As organizations refine their climate strategies to meet net-zero targets, Scope 3 emissions—those that occur outside direct corporate operations—have become increasingly significant. Among these, Scope 3 Category 8: Upstream Leased Assets stands out as a frequently underreported yet impactful category. It includes emissions from facilities, vehicles, and equipment leased by a company but not directly owned or controlled.

With more companies occupying rented spaces or using leased equipment, it’s essential to measure, report, and reduce emissions from these assets to remain aligned with GHG Protocol standards, satisfy stakeholder expectations, and enhance sustainability reporting accuracy.

This blog provides a deep dive into Scope 3 Category 8, including definitions, calculation methods, challenges, and actionable reduction strategies, informed by the GHG Protocol’s technical guidance.

What Are Upstream Leased Assets in Scope 3 Category 8?

According to the GHG Protocol, Scope 3 Category 8 includes emissions from the operation of leased assets during the reporting year, not already accounted for in Scope 1 or Scope 2 inventories. This applies to companies that act as lessees—those who operate but do not own these assets.

Examples of Upstream Leased Assets:

• Office buildings or co-working spaces

• Warehouses, factories, or manufacturing units

• Rented vehicles or equipment

• Data centers leased from third-party providers

These emissions are considered “upstream” because they occur in the supply chain of the reporting organization. For lessors (owners leasing out assets), related emissions are reported under Scope 3 Category 13: Downstream Leased Assets.

Why Should Businesses Report These Emissions?

1. Regulatory and Voluntary Disclosure Requirements

• The GHG Protocol recommends reporting Scope 3 emissions, including Category 8, for a full understanding of climate impact.

• Sustainability initiatives such as the Science Based Targets initiative (SBTi) and CDP increasingly require leased asset emissions data.

2. Operational and Sustainability Transparency

• Identifying high-emission leases allows for better management decisions and performance improvements.

• Investors, customers, and regulatory bodies expect companies to report all relevant emissions.

3. Alignment with Net-Zero Goals

• For many companies, upstream leased assets represent a large share of energy use, particularly in commercial real estate and logistics.

• Without including Category 8, a company’s carbon inventory may significantly underrepresent actual impacts.

Sprih Insight: Sprih’s carbon management platform helps businesses incorporate leased asset emissions into their sustainability reporting with precision and minimal manual work.

Challenges in Measuring Leased Asset Emissions

Despite the importance of capturing emissions from upstream leased assets, several practical and systemic obstacles make this task complex. Understanding these challenges helps organizations proactively plan and mitigate reporting gaps.

1. Limited Access to Utility Data

Most leased properties are managed by third-party landlords or facility managers, which means the reporting organization often does not have direct access to energy consumption data. Without visibility into electricity, heating, cooling, or fuel usage, calculating emissions becomes dependent on estimates or averages, which reduce accuracy. This is especially problematic in multi-tenant buildings, where utilities are often aggregated across all occupants.

Sprih Solution: Sprih’s emissions platform enables tenants to automatically ingest and normalize shared utility data, even when it’s provided in aggregated form.

2. Inconsistent Emission Factors

Even when landlords do share utility data, the emission factors they use may differ based on location, outdated methods, or reporting standards. These discrepancies create inconsistencies in GHG accounting and can compromise the comparability of emissions data across multiple leased properties.

Best Practice: Always apply standardized and region-specific emission factors such as those from the IPCC, GHG Protocol, or national databases, even if the landlord provides pre-calculated emissions.

3. Complex Lease Agreements and Control Boundaries

Defining who is responsible for emissions under different lease structures can be ambiguous. In some cases, the tenant has operational control over HVAC systems, lighting, or machinery; in others, the landlord retains full control. This affects whether emissions fall under Scope 1 or Scope 3, and how they should be accounted for under GHG Protocol guidelines.

Clarification: Scope 3 Category 8 includes only those assets operated but not owned by the reporting company, and not already reported in Scope 1 or 2.

