1. INTRODUCTION ........................................................................................................................... 1
2. CONTEXT ..................................................................................................................................... 2
3. COMMON CONCEPTS IN GHG ACCOUNTING ................................................................................ 2
3.1 Operational Boundaries............................................................................................................... 3
3.2 Organizational Boundaries .......................................................................................................... 4
4. RECOMMENDATIONS .................................................................................................................. 5
4.1 Owners......................................................................................................................................... 5
4.2 Managers ..................................................................................................................................... 6
4.3 Tenants ........................................................................................................................................ 6
5. APPENDIX .................................................................................................................................... 8
5.1 Scenario A: Industrial Building..................................................................................................... 8
5.2 Scenario B: Commercial Office Building ...................................................................................... 8
5.3 Scenario C: Commercial Retail Building....................................................................................... 9
1. INTRODUCTION The goal of this document is to provide guidance to those
As a result of rising concerns regarding the impact of climate responsible for quantifying greenhouse gas emissions in the
change, many entities have completed a ‘greenhouse gas commercial real estate industry. This guidance is not
inventory’ or ‘carbon footprint’ – effectively accounting for intended to be exhaustive; rather, its aim is to support
the greenhouse gas emissions that are emitted due to their building professionals in completing greenhouse gas
daily operation. Some of these carbon footprints are inventories in the absence of specific compliance or
required by law – for instance, certain facilities in Alberta are voluntary guidance (for instance, a Canadian federal cap
compelled to report their greenhouse gas emissions
annually, under the Climate Change and Emissions
Management Act. In a multi-tenant building, with
multiple owners, and a property
Greenhouse gas accounting, like financial accounting, manager, and some sub-metering…
involves many rules that can be complex to navigate. These
rules are also open to interpretation, especially in the
Whose emissions are they?
commercial building sector, where there are infinite
combinations of physical and operating characteristics – for and trade system, or The Climate Registry, respectively).
instance, an industrial building is often built and operated in Furthermore, there are many different approaches or
a very different manner than an office building. variations on those recommended here that fit within
Furthermore, there are often numerous stakeholders generally accepted greenhouse gas accounting principles;
involved at a given commercial property, each of which may ultimately, the reporting entity is alone responsible for
wish to complete a carbon footprint, and each of which could justifying the greenhouse gas accounting approach
reasonably expect to be ‘responsible’ for that property’s employed.
With the context above in mind, we recommend that (where an organization can publically post their inventory)
building owners and managers follow the financial and have their own specific requirements. These requirements
operational control approaches respectively, as described in are sometimes called ‘protocols’, and provide exact
the following discussion. At the completion of this instructions for quantifying GHG emissions; others, such as
document, the reader should have an appreciation for the ISO 14064‐1, are more conceptual.
complexities of greenhouse gas accounting, knowledge of
the critical factors involved in accounting for greenhouse The International Organization for Standardization (ISO) is
gases in the commercial building sector, and the ability to the world’s largest developer and publisher of international
apply suggested guidance to their portfolio. standards. In 2006, ISO 14064 ‐ an international standard for
GHG management activities ‐ was completed, including the
development of emission inventories (ISO 14064‐1), and the
2. CONTEXT verification of those inventories (ISO 14064‐3). It outlines
Greenhouse gas (GHG) inventorying and accounting is minimum requirements and provides a structure against
becoming more common, across sectors and geographies. which auditing of inventories may be performed. In general,
Debate surrounds the question of how best to reduce the ISO 14064 provides non‐specific guidance and a high‐level
concentration of GHG in our atmosphere – in particular, the framework for companies who wish to complete and verify
merits of a carbon tax or a cap & trade system are often their GHG inventories and projects.
compared. Two cap & trade bills are currently being
considered in the United States1, which, if signed into law, ISO 14064‐1 itself directs users to the World Business Council
would require certain industries to meet absolute emission for Sustainable Development (WBCSD) / World Resources
targets; the Canadian government has indicated that it Institute (WRI) Greenhouse Gas Protocol (GHG Protocol), and
intends to follow whatever path the United States chooses. encourages the use of this reference for more specific
guidance. The WRI was launched in 1982 as a policy research
Apart from any regulatory requirements, many stakeholders and analysis centre to address global resource and
in the commercial building sector are beginning to complete environmental issues , and along with the WBCSD, has
their GHG inventories. These inventories can be used for a worked to develop international accounting tools for
variety of purposes; to assess financial risk associated with a greenhouse gas emissions, including the authoritative
price of emissions, to inform and drive operational Greenhouse Gas Protocol, Corporate Accounting and
improvements, and to benchmark against peer companies. Reporting Standard (The GHG Protocol).5 ISO 14064‐1 and
For instance, REALpac itself has recently released an array of The GHG Protocol are consistent with the best‐practice GHG
research reports on this topic, including A Guide to Corporate accounting principles below:
Responsibility and Sustainability Reporting in the Canadian
Real Property Sector.2 Furthermore, a number of Canadian • RELEVANT ‐ The carbon footprint appropriately reflects
property management companies have completed their GHG the GHG emissions of the company and serves the
inventories, including Oxford Properties Group, Cadillac decision‐making needs of its users.
Fairview and Bentall LP. • COMPLETE ‐ Accounts for and reports on all GHG
emission sources and activities within the chosen
While standardized approaches to GHG accounting exist, the inventory boundary. Discloses and justifies any specific
field is evolving rapidly, and conflicting or unclear guidance is exclusions.
common. The commercial building sector is particularly
• CONSISTENT ‐ Uses consistent methodologies to allow
complex in this way, due to the number of entities involved,
for meaningful comparisons of emissions over time.
and the operational and physical diversity of commercial
Transparently documents any changes to the data,
inventory boundary, methods, or any other relevant
factors in the time series.
3. COMMON CONCEPTS IN GHG • TRANSPARENT ‐ Addresses all relevant issues in a
ACCOUNTING factual and coherent manner, based on a clear audit
trail. Discloses any relevant assumptions and makes
There are a range of documents and standards that provide
GHG accounting guidance to organizations that measure,
quantify and report their Carbon footprint. Many registries ISO 14064, International Standard for GHG Emissions Inventories and Verification, Jay
Wintergreen and Tod Delaney, First Environment, Inc, Boonton, NJ, presented at 16th
Annual International Emission Inventory Conference, Raleigh, NC, 2007.
The Waxman-Markey Bill was approved by the House of Representatives in mid-2009, www.wri.org
while the substantially similar Boxer-Kerry Bill was released in the fall of the same year. World Business Council for Sustainable Development / World Resources Institute.
This memorandum may serve to provide further guidance to section ENV3: Emissions of Greenhouse Gas Protocol, Corporate Accounting and Reporting Standard. April 2004.
the Guide. www.ghgprotocol.org
appropriate references to the accounting and company, while indirect GHG emissions are a consequence of
calculation methodologies and data sources used. activities of the company, but occur at sources owned or
• ACCURATE ‐ Ensures that the quantification of GHG controlled by a different entity. When completing their
emissions is systematically neither over nor under actual carbon footprint, companies should separately account for
emissions, as far as can be judged, and that and report on Scope 1 and 2 at minimum (i.e. the emissions
uncertainties are reduced as far as practicable. Achieves that they are ‘responsible’ for). Examples of how some
sufficient accuracy to enable users to make decisions emission sources are categorized are provided in Figure 1.
with reasonable assurance as to the integrity of the
reported information. Energy related data is the backbone of quantifying GHG
emissions for stakeholders in the commercial building sector
– emissions associated with heating (natural gas, fuel oil,
In order to understand what emissions sources should be
etc), cooling (electricity) and powering (electricity) the
included, and to determine what entity is responsible for
building fleet likely make up the majority of the emissions for
their accounting, ‘boundaries’ must be selected and
that stakeholder. Therefore, quality information on the
evaluated. The operational and organizational boundaries
energy use of the buildings themselves is critical to
work in tandem to define the scope of the carbon footprint.
completing a GHG inventory.
There are three separate categories with respect to
Scope 3 is an optional category that represents emissions
allocating emissions from the operation of commercial
that occur as a consequence of a company’s activities, which
buildings: owners, managers and tenants. Adding to the
are from sources that are not owned or controlled by the
complexity of GHG accounting, a company may be more than
company. While optional, quantifying Scope 3 emissions
one of these categorizations concurrently (for instance own,
may be a useful tool for increasing the efficiency of company
manage and occupy a facility) or across a portfolio (own
operations. For commercial buildings specifically, Scope 3
some buildings, manage others). Furthermore, there may be may include emissions resulting from the construction of the
multiple companies categorized in the same way for a facility building or waste generated annually. For company
(several building owners with separate tenants on each floor, inventories, common Scope 3 emissions include those from
for instance). air travel and employee commuting. In circumstances where
a company owns or manages a facility but does not report
3.1 Operational Boundaries the associated emissions as Scope 1 or Scope 2 (because for
reasons discussed in this document, that company is not
In GHG accounting, emissions are classified broadly as direct
considered directly responsible), these emissions may be
(Scope 1), energy indirect (Scope 2), and indirect emissions
included under Scope 3, in keeping with the principles of
from other indirect sources (Scope 3) ‐ please see Figure 2 for
completeness and transparency.
a general illustration of these scopes. Direct GHG emissions
result from sources that are owned or controlled by the
Figure 1: Description of Scoped Emissions
Scope 1 (Direct emissions):
• On‐site combustion of fossil fuels (e.g. natural gas or heating oil for space heating, diesel
combustion from emergency generators).
• Mobile fuel consumed due to the operation and maintenance of the building and property
(e.g. fleet and maintenance vehicles)
Scope 2 (Indirect emissions associated with the consumption of electricity):
• Electricity or steam consumption at the facility (or deep lake water cooling).
Scope 3 (Other indirect emissions):
• Waste disposal
• Building construction
Complexities arise in GHG accounting in the commercial building sector for two reasons. First, classifying emissions into Scope
1 or Scope 2 is highly dependent upon the organizational boundary determined by the company, which is in turn dependent
upon the consolidation approach used (equity, financial or operational, as described in the next section). However, the
selection of the consolidation approach is open to a variety of interpretations, and so a consistent approach may not be used by
all building stakeholders. Furthermore, interpretation of guidance must often occur within each consolidation approach.
Figure 2: Representation of Scopes
Image from The GHG Protocol.
Second, when more than one entity includes the same Consolidation
emissions under Scope 1 or Scope 2, ‘double counting’ occurs Approach
– for instance, if both the owner and manager, or co‐owners Account for percentage of GHG
of the same building were to include the GHG emissions due Equity emissions according to equity share
from the same building in their carbon footprints, the same ownership of the building.
emissions would be counted twice. However, double Account for 100 percent of GHG
counting of emissions is not a significant concern unless the emissions where the company has the
emission inventories of each stakeholder are being Operational
authority to implement operational
aggregated, and/or the reporting of emissions is regulated – policies at the building.
in which case, the appropriate approach would be dictated Account for 100 percent of GHG
by the regulatory authority (such as a government). emissions where the company retains
the majority of the risks and rewards of
3.2 Organizational Boundaries ownership of the building.
A company should select an organizational boundary Under the equity consolidation approach, a company
consolidation approach for consolidating GHG emissions and accounts for its share of the GHG emissions from a building
then consistently apply that approach to determine which under Scope 1 and Scope 2, according to its share of financial
GHG emissions are included or excluded from their carbon equity in that building. The equity share reflects economic
footprint. Once a consolidation approach has been chosen, it interest ‐ the extent to which a company has a right to risks
should be applied consistently across all company operations and rewards from the building.
included in the carbon footprint.
