My gas / electricity is bundled in with my rent, is this scope 1/2 or scope 3?
When a company rents a property where gas and/or electricity is bundled into the rental payment, the correct scope classification depends on who pays the utility bills and who has operational control over energy use. This situation is a recognised grey area in greenhouse gas accounting. Trace’s platform assigns energy to scope 1 and 2 by default, with the option to reallocate to scope 3 upstream leased assets when justified.
Default treatment in Trace
• All energy data is automatically mapped to scope 1 (gas) and 2 (purchased electricity).
• This reflects the principle of operational control. Even if utilities are indirect, the company occupies the space and typically influences consumption.
• This approach supports transparency and comparability across customers.
When Scope 3 may be appropriate
Energy can be reallocated to scope 3 upstream leased assets if both conditions are met:
- The company does not pay for utilities directly. Energy costs are bundled into rent and passed through by the landlord.
- The company has no influence or control over how energy is used in the building. For example, centralised systems with fixed operation schedules or no ability to adjust heating, cooling or lighting.
Why this is a grey area
• GHG Protocol guidance varies in interpretation. Some organisations consider bundled utilities as part of operational control, while others treat them as landlord emissions.
• Renting space does not always equate to control over energy systems, so companies need to assess their specific circumstances.
• The key question is whether the tenant can meaningfully influence energy consumption.
Recommended approach for reporters
• Disclose the basis for classification in your methodology.
• If reallocated to scope 3, justify by explaining why operational control does not apply.
• If kept in scope 1 and 2, acknowledge that utilities are bundled but consumption arises from your operations.