Tenant energy consumption in commercial buildings, whether from lighting, cooling, or plug-in equipment like laptops and printers, presents a critical question for landlords: How should these emissions be allocated and reported under the GHG Protocol? This question becomes even more important as frameworks like the Science-Based Targets initiative (SBTi) and Corporate Sustainability Reporting Directive (CSRD) require detailed reporting and decarbonization strategies. This article explores GHG Protocol guidance on tenant-related emissions and concludes that metering and collaboration between landlords and tenants are essential for accurate reporting and compliance.

 

GHG Protocol Guidance: Reporting Tenant Emissions

 

Under the GHG Protocol, emissions from tenant activities typically fall under Scope 3, Category 13: Downstream Leased Assets for landlords. The specifics of reporting depend on control and metering.

 

Single Meter for Tenant Spaces (Lighting, Cooling, and Equipment Combined Landlord’s Responsibility: When tenant spaces are served by a single meter, the landlord must report all energy consumption within the tenant space under Scope 3, Category 13. This includes emissions from:

 

• Plug-in equipment (e.g., laptops, printers).

• Lighting and cooling within the tenant's space.

 

This aligns with the GHG Protocol Scope 3 Calculation Guidance which requires landlords to account for tenant emissions when operational control is absent.

 

Challenge: Without separate metering, landlords cannot disaggregate tenant-specific emissions, creating complexity in reporting and emissions reduction efforts.

 

Separately Metered Tenant Equipment

 

Landlord’s Responsibility: If plug-in equipment energy use is separately metered, the landlord can exclude these emissions from Scope 3, Category 13, as they are fully under tenant operational control.[1].

 

Landlords only report emissions related to systems they influence, such as shared lighting or HVAC.

 

Tenant’s Responsibility: Tenants assume responsibility for Scope 2 emissions from separately metered equipment, aligning accountability with operational control.

 

Relevance of SBTi and CSRD

 

SBTi Requirements

 

The SBTi for Buildings emphasizes that Scope 3 emissions, including those from tenant energy consumption, must be included in a company’s value chain emissions inventory[2].

 

A clear allocation of emissions through sub-metering allows landlords and tenants to:

 

• Identify high-impact areas (e.g., energy-intensive equipment).

• Collaborate on science-based decarbonization targets for shared spaces and tenant-controlled activities.

 

CSRD Requirements

 

• The CSRD requires landlords to disclose comprehensive Scope 1, 2, and 3 emissions, aligning with EU sustainability frameworks. Tenant emissions are significant in meeting double materiality requirements under the CSRD.

• Sub-metering simplifies the reporting process by providing granular data on tenant energy use, ensuring compliance with CSRD mandates for transparency and accuracy.

 

Sub-Metering and Collaboration as Key Solutions

 

Clarity in GHG Reporting

 

• Single Meter: Requires landlords to report all tenant energy consumption under Scope 3, Category 13, leading to potential over-reporting.

• Sub-Metering: Enables landlords to separate tenant-controlled plug-in equipment emissions (Scope 2 for tenants) from shared systems like HVAC (Scope 3 for landlords), ensuring clear boundaries.

 

Joint Decarbonization Efforts

 

Sub-metering aligns with the collaborative ethos of frameworks like SBTi:

 

• Landlords: Focus on decarbonizing building-wide systems (e.g., transitioning HVAC systems to renewable energy).

• Tenants: Target plug-in equipment energy use through efficiency upgrades and behavior changes.

 

This collaboration supports compliance with CRREM decarbonization pathways, helping buildings meet carbon intensity thresholds and avoid stranded asset risks.

 

Green Leases as a Framework

 

Green leases are emerging as a preferred solution for landlords and tenants to share decarbonization responsibilities:

 

• Landlords commit to energy-efficient infrastructure and renewable energy integration.

• Tenants agree to sustainable operational practices, such as using energy-efficient equipment.

 

These agreements foster transparency and accountability, aiding compliance with both SBTi science-based targets and CSRD disclosure requirements.

 

Conclusion: Collaboration and Metering as the Path Forward

 

From the GHG Protocol perspective, tenant emissions must be reported under Scope 3, Category 13 by landlords unless they are separately metered and fully under tenant control. However, as frameworks like SBTi and CSRD demand detailed reporting and actionable decarbonization strategies, sub-metering and collaboration become critical.

 

Sub-metering provides:

 

• Clear separation of responsibilities for emissions reporting.

• The data needed for landlords and tenants to align their efforts with SBTi targets and CSRD reporting mandates.

 

Collaboration through tools like green leases ensures both parties contribute to decarbonization:

 

• Landlords decarbonize shared systems.

• Tenants reduce emissions from their side.

 

By combining accurate metering and proactive engagement, landlords and tenants can meet regulatory demands, achieve sustainability goals, and future-proof their assets in a low-carbon economy.