Building emissions scope attribution decision tree.
Scope attribution of direct and indirect emissions resulting from operating a building depend on several parameters:
The consolidation approach (equity share, financial control, operational control)
The type of lease (operating lease, financial/capital lease)
If you own the building, rent it, lease it, if you are a non-lessor investor or if you are a lender
Default Approach
The most commonly used consolidation approach is the operational control one. This is the approach used by Greenly. The vast majority of leases are operating leases.
Difference between an Operating vs Capital Lease
Difference between an Operating vs Capital Lease
By default, the company occupying the building (whether it's the owner or the lessee) has operational control over the building and accounts for 100% of emissions resulting from the building as Scope 1 and Scope 2 (+ upstream energy emissions in Scope 3). Not having operational control must be justified and documented.
A lessor accounts for emissions in Scope 3 category downstream leased assets. An investor or lender in Scope 3 category investments.
Operational control
Operational control
According to the GHG Protocol, "a company has operational control over an operation if the former or one of its subsidiaries has the full authority to introduce and implement its operating policies at the operation."
"It should be emphasized that having operational control does not mean that a company necessarily has authority to make all decisions concerning an operation. Operational control does mean that a company has the authority to introduce and implement its operating policies."
Decision tree - Operational control approach
BEGES: French regulatory guidelines
GHGP: Greenhouse Gas Protocol
Corresponding scope 1, 2 & 3 emissions means that:
Direct GHG emissions and indirect emissions linked to energy consumption must be taken into account.
Scope 3 emission detailed in the first box, i.e. Extraction, production and transport of fuels, T&D losses and infrastructure must be taken into account (emissions associated with manufacturing and construction are optional for the GHGP).
Other Use Cases
For more details on other consolidation approaches and types of lease, you can read the following documents: