Requirements and guidelines according to the GHG Protocol
Category 3.15 of the Greenhouse Gas (GHG) Protocol includes all indirect GHG emissions associated with a company's financial investments. These emissions relate to investments, equity investments, loans and other investments that are not included in Scope 1 or Scope 2 of the reporting company.
Important requirements
Source identification: Companies should record all financial investments that cause relevant emissions, e.g. equity investments, project financing or loans.
Recording methods: Calculations can be based on financial participation in companies, emissions data from portfolio companies or industry-specific benchmarks.
Emission factors: Use of standardized emission factors from recognized databases such as PCAF (Partnership for Carbon Accounting Financials) or national environmental authorities.
Reporting period: The recorded emissions should be synchronized with the investment and financing periods.
Units: Emissions should be documented per investment category in kg CO2e per monetary unit invested (e.g. kg CO2e/€) or per company invested.
Recording in NetCero
Scope 3.15 Consolidation of already recorded emissions
In NetCero, previously recorded emissions are automatically consolidated and assigned according to 3.15, provided that the activities have been assigned to recording objects that are not under the operational control of the reporting company.
Follow these steps to record emissions from investments in NetCero:
Create activity: record all relevant investments as separate activities in the system.
Assign responsibility: Designate a person responsible for data entry and maintenance.
Assign data entry object: Assign each activity to the correct business unit to ensure clear allocation.
Select emission factors: Users standardized emission factors from the NetCero database or external sources.
Define your own emission factors: Add company-specific factors if more accurate data is available from investments or financing projects.
Document investment data: Record invested amounts or specific emissions data directly in the table within the activity - based on financial reports or portfolio data.
Automatic Emission Calculation: NetCero calculates the emissions per investment and integrates them into the overall balance sheet.
Examples of emissions from investments
Example 1: Company investment
A company holds a 20% stake in a production company whose annual emissions amount to 500,000 tons of CO2e. If the shareholding is calculated on a pro rata basis, the emissions amount to
500,000 tCO2e x 20% = 100,000 tCO2e
Example 2: Project financing
A company finances an infrastructure project with total emissions of 1,000,000 tons of CO2e over the entire term. If the financing accounts for 10% of the project, the allocated emissions are
1,000,000 tCO2e x 10% = 100,000 tCO2e
Example 3: Lending to companies
A financial institution grants loans worth 500 million euros to companies with an average emission factor of 0.05 kg CO2e/€ invested capital. The calculated emissions are:
500,000,000 € x 0.05 kgCO2e/€ = 25,000,000 kgCO2e (25,000 tCO2e)
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