Under the operational consolidation (control) approach, a
Good practice guidance from The GHG Protocol suggests that
company reports 100% of the building emissions under
the organizational boundary may be defined using either the
Scope 1 and Scope 2 if it has the full authority to introduce
equity share or control approach (the latter of which is
and implement its operating policies at the building.
further subdivided into financial control or operational
However, having operational control does not mean that a
control). For simplicity, we refer to these consolidation
company necessarily has the authority to make all decisions
approaches as equity, financial and operational; they are
concerning an operation… it does mean that a company has
summarized in the table below.
the authority to introduce and implement its operating approach in order to avoid double counting; however, this is
policies. unlikely to occur, given the range and breadth of
stakeholders often involved with even one commercial
…but what REALpac recommends is The best‐practice accounting principles (relevance,
that building owners use the completeness, consistency, transparency, and accuracy)
should be considered throughout the process of quantifying
financial consolidation approach, a carbon footprint. Due to the complexity of the commercial
and building managers use the building sector, interpretation of GHG accounting guidelines
operational consolidation approach. is often required. When interpretation is required, providing
more ‐ rather than less ‐ contextual information and
justification (Transparency, Completeness) in the carbon
Using the financial consolidation (control) approach, a footprint pertaining to the scoping of emissions is always
company should account for 100% of the GHG emissions recommended.
from a building under Scope 1 and Scope 2 if it has the ability
to direct the financial and operating policies of that 4.1 Owners
building…a company is considered to have financial control
of an operation if it retains the majority risks and rewards of In the commercial building sector, we recommend that
ownership of the building.7 In practice, the financial control building owners use the financial consolidation approach,
approach means that the entity that is receiving the financial as it is the clearest and most transparent of the available
benefit from the operation of the building is, alone, options for the commercial building sector. In addition, due
responsible for the emissions from the operation of the to their similarity (both are subsets of the control approach),
building. and in the context of commercial buildings, there is rarely a
distinction between the operational and financial
Several common representative scenarios are described consolidation approaches for owners.
below as further guidance. Because interpretations of GHG
accounting guidance will differ, it is critical that sufficient As demonstrated by the scenarios appended to this
justification and context is provided in the carbon footprint document, there are some instances where a building owner
report to allow users of the information to interpret the may not have direct financial control over a specific activity
results correctly, and maintain the best‐practice principles of in the building ‐ for instance, the building in question could
transparency and completeness. be an industrial facility, where utility costs are paid and
4. RECOMMENDATIONS In a situation where the owner pays
As discussed above, companies are free to select the for the utility costs directly and does
organizational boundary approach that best suits their needs not charge them back to individual
when voluntarily reporting their GHG emissions. Double
counting may occur if different consolidation approaches
tenants based on sub-metered
are used, but this factor is not critical in the absence of consumption, the emissions belong
regulated reporting requirements. When considering which to the owner.
organizational approach best suits your needs it is important
to question the level of control you hold over decisions that
will influence emissions and consider which approach best operational decisions that affect energy consumption are
reflects your level of control. made directly by the tenant.
This section provides recommendations regarding which Where sub‐metering of tenants occurs, the party that is
consolidation approach would ideally be used by each directly responsible for the utility costs is a reasonable
stakeholder category with respect to commercial buildings. method for determining control. For instance, if an owner
Ideally, all stakeholders would utilize the same consolidation installed electrical sub‐metering for each tenant, and the
tenants were responsible for payment of the electricity
Adapted from The GHG Protocol.
