a company that produces an intermediate product with many potential downstream applications, each of which has a different GHG emissions profile, may be unable to reasonably estimate the downstream emissions associated with these various end uses.

Is this category included in Climate Reporting? If so, how is it calculated?

This category is currently not included in Climate Reporting. To calculate emissions from processing of sold products, one may use either of two methods:

Site-specific method, which involves determining the amount of fuel and electricity used and the amount of waste generated from processing of sold intermediate products by the third party and applying the appropriate emission factors
Average-data method, which involves estimating emissions for processing of sold intermediate products based on average secondary data, such as average emissions per process or per product.

In many cases, collecting primary data from downstream value chain partners may be difficult. In such cases, it is preferred to use the average-data method.

What grounds do I have to skip this category?

This category is only relevant for companies that manufacture intermediate products. Emissions from downstream categories are hard to quantify and can be skipped unless they make a significant contribution to the company’s total emissions.

Category 3.11: Use of sold products

What is included in this category?

Includes emissions from the use of goods and services sold by the reporting company in the reporting year. A reporting company’s scope 3 emissions from use of sold products include the scope 1 and scope 2 emissions of end users. End users include consumers and business customers using end products.

In category 3.11, companies are required to include direct and indirect use-phase emissions of sold products. Companies may optionally include emissions associated with maintenance of sold products during use.

Is this category included in Climate Reporting? If so, how is it calculated?

This category is currently not included in Climate Reporting. Calculating emissions from category 3.11 typically requires product design specifications and assumptions about how consumers use products (e.g., use profiles, assumed product lifetimes). Companies are required to report a description of the methodologies and assumptions used to calculate emissions.

What grounds do I have to skip this category?

This category is only relevant for companies that manufacture products that release emissions during their use-phase (cars, electrical appliances, oil and gas) .

Category 3.12: Waste disposal and treatment from sold products

What is included in this category?

Includes emissions from the waste disposal and treatment of products sold by the reporting company in the reporting year.

Is this category included in Climate Reporting? If so, how is it calculated?

This category is currently not included in Climate Reporting. Calculating emissions from category 3.12 requires assumptions about the end-of-life treatment methods used by consumers. Companies are required to report a description of the methodologies and assumptions used to calculate emissions.

The emissions from downstream end-of-life treatment of sold products should follow the calculation methods in category 5 (Waste generated in operations). The major difference between calculating upstream and downstream emissions of waste treatment is likely to be the availability and quality of waste activity data. Whereas the reporting company likely has specific waste type and waste treatment data from its own operations, this information is likely to be more difficult to obtain for sold products.

What grounds do I have to skip this category?

This category is only relevant for companies that manufacture products that release emissions during their waste management phase. Data for this category is often difficult to obtain, and therefore, this category can be excluded.

Category 3.13: Downstream leased assets

What is included in this category?

Includes emissions from the operation of assets that are owned by the reporting company (acting as lessor) and leased to other entities in the reporting year that are not already included in scope 1 or scope 2. This category is applicable to lessors (i.e., companies that receive payments from lessees).

Is this category included in Climate Reporting? If so, how is it calculated?

This category is currently not included in Climate Reporting. The calculation method for this category is the same as category 3.8 Upstream Leased Assets.

What grounds do I have to skip this category?

This category is only relevant for companies that lease assets to other companies.

Category 3.14: Franchises

What is included in this category?

Includes emissions from the operation of franchises not included in scope 1 or scope 2. A franchise is a business operating under a license to sell or distribute another company’s goods or services within a certain location. Franchisors should account for emissions that occur from the operation of franchises (i.e., the scope 1 and scope 2 emissions of franchisees) in this category.

Is this category included in Climate Reporting? If so, how is it calculated?

This category is currently not included in Climate Reporting. One may use either of two methods to calculate emissions from franchises:

Franchise-specific method, which involves collecting site-specific activity data or scope 1 and scope 2 emissions data from franchisees
Average-data method, which involves estimating emissions for each franchise, or groups of franchises, based on average statistics, such as average emissions per franchise type or floor space.

What grounds do I have to skip this category?

This category is only relevant for companies that own franchises.

Category 3.15: Investments

What is included in this category?

Includes scope 3 emissions associated with the reporting company’s investments in the reporting year, not already included in scope 1 or scope 2. This category is applicable to private financial institutions (e.g., commercial banks), but is also relevant to public financial institutions (e.g., multilateral development banks, export credit agencies) and other entities with investments not included in scope 1 and scope 2.

The GHG Protocol divides financial investments into four types:

Finance investment	Description	GHG accounting approach
Equity investments	Equity investments made by the reporting company using the company’s own capital and balance sheet.	Financial services companies should account for scope 1 and 2 emissions from equity investments using the equity share consolidation approach. If not included in scope 1 or 2, account for them proportionally in scope 3, category 15.
Debt investments (with known use of proceeds)	Corporate debt holdings held in the reporting company’s portfolio, including corporate debt instruments (such as bonds) or commercial loans.	Account for proportional scope 1 and scope 2 emissions of relevant projects that occur in the reporting year in scope 3, category 15 (Investments).
Project finance	Long-term financing of projects as either an equity or debt investor.	Same as above.
Debt investments (without known use of proceeds)	General corporate purposes debt holdings (such as bonds or loans) held in the reporting company’s portfolio.	Scope 1 and scope 2 emissions of the investee that occur in the reporting year in scope 3, category 15 (Investments).
Managed investments and client services	Investments managed by the reporting company on behalf of clients.	Scope 3, category 15.
Other investments or financial services	All other types of investments, financial contracts, or financial services not included above (e.g., pension funds).	Scope 3, category 15.

Is this category included in Climate Reporting? If so, how is it calculated?

This category is not in Climate Reporting. To calculate emissions from investments, one may use the following methods:

Investment-specific method, which involves collecting scope 1 and scope 2 emissions from the investee company and allocating the emissions based upon the share of investment
Average-data method, which involves using revenue data combined with EEIO data to estimate the scope 1 and scope 2 emissions from the investee company and allocating emissions based upon share of investment.

What grounds do I have to skip this category?

This category is mostly applicable to private and public financial institutions, and can be skipped for companies in other sectors.