4. Fragmented Asset Portfolios

Organizations with decentralized operations, such as retail chains, logistics networks, or regional offices, often lease dozens or hundreds of facilities. Gathering accurate emissions data across these varied locations becomes resource-intensive and difficult to standardize.

Sprih Solution: Sprih enables bulk uploads, multi-location modeling, and centralized dashboards to simplify emissions tracking across complex asset portfolios.

5. Data Collection Burden Across Departments

Leased asset data often resides across multiple departments—finance, real estate, procurement, operations—making coordinated data collection difficult. Internal stakeholders may not understand the importance of emissions tracking or lack clarity on their role in data provision.

Recommendation: Establish a cross-functional sustainability task force and empower teams with clear roles, data templates, and reporting tools such as Sprih’s centralized platform.

Strategies to Reduce Upstream Leased Asset Emissions

Reducing emissions from upstream leased assets requires collaboration between lessees, landlords, and sustainability teams. These strategies not only lower emissions but also improve energy efficiency, tenant-landlord relations, and long-term cost savings.

1. Negotiate Green Leases

A green lease includes contractual provisions that promote sustainability goals between the tenant and the landlord. These may include:

• Requirements for sharing energy usage data

• Commitments to renewable energy procurement

• Installation of smart meters or building energy management systems (BEMS)

• Clauses mandating energy efficiency upgrades during renovations or lease renewals

Tip: Align lease terms with sustainability KPIs and make data-sharing agreements a non-negotiable.

2. Consolidate High-Emission Leases

By identifying which leased assets are responsible for a disproportionate share of emissions, companies can:

• Exit or renegotiate leases for inefficient spaces

• Consolidate operations into lower-emission or LEED-certified buildings

• Move to shared workspaces with better environmental credentials

Sprih’s role: Our platform highlights emissions by facility, helping identify underperforming or high-impact leases.

3. Push for Renewable Energy Sourcing

Companies can work with landlords to:

• Procure electricity from renewable sources (e.g., green tariffs or PPAs)

• Install rooftop solar panels where feasible

• Switch to district heating or cooling systems with lower carbon intensity

Best Practice: Use your buying power as a tenant to demand cleaner energy, especially in long-term leases.

4. Collaborate on Energy Efficiency Projects

Invest in joint upgrades such as:

• High-efficiency lighting (LED)

• Smart HVAC systems

• Better insulation and glazing

• Motion sensors and energy-efficient appliances

These projects can be co-funded or result in shared cost savings, creating a win-win for both tenant and landlord.

Sprih Insight: Use Sprih’s scenario tools to model the emission reduction impact of various retrofit investments.

5. Educate Internal Teams and Align with Procurement

Equip procurement, leasing, and operations teams with checklists and criteria for evaluating the sustainability of leased assets. Include environmental performance in:

• RFPs for leased space or equipment

• Decision-making for new facilities

• Supplier scorecards for lessors or facility managers

Recommendation: Make sustainability a standard criterion in all leasing decisions, not just a “nice-to-have.”

How Sprih Helps You Track and Reduce Leased Asset Emissions

Sprih’s Scope 3 emissions management platform enables:

• Automated calculation of emissions by asset type, lease term, and region

• Flexible data input methods, including utility uploads, lease records, and API integration

• Scenario modeling for assessing impact of lease changes or consolidation

• Audit-ready reporting for CDP, GHG Protocol, and SBTi submissions

Don’t Overlook Scope 3 Category 8

Upstream leased assets may be out of sight, but they shouldn’t be out of mind. Ignoring Category 8 emissions can result in significant underreporting, especially for organizations with a distributed or global real estate footprint.

By using best-practice calculation methods and leveraging smart sustainability tools like Sprih, companies can:

• Accurately report emissions from leased assets

• Strengthen their sustainability performance

• Reduce real-world climate impact

Visit www.sprih.com to explore our platform or book a consultation today.