Definition
This category includes emissions from the operation of assets owned by the reporting company (lessors) and rented or leased to other companies in the reporting year that are not already included in Scope 1 or Scope 2.
In some cases, it is not useful for companies to distinguish between products sold to customers (reported in Category 11: Use of goods sold) and products leased to customers (reported in Category 13: Downstream leased assets). In this case, it is possible to recognize leased products in the same way as products sold to customers, i.e. by recognizing the lifetime expected emissions of the products leased in the reporting year.
Accounting for downstream leased assets
There are basically three calculation methods. They are arranged in descending order of accuracy:
- Asset-specific method: Collection of asset-specific fuel and energy consumption data, data on process-related and fugitive emissions as well as data on Scope 1 and Scope 2 emissions from leased assets.
- Lessee-specific method: Collection of Scope 1 and Scope 2 emissions from lessees and allocation of these emissions to the leased assets. The availability and access to information depends on the type of asset. For example, a company that leases vehicles must request fuel or mileage data from the lessees in order to calculate the emissions.
- Average data method: Estimation of emissions for each leased asset based on average data, such as average emissions per asset type.
Plant-specific method:
Required activity data:
- Facility-specific fuel, electricity, steam, heating and cooling consumption.
- If applicable, activity data related to non-combustion emissions (i.e. industrial processes or fugitive emissions).
Required emission factors:
- Site or region-specific emission factors for energy sources (e.g. electricity and fuels) per unit of consumption (e.g. kg CO2 e/kWh for electricity, kg CO2 e/liter for diesel).
- Emission factors for fugitive and process emissions.
Lessee-specific method:
Required activity data:
- Total fuel and electricity consumption of the lessor and the lessor
- Fugitive emissions of the lessor (e.g. from refrigerants)
- Lessor's or lessor's process emissions (if applicable).
Required emission factors:
- Location or region-specific emission factors for energy sources (e.g. electricity and fuels) per unit of consumption (e.g. kg CO2 e/kWh for electricity, kg CO2 e/liter for diesel)
- Emission factors for fugitive and process emissions.
Companies should also collect data on:
- Total area/volume/quantity of the lessor's facilities
- Total area/volume/quantity of the reporting company's leased assets.
Average data method:
Activity data required:
- Estimated emissions based on occupied space by facility/building type (for leased buildings).
- Estimated emissions based on the number and type of facilities leased.
Emission factors required:
- Average emission factors by area expressed in units of emissions per square meter, square foot occupied (e.g., kg CO2 e/m2 /year)
- Average emission factors by building type, expressed in units of emissions per building (e.g., kg CO2 e/small office building block/year)
- Emission factors by type of installation, expressed in emission units per installation (e.g. kg CO2 e/vehicle/year)
Companies should also collect data on:
- Floor area of each leased building
- Number of buildings leased, broken down by building type (e.g. office, retail, warehouse, factory, etc.)
- Number and type of leased assets that are not buildings and result in Scope 1 or Scope 2 emissions (e.g. company car vehicles, trucks).
Data collection
Data sources for consumption data for the system-specific method are:
- Utility bills
- Purchase records
- Meter readings
- Internal IT systems.
Recognition of downstream leased assets in the Climate Hub
There are no predefined activities in the Climate Hub. You can create new activities using the Add own activity button. You can find a detailed description here.
Further information can be found in the Technical Guidance for Calculating Scope 3 Emissions of the GHG Protocol in Chapter 13: Downstream Leased Assets from page 128.