Scope 3 category 15: investments

Category 15 "is applicable to investors (i.e., companies that make an investment with the objective of making a profit)". It is "designed primarily for private financial institutions (e.g., commercial banks)", but any company with investments not already in its Scope 1 and 2 should screen it. It is part of the 15 Scope 3 categories.

Investment types

The guidance divides investments into four types: equity investments, debt investments, project finance, and managed investments and client services. Debt investments with a known use of proceeds are required; those without a known use are optional.

Allocation by share

Emissions are allocated in proportion to the investment. For equity investments, the investment-specific formula is the sum over investments of the investee's Scope 1 and 2 emissions × your share of equity (%).

Example: you hold 10% of a company whose Scope 1 and 2 emissions are 5,000 tonnes CO2e. Your category 15 emissions from that holding are 500 tonnes.

Methods

• Investment-specific: "collecting scope 1 and scope 2 emissions from the investee company" and allocating by share.
• Average-data: "using revenue data combined with EEIO data to estimate" the investee's emissions when it does not report them, then allocating by share.

Relation to consolidation

Subsidiaries and joint ventures that are inside your organisational boundary are already in your Scope 1 and 2. Category 15 covers the investments outside that boundary. Under the equity share approach, the boundary itself already follows equity, so check that nothing is counted twice.

For non-financial companies

Most operating companies have little in category 15: perhaps minority stakes or pension-fund-style holdings. Screen it, report what is material, and justify the rest.