Reducing Scope 3 Emissions Leased Assets 

June, 2022 - Shoosmiths LLP

A summary of the key takeaways from a recent webinar on reducing scope 3 leased assets emissions.

Shoosmiths is delighted to be sponsoring United Nation Global Compact Network (UNGC) UK’s series of webinars on ‘Reducing Scope 3 Emissions’.


The event featured guest speakers: Olwen Smith, Global Lead, Transition Accelerator, CDP, and member of the Science Based Targets initiative’s (SBTi) Corporate Engagement Team; Fernanda Amemiya, Sustainability Director, Landsec; and Karl Desai, Senior Advisor – Advancing Net Zero, UK Green Building Council.


  • Categories 8 and 13 of the Greenhouse Gas Protocol’s Corporate Value Chain Accounting and Reporting (Scope 3) Standard address Scope 3 emissions associated with a company’s upstream and downstream leased assets in the reporting year. 
  • As per the Greenhouse Gas Protocol’s Technical Guidance, emissions arising from both upstream and downstream leased assets can be calculated by using one of three methods:
    • Asset-specific method, which involves collecting site-specific fuel and energy use data, or Scope 1 and Scope 2 emissions data from individual leased assets.
    • Lessor-specific method (lessee specific method for downstream calculations), which involves collecting the Scope 1 and Scope 2 emissions from lessor(s) / lessee(s) and allocating emissions to the relevant leased asset(s) / lessee(s). 
    • Average data method, which involves estimating emissions for each leased asset, or groups of leased assets, based on average data, such as average emissions per asset type or floor space.
  • Emissions from leased assets may be included in Scope 1 and 2, rather than Scope 3, depending on the type of lease. Appendix A (page 125) of the Greenhouse Gas Protocol’s Scope 3 Standard should be referred to for more information on this. 
  • The UK Green Building Council has created a guide for businesses to help measure and reduce downstream Scope 3 leased asset emissions in commercial real estate. Retrieving data on tenant emissions is a key challenge in calculating emissions in this category, so modelling can be a useful option to estimate tenant data. 
  • Calculating emissions from co-working spaces can be challenging due to the implications of shared occupancy. If possible, sub-meters should be used and the lessee should report these emissions as Scope 1 and 2, and the lessor should report the emissions as downstream Scope 3 leased asset emissions. If this is not possible, a proportional energy usage approach should be used to calculate electricity and fuel usage. The lessor can account for these emissions in their Scope 1 and 2 data, and the lessee would report these emissions as upstream Scope 3 leased asset emissions.
  • Landlords should communicate and cooperate with customers to increase the amount of collected primary tenant data. This reduces the reliance on modelling for emissions data, thus increasing the accuracy of emissions reporting. Landlords can engage customers in several ways:
    • Raising awareness through customer events and competitions (such as the CUBE competition which brings landlords, building managers, and occupiers together to reduce their climate impact by improving energy performance in their buildings).
    • Conducting one on one customer meetings to investigate their needs and how they can be helped to reduce emissions.
    • Collaborating with customers to provide in-depth energy assessments and workshops to identify energy efficiency opportunities within their spaces. 
  • Green leases are an effective way in which both tenants and landlords can agree to share data and collaborate to reduce leased asset emissions.

Resources referenced during the event

  • Category 13 Technical Guidance
  • Category 8 Technical Guidance
  • CUBE Competition
  • Greenhouse Gas Protocol’s Corporate Value Chain Accounting and Reporting Standard
  • Information on Green Leases
  • Information on Sub-Meters 
  • Landsec’s Net Zero Carbon Pathway
  • UK Green Building Council’s Guide to Scope 3 Reporting in Commercial Real Estate

To register for other events in the ‘Reducing Scope 3 Emissions’ webinar series, please visit our website.


 



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