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Scope 3.8: Upstream leased assets

Learn how the Greenhouse Gas (GHG) Protocol defines Scope 3.8 emissions, how the protocol recommends calculating them and how they are actually calculated in Climate Reporting

How are Scope 3.8 emissions defined in the GHG Protocol?

Scope 3.8 covers emissions from the operation of assets that are leased by the reporting company and not already included in the reporting company’s Scope 1 or Scope 2 inventories. Leased assets may be included in a company’s Scope 1 or Scope 2 inventory depending on the type of lease and the consolidation approach the company uses to define its organisational boundaries (See section titled “Organisational boundaries” in this support article).

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. A reporting company’s Scope 3 emissions from upstream leased assets include the Scope 1 and Scope 2 emissions of lessors (depending on the lessor’s consolidation approach).

​​How does the GHG Protocol recommend calculating Scope 3.8 emissions?

Companies may use one of the following methods to calculate Scope 3.8 emissions, listed from highest to lowest accuracy: asset-specific, lessor-specific or average-data method.

  1. Asset-specific method
    • This method involves collecting asset-specific fuel and energy use or Scope 1 and Scope 2 emissions data.
    • Possible activity data includes:
      1. Asset-specific Scope 1 and 2 emissions data OR
      2. Asset-specific fuel and electricity, steam, heating and cooling use AND
      3. If applicable, data related to non-combustion emissions (i.e., industrial process or fugitive emissions).
    • Possible data sources can include:
      1. Utility bills, meter readings
      2. ERP system
      3. Purchase records
    • Emission factors needed:
      1. Site-specific emission factors for energy sources (e.g., electricity and fuels) per unit of consumption(e.g., kg CO2e/kWh for electricity, kg CO2e/liter for diesel)
      2. Emission factors of fugitive and process emissions
  2. Lessor-specific method
    • This method involves collecting the Scope 1 and Scope 2 emissions from lessor(s) and allocating emissions to the relevant leased asset.
    • It is relevant in cases where, for example, office space is leased in a building that is not sub-metered.
    • Possible activity data includes:
      1. Allocation share of asset (Total area/volume/quantity of the reporting company’s leased assets)
      2. Lessor’s total Scope 1 and 2 emissions data OR
      3. Lessor’s total fuel use and electricity use
      4. If applicable, data related to non-combustion emissions (i.e., industrial process or fugitive emissions).
    • Possible data sources can include:
      1. Lease agreements
      2. Utility bills
      3. Meter readings
    • Emission factors needed:
      1. Site-specific emission factors for energy sources (e.g., electricity and fuels) per unit of consumption(e.g., kg CO2e/kWh for electricity, kg CO2e/liter for diesel)
      2. Emission factors of fugitive and process emissions
  3. Average-data method
    • This method involves multiplying secondary data (such as building floor area, vehicle engine type) by relevant industry-average emission factors.
    • The average-data method should be used when purchase records, electricity bills, or meter readings of fuel or energy use are not available or applicable.
    • Possible activity data includes:
      1. Floor space of each leased building
      2. Number of leased buildings, by building type (e.g., office, retail, warehouse, factory, etc.)
      3. Number and type of leased assets other than buildings that give rise to Scope 1 or Scope 2 emissions (e.g., company cars, trucks).
    • Possible data sources can include:
      1. Research papers
      2. National statistics databases
    • Emission factors needed:
      1. Average emission factors by floor space, expressed in units of emissions per square meter, square foot occupied (e.g., kg CO2e/m2/year)
      2. Average emission factors by building type, expressed in units of emissions per building (e.g., kg CO2e/small office block/year)
      3. Emission factors by asset type, expressed in units of emissions per asset (e.g., kg CO2e/car/year).

How are Scope 3.8 emissions calculated in Climate Reporting?

Climate Reporting applies an “operational control” organisational boundary for greenhouse gas accounting. Consequently, emissions from most leased assets operated by the reporting company are categorised under Scope 1 and Scope 2.

The main exception is leased office space, which is calculated under Scope 3.8 using the spend-based method. Climate Reporting identifies relevant rent and premises-related transactions from connected accounting data and uses these as input for the calculation. The specific account mapping depends on the company’s accounting setup and is maintained separately. More information about accounting setup and account mapping is available in the “Smart accounting practices” article.

Calculation logic

  • The customer’s financial data is made available to Climate Reporting, where relevant information for calculating greenhouse gas emissions is extracted. This includes transactions from relevant accounts, together with the following data fields for each transaction
    • Account ID (as defined in the ERP)
    • SAF-T Account ID and version
    • Amount (in a defined currency)
    • The date the purchase was made
  • Climate Reporting maintains a mapping between SAF-T accounts and GHG Scope categories. All financial accounts mapped to Scope 3.8 are identified, and the transactions mapped to these accounts are extracted.
  • For each SAF-T account, the net monthly amount is calculated by summing all relevant transactions. Each account is also linked to a specific emission factor based on the type of purchases recorded in that account.
  • The aggregated transaction values are then multiplied by the relevant emission factors to calculate greenhouse gas emissions. Note that the calculated emissions are low accuracy since they are estimated using the spend-based method.

How are Scope 3.8 emissions displayed in Climate Reporting ?

App

In the app, total Scope 3.8 emissions are displayed in the dashboard under the “Emissions by category” card and reported in tonnes CO2e per year. More detailed Scope 3.8 emissions breakdowns are planned for future releases.

Report

In the report, Scope 3.8 emissions are presented as a monthly breakdown in the “Emissions by Scope” tab and reported in tonnes CO2e. Additional detailed Scope 3.8 emissions data is currently under development and will be available in an upcoming release.