Ibid. A good description of these GHG accounting approaches, please see Chapter 3 of The
8 Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard. World
It is important to note that multiple companies may report the same emissions under
Resources Institute/World Business Council for Sustainable Development. The
Scope 3; however, this is not considered double counting as Scope 3 is reserved for Greenhouse Gas Protocol is widely considered as the benchmark standard in GHG
those emissions that are not the direct responsibility of that company. accounting practice. See http://www.ghgprotocol.org/standards/corporate-standard.
consumed, then it is far less likely that the owner is
responsible for any associated emissions (however, in these 4.3 Tenants
cases the owner would still be responsible for emissions
associated with the operation of common spaces, outdoor We recommend that owners and managers treat emissions
lighting, etc.) as the tenant’s emissions if sub‐metered and either paid
directly by or charged back to the tenant.
Tenants require certain information from building owners
We recommend that commercial building managers utilize and/or managers in order to complete their carbon footprint,
the operational consolidation approach, although this could such as their electricity consumption. Regardless of the
lead to double counting with owners if the building owners consolidation approach used, individual GHG inventories
are reporting their emissions using the financial could then note any possibility of double counting.
consolidation approach from the same building. However,
double counting is a less critical problem than having neither Ideally, building owners and managers will communicate to
party counting the emissions, in the absence of regulatory their tenants:
requirements. a) Their consolidation approach (equity, financial or
It should be noted that having operational control does not b) Which sources of emissions are treated as Scope 1
mean that a company necessarily has authority to make all and Scope 2
decisions concerning the operation of a building (such as c) Energy consumption (electricity, natural gas, etc) of
capital spending authority). Operational control does mean that tenant (if required, pro‐rated based on share
of total rentable space)
In a situation where the
management company has the In a building with sub-metered
authority to direct the financial and utilities paid directly by the tenant
operating policies of the building, it or charged back to the tenant, the
is the manager’s emissions. If the emissions are the tenant’s
manager pays for the utility costs responsibility.
directly and/or can direct the
operational policies of the building, It is important to note that often more than one tenant
the manager most likely has control. occupies a given building. In these cases, the reported
emissions should correspond with each tenants’ share of the
building’s emissions, in the event that a tenant’s share of the
that a company has the authority to introduce and utilities are sub‐metered and charged directly to the tenant
implement its operating policies. From a commercial or sub‐metered by the owner/manager and charged back to
building manager’s perspective, it is important to consider to the tenant.
what extent daily management responsibilities can influence
building operational and investment decisions, as well as The table on the next page provides a summary of the
where financial responsibility for utility costs lie. general guidance regarding reporting responsibilities for
Scope 1 and Scope 2, based on the perspective of the owner,
manager, or tenant.
Scope 1 (Direct) Scope 2 (Indirect)
Consolidation Sub‐metering of Direct: On‐site/owned emission sources (e.g. combustion of fossil
Stakeholder Indirect: Imported electricity, steam, other heat or cooling. (e.g.
Approach utilities for occupants? fuels like natural gas, use of fuel in grounds equipment,
electricity used by the building)
replacement of refrigerants)
No Equity share of all emissions. Equity share of all building emissions.
Yes Equity share of allocated emissions. Equity share of allocated emissions.
Owners No 100% of all emissions. 100% of all emissions.
Yes 100% of allocated emissions. 100% of allocated emissions.
No 100% of all emissions. 100% of all emissions.
Yes 100% of all allocated emissions. 100% of all allocated emissions.
No 100% of all emissions. 100% of all emissions.
Yes 100% of all allocated emissions. 100% of all allocated emissions.
No None None
Yes None. None.
No None. None.
Yes 100% of allocated emissions. 100% of allocated emissions.
No None. None.
Yes 100% of allocated emissions. 100% of allocated emissions.
In cases where a building management company has the authority to introduce and implement operating policies at the building, the owner may not be responsible for the emissions; rather, they would be the responsibility of the building management company. Ideally, the building
owners and managers would communicate their intentions on this topic to each other; otherwise double-counting of emissions may occur.
or manager is directly responsible for the fuel costs
associated with these activities (i.e. they purchase the fuel
5. APPENDIX directly), then the associated emissions are their
responsibility. However, if the landscaping company supplies
5.1 Scenario A: Industrial Building the fuel, then these emissions would be expected to be the
responsibility of the landscaping company – in this case, the
A company owns a building being used by a single tenant for
owner or manager may categorize these emissions as Scope
an energy‐intensive manufacturing operation. The tenant
receives all utility bills directly and owns the equipment used
in the facility.
