GHG Protocol in Plain English (Real Estate Edition)

Make Scope 1/2/3 and boundaries approachable — so your reporting doesn't collapse

FoundationsCoreGuide15 min

What you'll accomplish

By the end of this resource you will:

  • •Understand Scope 1, Scope 2, and Scope 3 in plain English
  • •Know what "boundaries" mean and why they change your numbers
  • •Learn the simplest sequence that works in real estate: control plane → Scope 2 → Scope 1 → Scope 3
  • •Avoid common mistakes (double counting, tenant utility confusion, inconsistent methods)
  • •Have templates for a boundary statement and a minimum viable emissions inventory

Who this is for

  • •Sustainability teams building credible baselines
  • •Finance teams who need auditability and clear methodology
  • •Ops / PM / Leasing teams who hold the real data and need a beginner-friendly explanation
  • •Anyone who hears "Scope 3" and immediately feels overwhelmed

When to use this

  • •Your team is starting emissions tracking for the first time
  • •You're switching from "estimates" to defensible numbers
  • •You're dealing with leased assets and tenant utilities
  • •You need a clear explanation for leadership, operations, or vendors

The simplest definitions (no jargon)

Scope 1 (direct emissions you control)

Usually in real estate operations:

  • •On-site fuel combustion (boilers, generators)
  • •Refrigerants (leaks/top-offs) if you control the equipment
  • •Fleet fuel if you control vehicles

Scope 2 (purchased energy you consume)

  • •Electricity
  • •Steam
  • •Heating
  • •Cooling
  • •District energy (where applicable)

Beginner rule: Track kWh (and billing dates) first. Cost is secondary.

Scope 3 (everything else in the value chain)

Scope 3 is "other indirect emissions" — mainly:

  • •What you buy (vendors, services, capital projects)
  • •Waste
  • •Leased assets (depending on your role and boundary approach)
  • •Other categories depending on your model

Beginner rule: Scope 3 is not a single project. It's a system: screen → focus → improve.

What "boundaries" mean (the reason teams get stuck)

Before you calculate anything, you must define what's in your inventory.

There are two types of boundaries you need to understand:

1) Organizational boundary (which entities/assets you include)

Common approaches (pick one and be consistent for the reporting year):

  • •Operational control: you report what you operate/control
  • •Financial control: you report what you financially control
  • •Equity share: you report proportional to ownership

You don't need to master these on day one, but you do need to choose an approach and write it down.

2) Operational boundary (what emission sources you include)

This is where Scopes 1/2/3 live. Operational boundaries define which activities are Scope 1 vs Scope 2 vs Scope 3.

Real estate reality: why leased assets gets confusing

Real estate often has:

  • • Multiple parties influencing operations (owner, property manager, tenants)
  • • Utilities paid by different parties (owner-paid, tenant-paid, mixed)
  • • Mixed metering (master, submeter, tenant meters)

So the same building can produce different reporting treatment depending on:

  • • your organizational boundary approach
  • • the lease structure
  • • who controls the energy and equipment
  • • what data you can access

Beginner rule: Don't try to "perfect" leased assets on day one. Build data access + method disclosure and improve over time.

A practical sequence that works (what to do first)

This avoids the most common failure mode: starting Scope 3 while Scope 2 is chaos.

1

Build the control plane

Run the Operation stage

Why:

  • • It creates vendor inventory and contract clarity
  • • It produces stable processes and owners
  • • It makes later supplier engagement possible

Resources:

  • • Renewal Control System
  • • Contract Repository Setup
  • • Invoice & Change Order Leakage System
2

Stabilize Scope 2

Carbon Basics stage

Why:

  • • Scope 2 is usually the "largest and easiest" controlled dataset
  • • It is the foundation for Category 3 (Scope 3) and leased assets work

Resources:

  • • Scope 2 Utility Data Pipeline Starter Kit
  • • Utility Responsibility in Real Estate
  • • Scope 2 methods explainer (location vs market)
3

Build Scope 1

Carbon Basics stage

Why:

  • • Fuel and refrigerant records exist, but are scattered
  • • You can get to "minimum viable" quickly with the right templates

