Is Category 15 relevant for non-financial companies?

Usually not material. It is primarily designed for banks, asset managers, and insurers. Non-financial companies may have a small Category 15 if they hold equity stakes in joint ventures or associates not consolidated in their main GHG inventory. Conduct a screening to determine materiality.

What methodology should I use for financed emissions?

The PCAF (Partnership for Carbon Accounting Financials) Global GHG Accounting and Reporting Standard is the widely accepted methodology. It provides asset-class-specific guidance for listed equity, corporate bonds, business loans, commercial real estate, mortgages, and sovereign debt.

Investments (Scope 3 Category 15)

Category 15 of Scope 3 covers emissions associated with the reporting company’s financial investments, including equity and debt investments, project finance, and managed investments.

What is Investments (Scope 3 Category 15)?

Category 15 is primarily relevant for financial institutions — banks, asset managers, insurers, and pension funds — whose core business involves investing in or lending to other companies. The concept is that the emissions of investee companies are partly attributable to the investors that finance them.

The Partnership for Carbon Accounting Financials (PCAF) has developed the leading methodology for calculating financed emissions. It allocates investee company emissions to the investor based on the proportion of the investee’s total enterprise value (for equities) or total debt (for loans) that the investor holds.

For non-financial companies, Category 15 is usually only relevant if they hold significant equity investments in subsidiaries or joint ventures not already consolidated in their GHG inventory, or if they provide project finance. For most industrial and service companies, this category is not material.

Practical Examples

An asset manager calculates the financed emissions of its £5 billion equity portfolio using PCAF methodology, weighting each investee’s Scope 1 and 2 emissions by ownership share.

A bank reports the financed emissions of its commercial lending portfolio, focusing on high-carbon sectors (oil and gas, utilities, real estate) that represent the majority of portfolio emissions.

A pension fund estimates Category 15 emissions for its listed equity and corporate bond holdings using company-reported emissions data and PCAF attribution factors.

How Climatise Helps

Climatise supports financial institutions in calculating Category 15 financed emissions using PCAF methodology, portfolio analytics, and investee data integration, enabling alignment with net zero investment commitments.

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