Scope 3 category 8: upstream leased assets

Category 8 "includes emissions from the operation of assets that are leased by the reporting company in the reporting year" and are not already in its Scope 1 and 2. It is part of the 15 Scope 3 categories.

Scope 1 and 2 or category 8?

The guidance says "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 organizational boundaries".

In practice:

• If you use the operational control approach and you operate the leased office, warehouse or vehicle, its energy use is normally already in your Scope 1 and 2. Category 8 is then empty for that asset.
• Category 8 catches leased assets whose emissions you have not put in Scope 1 and 2, for example under a financial control or equity share approach, or where the landlord pays the energy bills and recharges you.

State which approach you use; the same lease can land in different places for two companies.

Methods

• Asset-specific: "collecting asset-specific (e.g., site-specific) fuel and energy use data", then applying the usual fuel and electricity factors.
• Lessor-specific: "collecting the scope 1 and scope 2 emissions from lessor(s) and allocating" them to the asset you lease.
• Average data: "estimating emissions for each leased asset, or groups of leased assets", for example from floor area and typical energy use per square metre.

Typical case: a serviced office

A company rents space in a building where the landlord buys the electricity and gas and includes them in the service charge. Ask the landlord for your share of kWh (by floor area or sub-meter). Calculate it with the electricity and fuel calculators and report it in category 8, or, if you treat the space as under your operational control, in Scopes 1 and 2. Do not report it in both.