Best‐practice GHG accounting principles should be kept in
Owner: The owner does not have the authority to introduce mind when interpreting consolidation guidance. In this case,
and implement its operating policies; therefore, emissions the emissions from this operation do not reflect the GHG
from the operation of this building would not be the emissions of the company (Relevance). To ensure
responsibility of the owner, other than emissions associated completeness and transparency, the owner should provide a
with common areas (for instance, if there are multiple justification for the exclusion of these emissions in their
tenants of the building, then emissions associated with carbon footprint report.
common hallways and lighting for parking lots and garages
would be the responsibility of the owner). 5.2 Scenario B: Commercial Office Building
Tenant: Because the tenant is responsible for and receives Three companies, one a majority owner, own an office
all of the utility bills associated with this property, the tenant building occupied by multiple tenants. The individual tenants
would be expected to report emissions from this building as are not sub‐metered, and the majority owner is responsible
Scope 1 and Scope 2. for the utility bills and has final authority for decisions
concerning the building; a management company operates
this building on behalf of the owners, but does not have the
authority to introduce and implement its operating policies
In a typical industrial building, the without approval of the majority owner.
tenant will most often be
Owner: The majority owner has the ultimate authority over
responsible for the emissions building decisions, and is responsible for the utility costs;
associated with the activities of that furthermore, no sub‐metering occurs. Therefore, the
majority owner of the building would be expected to include
building. However, the owner or
all emissions from this facility in its carbon footprint,
manager may be responsible for categorized as Scope 1 or Scope 2.
emissions from common areas (such
Management: While the management company is
as hallways and parking garages) if responsible for the day‐to‐day operation of the building, it
those emissions are separately billed likely does not have operational control, as it does not have
the authority to implement its operating policies, and must
to the landlord.
respond to the needs of its clients, the owners. Therefore,
the management company would not be expected to report
these emissions as Scope 1 or Scope 2, although they may be
The entity responsible for the utility bills can be a useful
categorized as Scope 3, in keeping with the GHG accounting
indicator of control when interpreting the consolidation
principles of transparency and completeness.
approaches. In this case, the manufacturing facility uses
significant amounts of energy and is financially responsible
However, if the management company was able to introduce
for the use of the energy, resulting in GHG emissions which
and implement its operating policies and/or was responsible
are not considered the responsibility of the owner.
for the utility costs, then it may have operational control of
the building. In this case, the management company would
The utility bill indicator can also be useful when determining
categorize the emissions from the building as Scope 1 and
responsibility for sources of emissions that may be
Scope 2. A management company’s control over a building
categorized under Scope 1 or Scope 2, other than those
is a judgment call that should be based on the applicable
associated with heating, cooling and powering the building
guidance (such as the GHG Protocol). Furthermore, a
itself. For instance, a building owner or manager may hire a
management company may have operational control over
landscaping company to cut lawns, plow driveways and
some, but not all of the buildings under its management – in
collect leaves. In these circumstances, if the building owner
this scenario, the management company would only be responsible for those emissions. Ideally, the owner and
responsible for reporting those emissions over which it has management company would communicate their intentions
control under Scope 1 or Scope 2 (similar to the owners). In regarding the GHG accounting approach in these cases.
this case, double counting of these emissions would occur if
both the owner and the management company reported In addition, it is recommended that emissions from common
building emissions as Scope 1 and Scope 2. areas (e.g. hallways) be allocated to the owner or manager
(in the case that the management company has operational
Tenant: While the tenants may have some operational control), based on the principles of completeness and
control in their space (for instance, the tenant may be able transparency. Care should be taken to treat buildings (that
have similar characteristics) consistently across a portfolio,
in keeping with GHG accounting principles. As always, the
In a multi-tenant, non-sub- inclusion of contextual information and justification for
metered office building, the allocation decisions in the carbon footprint report, where
interpretation is required, is highly recommended.