Resources:

  • • Scope 1 Basics for Real Estate Ops
4

Do Scope 3 the right way

Scope 3, Made Practical stage

Why:

  • • If you don't screen, you waste time collecting data that doesn't matter

Resources:

  • • Scope 3 in Plain English
  • • Scope 3 Screening Playbook
  • • Supplier Engagement Starter Pack
  • • Category kits

Scope 2 methods in plain English (one paragraph)

Scope 2 is often reported two ways:

  • •Location-based: uses average grid emissions where energy is consumed
  • •Market-based: reflects contractual instruments and procurement choices (when defensible)

Beginner rule: Always calculate location-based. Only publish market-based if you can list and defend the instruments and method.

(You'll implement details in the Scope 2 methods resource.)

Scope 3 in plain English (what it really is)

Scope 3 is a set of categories (15 in the GHG standard). You do not need all categories perfectly to start.

The right approach is:

1) Screen

Use spend and basic activity proxies to find what matters most.

2) Focus

Pick the top 2–4 categories (and the top suppliers driving them).

3) Improve

Upgrade data quality over time (supplier activity data, then supplier-specific methods).

Beginner rule: Your first Scope 3 deliverable is a prioritized shortlist, not "perfect emissions."

Common mistakes (and how to avoid them)

Mistake 1 — Double counting

Examples:

  • • Counting tenant electricity in both Scope 2 and leased assets category calculations
  • • Allocating whole-building energy to a tenant while also using tenant-submitted bills

Fix: Track measured vs allocated vs proxy. Reconcile totals. Keep an explicit method note.

Mistake 2 — Confusing who controls what

Examples:

  • • If you don't control the equipment or energy purchase, be careful calling it "Scope 1/2."

Fix: Write your boundary statement. Use leased assets guidance and disclose limitations.

Mistake 3 — Reporting without evidence

Examples:

  • • Numbers without evidence links won't survive scrutiny.

Fix: Evidence link requirement for each period and site (bill/export/service log).

Mistake 4 — Starting Scope 3 too early

Examples:

  • • Scope 3 will collapse if you don't have vendor inventory and stable Scope 2.

Fix: Follow the sequence in this resource.

Templates

Template 1 — Boundary statement (copy/paste)

For reporting year [YYYY], Alpaka's organizational boundary uses [operational control / financial control / equity share].
Our operational boundary includes Scope 1 emissions from [on-site fuels + refrigerants under our control], Scope 2 emissions from purchased [electricity/steam/heat/cooling] where we consume energy, and Scope 3 emissions from value chain activities prioritized through a screening process. Where activity data is not available, we use documented estimates and disclose assumptions. We will improve data quality over time by expanding measured data coverage and supplier engagement.

Template 2 — Minimum viable emissions inventory (table)

SourceScopeWhere it shows upMinimum data neededEvidence
Boiler/generator fuelScope 1fuel bills, tank logsquantity + dates + unitinvoice/log
Refrigerants (if controlled)Scope 1HVAC service logsrefrigerant type + qty + dateservice log
ElectricityScope 2utility bills/portalkWh + billing periodbill/export
Natural gasScope 1 (if controlled) or tenantbills/portal/tenanttherms/ccf + datesbill/export
Service vendorsScope 3 Cat 1AP/vendor listspend + vendor categoryinvoices/AP
Capex projectsScope 3 Cat 2capex ledgerspend + project typecapex docs
WasteScope 3 Cat 5hauler reportstons by stream + methodvendor report
Leased assetsCat 8/13leases + utilitiesrole + lease type + kWh methodlease + bills

Template 3 — Data quality labels (simple and honest)

Measured = direct reading or bill/export for the specific source
Allocated = derived from a known total using a documented allocation rule
Proxy = estimated using typical intensity/spend factors (temporary only)

Evidence and Confidence

Confidence: High (definitions + sequencing align with common GHG reporting practice)

Assumptions: You want operationally defensible reporting, not perfect theory.

Where this can fail: If boundaries and methods change mid-year without a change log, or if evidence links are missing.

Sources (primary references)

Change log

v1.0 (2026-01): Latest release