What you need to know about Category 15
01
What Category 15 is about
Providing capital is a service of the company, which is why Category 15 is downstream. The emissions of investees and financed projects are attributed according to the company's own share: for holdings by the share of equity, for project finance and earmarked loans by the share of total project costs from equity and debt. Because portfolios change constantly, a fixed date is chosen, such as 31 December, or a representative annual average. The choice should be disclosed and kept.
02
Holdings: what sits in Scope 1 and 2 and what sits here
The boundary depends on the consolidation approach and the reporting framework:
- Equity share: subsidiaries, associates and joint ventures sit pro rata in Scope 1 and 2. Category 15 then mainly contains loans, project finance and pure financial holdings without significant influence. A company that reports under PCAF applies a control approach; the financed emissions then sit in Category 15
- Control approach under the GHG Protocol: controlled holdings sit at 100 % in Scope 1 and 2. Under financial control, joint ventures, partnerships and joint operations under joint financial control also sit there pro rata. The GHG Protocol assumes proportional consolidation in the financial statements; it does not expressly address a joint venture accounted for using the equity method. Associates and minority holdings without control belong in Category 15
- ESRS: fully consolidated subsidiaries and the share in joint operations, such as a construction consortium, belong to own operations. Associates count as business relationships and sit in Category 15. For joint ventures under joint financial control the assignment is not clear-cut: they too count as business relationships, but the ESRS reporting boundary corresponds to financial control under the GHG Protocol, under which they can sit pro rata in Scope 1 and 2. Where the two differ, the ESRS take precedence; as alternatives to financial control, the equity share and operational control approaches are allowed. The chosen approach must be disclosed and applied consistently, ideally agreed with the auditor
- Small holdings: for holdings with neither control nor significant influence, a threshold may be set, for example a 1 % share, below which they are left out, provided this is disclosed and justified
03
Project finance
For each year of the term, the proportional emissions of relevant projects sit in Category 15. Relevant means, for example, projects in GHG-intensive sectors or above a threshold the company sets itself. A company that finances a project as original sponsor or lender also states the expected emissions over the entire project lifetime, once in the year of financing and separately from Scope 3. If the lifetime is uncertain, a range with disclosed assumptions is enough. For infrastructure such as roads, Scope 3 of the project, for example the traffic, can be much larger than its operation and should then be included.
04
How the calculation works
- Investment-specific: reported Scope 1 and Scope 2 emissions of the investee times the attribution factor. Often available for listed companies; under PCAF, verified emissions give data quality score 1, unverified ones score 2
- With physical activity data: production or energy quantities of the investee times the emission factor times the attribution factor, where no inventory is available
- Average data: revenue of the investee or project, in the construction phase the project costs, times a sector-typical factor from an input-output database times the attribution factor. The lowest data quality, but often the starting point in broad portfolios; suitable for finding the most emission-intensive positions in a screening
- Project-specific: emissions of the financed project times the share of total project costs
- PCAF for financial institutions: PCAF recommends that financial institutions publish, for each asset class, a data quality score weighted by outstanding amount (1 = best, 5 = worst score) or explain why this is not possible. The score for Scope 3 must be stated separately from Scope 1 and 2. Since the reports of 2025, PCAF also requires the Scope 3 emissions of borrowers and investees for all sectors, separately from Scope 1 and 2. Unlike the GHG Protocol, PCAF allows only a fixed date aligned with the financial year
05
What applies under the ESRS
The revised ESRS apply to financial years from 1 January 2027; for 2026, undertakings may apply them by choice. Category 15 is reported if it is significant.
- Financial institutions consider the PCAF Standard on financed emissions for Category 15
- Intensity targets: for intensity targets for Category 15, financial institutions need not state absolute target values if they use physical or financial measures as denominators, disclose the absolute financed emissions within the scope of the targets and explain which factors determine their expected development and how this relates to the trends of the past three to five years
- Managed mandates: a company that manages client funds as a fiduciary, without bearing the risks and rewards of ownership, need not provide data for these investments
- Holdings that are also suppliers or customers: in addition to the share as an investor, the supply or customer relationship must also be taken into account, and not only in proportion to the shareholding
06
Typical data sources in the company
- Schedule of holdings and consolidated financial statements: list of holdings with share and accounting method (fully consolidated, equity method, at cost)
- Loan and securities systems: outstanding amounts, enterprise value (EVIC) or the sum of equity and debt, and use of proceeds for each financing
- Sustainability reports of the investees and data providers for reported emissions; sector classification for average factors
07
Typical mistakes
- Recording joint ventures twice or not at all, for example pro rata in Scope 1 and 2 and again in Category 15, or in neither, and not disclosing the chosen assignment
- Dismissing the category as “only for banks”, although a holding company with minority interests has it too
- Changing the reference date or the attribution basis from year to year, so that changes in the portfolio cannot be told apart from method effects
