Unpacking Scope 3: Category 13 – Downstream leased assets

GHG Scope 3 Downstream activites | Category 13 – Leased assets

In this blog article we’re going to help understand the carbon emissions caused by assets that your organisation owns but others operate. Some companies generate revenue not by selling assets, but by leasing them. In these cases, greenhouse gas (GHG) emissions are still created during the operation of those assets, even though day-to-day control lies with the customer. These emissions fall under Scope 3 Category 13: Downstream leased assets.

Category 13 includes emissions from assets owned by the reporting company and leased to third parties, where those emissions are not already included in Scope 1 or Scope 2. The defining factor is ownership without operational control.

This category is particularly relevant for real estate owners, aircraft and vehicle leasing companies, equipment rental firms and infrastructure operators.

What does this mean in practice?

If your company owns commercial office buildings that are leased to tenants, the electricity and heating consumed by those tenants may fall under Category 13.

If you lease a fleet of vehicles to customers, the fuel consumed during their use is included here.

If you own industrial equipment leased to manufacturers, the energy used to operate that equipment may be part of this category.

In short, Category 13 applies when you retain ownership of an asset, but another party operates it.

Understanding the difference between Category 8 and Category 13

Category 13 is often confused with Category 8, but the two are mirror images of each other.

Category 8 was covered in Article 16 of our Carbon Clarity series, when we introduced upstream leased assets i.e. assets that your company leases from others and uses in its own operations. For example, if you lease office space or vehicles for internal business use, the associated emissions fall under Category 8.

Category 13, on the other hand, applies when your company owns the asset and leases it out to others. The operational emissions from those assets are reported under Category 13.

The key difference lies in the direction of the lease:

• Category 8 – You are the lessee
• Category 13 – You are the lessor

This distinction ensures emissions are allocated consistently across value chains.

Why Category 13 matters

Leased assets can represent a significant share of total emissions, especially in property-heavy or asset-based business models.

Although operational control lies with tenants or customers, ownership carries influence. Asset design, energy performance standards, equipment efficiency and lease agreements (such as green leases) can all affect emissions levels.

Stakeholders increasingly expect asset owners to improve energy efficiency and reduce carbon intensity across their portfolios.

How companies estimate these emissions

Estimating Category 13 emissions typically involves:

• Collecting energy and fuel consumption data from lessees
• Allocating emissions based on ownership share or leased area
• Applying regional emission factors for electricity and fuels
• Using benchmarks when direct consumption data is unavailable

Data access may depend on lease agreements and tenant cooperation, making contractual sustainability clauses increasingly important.

The strategic perspective

Category 13 highlights an important principle in carbon accounting: responsibility follows ownership, not just operational control.

Companies that invest in energy-efficient buildings, low-carbon equipment and renewable energy integration can significantly reduce downstream leased asset emissions.

While Category 8 focuses on assets you use, Category 13 focuses on assets you provide. Together, they ensure that leasing arrangements are fully reflected in Scope 3 reporting.