Accounting for emissions from department store counters

General
1

Hello! I have a question on accounting for emissions associated with department store counters.

We have are working with a client who has counters in various departments store where they sell their products. They obviously do not have financial or operational control over the space that they use. In addition to this, the operations are being handled by the department store (i.e. personnel are department store employee etc etc).

So my questions are:

  • Should the client account for these emissions?
  • If they should, what category should I account for emissions associated with the operation of this stand? My initial thoughts are accounting for them in Category 8

Thanks in advance!

2

Hi Bianca,

Thanks for your question!

I don’t think your use case (using/renting a part of an asset) is fully covered by the GHG Protocol as the leased assets activity category (3.8) is there for assets of which the reporting company could have control, depending on the consolidation approach you apply (which is not the case here)/

I think you can apply two approaches:

  1. Account for it in 3.1 (Purchased Goods&Services) as you can’t really asign it to the strict definition of one of the other activity categories. Then you need to account for all cradle-to-gate emissions.
  2. Account for it in 3.8 (Leased assets) as it most closely follows the boundaries of that activity category. Then you need to account for the scope 1 and scope 2 emissions of the operation of the shops. Optionally, you could account for the life cycle emissions associated with manufacturing or
    constructing leased assets (but not the full cradle-to-gate emissions as for 3.1).

It feels more natural the follow the same logic as if you would be renting the full department store (and thus account for it in scope 3.8).

Hope this helped. Happy to hear your thoughts on it.
The best,
Steven

1 Like
3

Hi Steven!

Thanks for that. Super super helpful to hear your view on it :grinning:.

4
  1. Should the client account for these emissions?

To my mind it’s a “No from me…” if the client doesn’t have either financial control or operational control over the department store counters then they can’t act to reduce emissions so shouldn’t include them.

Since the operations, including personnel and space management, are under the department store’s control, these emissions are not directly attributable to the client’s Scope 1 or Scope 2 emissions. However, these emissions may still be relevant in the client’s Scope 3 inventory depending on materiality

  1. If they should, what category should I account for emissions associated with the operation of this stand?

Emissions of the counters could be included under Scope 3, specifically Category 8: Upstream Leased Assets. This category applies to emissions from leased assets not under the company’s operational control. Alternatively, if the client has no leasing arrangement but benefits from the department store’s services (e.g., energy use, maintenance), emissions could be considered under Category 9: Downstream Transportation and Distribution or even as part of Category 13: Downstream Leased Assets, depending on the nature of the relationship.

Suggestions….

•Assess Materiality: Are these emissions material to the client’s overall inventory. If not significant, then include in inventory but not reporting.

•Collaborate with Stores:

See if you can engage with the department stores to put energy sub meters or any other measure for emissions directly related to the counters, especially energy use. They probably want this for their reporting.

•Consistency in Reporting: Make a choice and stick to it with your reasoning. Maintain consistent consistency in your reporting practices and keep aligned with GHG standards and the client’s existing reporting. Don’t just ignore them!

just my thoughts - happy to be shot down in flames