Equity Share Approach
The equity share approach is a GHG Protocol consolidation method where an organisation accounts for greenhouse gas emissions in proportion to its percentage ownership stake in each operation or entity — reporting 60% of emissions from a 60%-owned joint venture, for example.
What is Equity Share Approach?
The equity share approach allocates emissions to the reporting organisation based on its economic interest in each entity within its portfolio. If the organisation owns 100% of a subsidiary, it reports 100% of that subsidiary's emissions. If it owns 50% of a joint venture, it reports 50%. This proportional allocation reflects the financial risks and rewards associated with ownership.
The equity share percentage used should reflect the organisation's share of economic risks and rewards, which typically corresponds to the ownership percentage recorded in financial statements. In most cases, this is straightforward: a 75% ownership stake means reporting 75% of emissions. For more complex structures — such as partnerships, trusts, and special purpose vehicles — the equity share should align with the entity's share of underlying economic value.
The equity share approach has several advantages. It aligns naturally with financial reporting and investor expectations, since equity ownership is a well-understood concept. It captures emissions proportional to economic exposure, making it relevant for investment-focused stakeholders. And it avoids the "all or nothing" effect of the control approaches, where a slight majority or minority stake can determine whether 100% or 0% of an entity's emissions are reported.
The main disadvantage is that it can be complex to administer, especially for organisations with many partially owned entities. It also means reporting a share of emissions from operations you may not manage or be able to directly influence — which can create a disconnect between your reported footprint and your ability to drive reductions.
The equity share approach is most commonly used in sectors with extensive joint venture activity: oil and gas, mining, real estate development, infrastructure, and private equity. The GHG Protocol, SECR, and SBTi all accept the equity share approach as a valid consolidation method.
Practical Examples
An energy company owns 40% of a gas-fired power station and 70% of a wind farm. Under equity share, it reports 40% of the power station's emissions and 70% of the wind farm's emissions.
A real estate investor with equity stakes ranging from 25% to 100% across 20 properties reports emissions proportional to each stake, yielding a portfolio-weighted carbon footprint.
A private equity firm allocates emissions from its portfolio companies in proportion to its ownership share in each, providing investors with a view of the climate risk attributable to their investment.
How Climatise Helps
Climatise supports the equity share approach by allowing you to configure ownership percentages for each entity in your portfolio. The platform automatically applies proportional allocation to all emission sources and consolidates the results into a single inventory.
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