What is Scope 3 Category 15: Investments?

Summary

In GHG Protocol terms, Category 15 captures emissions from the operations of investees (companies, projects, funds, or other entities) that are associated with your organisation’s investments. The key concept is attribution: you’re not reporting 100% of an investee’s emissions, but the share that corresponds to your level of ownership or financing (e.g. proportion of equity owned, share of debt provided, or other allocation approaches depending on the asset class). Category 15 generally focuses on “financed emissions” - emissions enabled by capital - and is reported separately from “operational” Scope 1, 2, and upstream Scope 3 categories.

This category can apply beyond banks and investors. Many organisations hold investments such as minority equity stakes, corporate bonds, pension scheme assets, or investments connected to treasury activity. If those holdings are significant, Category 15 becomes relevant to include for a complete value chain footprint.

Examples of Scope 3 Category 15: Investments emissions

What counts depends on how your organisation invests, but common examples include:

• Equity investments: shares in public companies, private equity holdings, minority stakes in other businesses
• Debt investments and lending: corporate bonds, loans, revolving credit facilities, lending to projects or companies
• Project finance: financing for specific infrastructure or developments (e.g. property, energy, transport projects)
• Managed investments: assets in funds (e.g. index funds, actively managed funds), endowments, treasury portfolios (depending on your reporting boundary and approach)
• Pension-related investments: where your organisation has influence or chooses to include these as part of its value chain reporting approach

In simple terms: if you provide capital (directly or via an investment vehicle) and that capital supports activities with emissions, those associated emissions may sit in Scope 3 Category 15.

How to calculate Scope 3 Category 15: Investments emission

Category 15 calculations typically follow a “calculate investee emissions -> attribute a share -> sum across holdings” pattern. Common approaches include:

• Investee-specific (preferred): use the investee’s reported Scope 1 and 2 (and where relevant Scope 3) emissions, then apply an attribution factor based on your ownership share or financing share
• Data-provider or portfolio method: use financed-emissions datasets or portfolio carbon data from asset managers and ESG data providers, aligned to your holdings, then apply the relevant attribution rules
• Modelled or proxy data: where investee emissions aren’t available, estimate emissions using sector averages, revenue-based intensity factors, or economic output proxies, then attribute your share

Key inputs usually include an investment holdings list (asset class, value, issuer/investee identifiers), investee emissions data (or proxies), and a clear allocation method per asset type.

The PCAF standard is an expansion on the GHG Protocol which specifies exactly how to calculate this category in more detail. It includes thing like a PCAF data score which is applied to each calculation based on which method above is used.

How to reduce Scope 3 Category 15: Investments emissions

Because these emissions are linked to capital allocation, reductions come from shifting financing and stewardship decisions over time, for example:

• Engage and influence: set expectations with investees (or fund managers) on transition plans, targets, and disclosure, and track progress year on year
• Rebalance portfolios: reduce exposure to higher-emitting activities and increase exposure to lower-carbon or transition-aligned assets (where this fits your mandate and risk profile)
• Improve data quality first: prioritise better investee emissions data and coverage so you can target the real hotspots (rather than relying on generic averages)
• Use investment policies to lock in change: incorporate climate criteria into investment decision-making, due diligence, and manager selection
• Support real-economy decarbonisation: where possible, direct capital towards credible transition activities (e.g. efficiency upgrades, renewable energy, low-carbon product development) and avoid “paper-only” progress.