Key facts: Scope 3 Category 15 covers financed emissions — the greenhouse gases associated with a company's equity investments, debt, and assets under management. For financial institutions, Category 15 typically represents 95%+ of total corporate emissions. Under CSRD ESRS E1, organisations must disclose all material Scope 3 categories, and Category 15 is almost always material for any entity with a significant investment portfolio.
What Is Scope 3 Category 15?
Category 15, defined in the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard, covers the emissions attributable to an organisation's investments in other entities. Unlike Category 1–14 which cover operational supply chain flows, Category 15 is about financial ownership stakes — you bear a share of your investees' emissions proportional to your financial exposure.
The category is also known as financed emissions and is the primary emissions accounting framework for the financial sector. It applies to equity investments, project finance, corporate loans, bonds, and managed client assets.
Which Organisations Must Report Category 15?
The GHG Protocol is clear that Category 15 is relevant to investors and financial institutions, but it can also apply to non-financial corporates that hold significant stakes in other operating companies. Materiality assessment determines whether disclosure is required.
| Organisation Type | Likely Materiality | Primary Asset Classes |
|---|---|---|
| Commercial banks | Always material | Business loans, project finance, mortgages |
| Asset managers | Always material | Listed equity, corporate bonds, funds |
| Insurance companies | Always material | Investment portfolio + underwriting |
| Pension funds | Always material | Listed equity, bonds, real estate |
| Private equity / VC | Always material | Private equity, venture capital |
| Manufacturers with JVs | Assess materiality | Equity stakes in joint ventures |
| Holding companies | Usually material | Subsidiary equity stakes |
Calculation Method: PCAF Standard
The Partnership for Carbon Accounting Financials (PCAF) Global GHG Accounting and Reporting Standard is the accepted methodology for calculating Category 15 financed emissions. It was developed specifically to operationalise GHG Protocol Category 15 for financial institutions and is accepted by CSRD/ESRS E1 auditors.
The Attribution Factor Formula
The core formula for financed emissions is:
📐 Financed Emissions Formula
Financed Emissions = Attribution Factor × Investee's Scope 1+2 Emissions
Attribution Factor = Outstanding Amount / (Total Equity + Total Debt of Investee)
For a €10M loan to a company with €200M total equity+debt and 50,000 tCO₂e Scope 1+2 emissions: Attribution Factor = 10/200 = 5%. Financed emissions = 5% × 50,000 = 2,500 tCO₂e.
Asset-Class Specific Methods
| Asset Class | Attribution Factor | Emissions Scope |
|---|---|---|
| Listed equity | Outstanding amount / (Market cap + Total debt) | Scope 1+2, optionally Scope 3 |
| Corporate bonds | Outstanding amount / (Market cap + Total debt) | Scope 1+2, optionally Scope 3 |
| Business loans | Outstanding amount / (Total equity + Total debt) | Scope 1+2, optionally Scope 3 |
| Project finance | Outstanding amount / Total project value | Scope 1+2 of the project |
| Mortgages | Outstanding amount / Property value | Energy use intensity × EF |
| Motor vehicles | Outstanding amount / Vehicle value | Fuel consumption × EF |
PCAF Data Quality Score
PCAF requires you to disclose not just the financed emissions figure, but also the data quality score (1–5 scale) for each asset class. This is important under CSRD because auditors will assess the robustness of your disclosure.
| Score | Data Source | Emissions Source |
|---|---|---|
| 1 (Best) | Audited emissions from investee | Investee's verified GHG report |
| 2 | Unaudited reported data | Investee's sustainability report |
| 3 | Third-party estimated | CDP, Bloomberg, MSCI ESG data |
| 4 | Sector-based proxy | Revenue × sector emission factor |
| 5 (Worst) | Asset-class proxy | Balance sheet × economy emission factor |
Scope 3 Category 15 Under CSRD ESRS E1
CSRD ESRS E1 Climate Change requires organisations to disclose gross Scope 3 GHG emissions in tCO₂e for each material category. For financial institutions, Category 15 disclosure requirements include:
- Total financed emissions in tCO₂e, broken down by asset class
- The PCAF data quality score or weighted average score
- Coverage ratio — what proportion of the portfolio is covered by the calculation
- Any exclusions and the reason for exclusion
- Year-on-year comparison once baseline is established
- Alignment with SBTi Financial Institutions targets (if set)
⚠️ CSRD First Reporting Deadlines
- Large EU public-interest entities (>500 employees): Financial year 2024 — first CSRD report due 2025
- Large companies (>250 employees, >€40M turnover, >€20M balance sheet): Financial year 2025 — first report due 2026
- Listed SMEs: Financial year 2026 — first report due 2027 (with opt-out to 2028)
Data Sources for Category 15 Calculation
The biggest practical challenge with Category 15 is obtaining emissions data for portfolio companies. Available sources, in order of quality:
- Direct engagement: Request GHG data from investees — increasingly possible as CSRD expands coverage
- CDP disclosures: CDP Climate questionnaire responses, available via cdp.net or data providers
- Commercial ESG databases: Bloomberg ESG, MSCI ESG, Refinitiv, Sustainalytics — provide estimated figures where reported data unavailable
- PCAF sector averages: Revenue-based emission intensity factors by NACE sector code
- Economy-wide averages: Last resort — balance sheet × economy emission factor
Frequently Asked Questions
Need Help With Scope 3 Category 15 Reporting?
We support manufacturers, holding companies and investors with CSRD-compliant Scope 3 disclosures — including financed emissions calculations and ESRS E1 gap assessments.
View Carbon Accounting Service →