The CarbonNeutral Protocol Index

1.5 Treatment of assets rented or leased to customers of CarbonNeutral® entities


In line with Annex G to the GHG Protocol Corporate Standard, emissions arising from entity assets rented/leased to a third party can be treated as either Scope 1 or Scope 3 emissions. The correct treatment is dependent on whether the entity is taking an “equity share” or “operational control” approach to their GHG emissions, as defined by the GHG Protocol Corporate Standard. Most applications of The CarbonNeutral Protocol take an “operational control” approach to entity emissions, resulting in emissions from rented or leased assets being categorised as Scope 3 emissions for the entity providing the assets that are being rented/leased. Therefore, for consistency, The CarbonNeutral Protocol recommends this approach.

An example of an entity taking an “operational control” approach to their GHG emissions would be that of a car rental or leasing company. When their vehicles are leased to customers, the emissions arising from customer use are counted as Scope 3 by the company. The emissions count as a Scope 1 emission for the customer of the company, as they have operational control of the vehicle for the duration of the lease.