owner will be responsible for the
associated emissions. Where sub- 5.3 Scenario C: Commercial Retail Building
metering occurs (and is charged
One company owns a large retail facility occupied by multiple
back), the tenants are responsible tenants. The individual retail units are sub‐metered for
for those emissions; however, the electricity, and each tenant is responsible for their own
electricity bills. In addition, each tenant is able to configure
owner and/or manager will still be and install lighting and other electricity‐consuming
responsible for emissions from the equipment. A management company operates the building
on behalf of the owners, and has the authority to introduce
operation of common areas (such
and implement operational policies at the building.
as lighting for hallways and
parking garages). In the case that Owner: Because the owner does not financially or
operationally control the electrical operation of each unit
both the owner and manager take and does not receive the electricity bills, emissions from the
responsibility for the emissions, use of electricity in the occupied units would not be
considered the responsibility of the owner. However,
double counting will occur.
heating for the building is not sub‐metered, and is centrally
controlled by the manager. Based on the recommended
turn the lights in their area on or off) they do not have the financial consolidation approach, the owner would be
full authority to introduce and implement operating policies; expected to report emissions due to the heating of the
therefore, the emissions from this building would be building as Scope 1. The owner would also be expected to
categorized as Scope 1 or Scope 2 and would be the report all emissions associated electricity use in common
responsibility of the owner, and not the tenant. areas (hallways, outdoor lighting) as Scope 2, as the tenant
would be responsible for electricity use based on sub‐
Interpretation of the operational consolidation approach metering of their rented space.
definition commonly comes into play in this frequently‐
encountered scenario. For instance, some buildings may Manager: In this scenario, the management company likely
provide the occupants with greater control over their has operational control, and therefore, would be expected to
environments (turning lights on or off; thermostat set points) report these emissions using a similar approach as the
others may not. In addition, tenants may or may not be owners (i.e. report all emissions from building heating and
directly responsible to the utility company for those services. emissions from electricity use in common areas as Scope 1 or
In cases where the management company is effectively Scope 2). This will lead to double‐counting of the emissions
responsible for the operation and investment decisions for from this building if the building management company and
the building, then under the operational consolidation the owners both report these emissions as Scope 1 and
approach, the management company would be considered Scope 2.
Tenants: Because their individual areas are sub‐metered for It is also worth noting that in situations where the building
electricity, but not for heating, the tenant would be owner and management are the same company, emissions
responsible for the emissions due to the amount of should be reported using a consistent approach to the
electricity consumed in their unit, but not for the heating of organizational boundary selected. For instance, under
that unit, as that is not individually sub‐metered. Therefore, Scenario C, were the owner and manager the same entity,
the tenants would report their electricity emissions under and that entity uses the financial consolidation approach to
Scope 2, but would not report the emissions associated with report its carbon footprint, the emissions would be reported
building heating under Scope 1 (these emissions may in the inventory of that entity as the owner of the building.
optionally be reported under Scope 3).
In a commercial retail building
with electrical sub-metering,
tenants will be responsible for
the emissions associated with
their electricity use. The owner
and/or manager (if the manager
has operational control) will be
responsible for the emissions
associated with utilities that are
not directly attributed to a tenant
(such as natural gas), and the
emissions associated with
electricity use in the common
areas of the building. Double
counting will occur if the owners
and managers both report these
This scenario can become more complex quite easily; for
instance, if the individual units are sub‐metered for natural
gas consumption, then the tenant would likely be responsible
for the associated emissions. In cases with utility sub‐
metering for individual units, the entity that has financial
responsibility for the utility costs is generally a good indicator
of responsibility for emissions.