Landlord-Tenant Allocation Methods

How to allocate energy use and emissions between landlords and tenants: methods, examples, and best practices for credibility and consistency.

Scope 3, Made PracticalCoreGuide60 min setup

Disclaimer: Educational only. Allocation approaches should be documented and applied consistently. Align with your reporting boundary and lease terms.

What you'll accomplish

By implementing this guide, you will:

Understand when allocation is needed (and when it isn't)
Select a defensible allocation method (metered, remainder allocation, proxies)
Produce reconciled outputs that tie back to building totals
Avoid common double-counting and boundary confusion
Document your approach so it survives turnover and review

Who this is for

•Real estate owners/operators (landlords) managing portfolio reporting
•Tenants/occupiers reporting emissions in leased spaces
•Sustainability teams handling leased assets and tenant utility data
•Property management and operations teams managing meters and billing

The problem (plain English)

In leased buildings, energy and emissions are often "shared" because:

• There is one building meter (master-metered)
• Some tenants are submetered, some aren't
• Common areas exist
• Utility responsibility varies by lease (tenant-paid vs landlord-paid)

Allocation is how you assign energy/emissions fairly and consistently when you don't have perfect measurement.

Quick start (60 minutes)

For one building:

Confirm what is measured vs unmeasured (submeters exist?)

Gather building total kWh for a defined period (evidence-linked)

Gather submetered tenant kWh (if any)

Build a tenant basis table (area is the default)

Allocate the remainder and reconcile back to the building total

Write a one-page allocation memo

Step-by-step implementation

1Clarify what you are allocating

Most teams should allocate energy (kWh) first, then compute emissions.

Why:

• kWh is what you measure
• emissions factors can be applied consistently after allocation
• it's easier to reconcile to the building total

2Confirm reporting boundary (avoid double counting)

Before choosing a method, clarify:

• Are you allocating for internal building performance reporting?
• Are you allocating for formal GHG reporting under a specific boundary approach?

Two teams can legitimately report different numbers depending on boundaries. The key is to document your choice and be consistent.

3Choose the best available method (ranked)

Method 1 — Direct metering (best)

Use actual meter or submeter data per tenant/space. Best for accuracy and disputes.

Method 2 — Partial metering + remainder allocation (common)

Use measured kWh where available, allocate the remainder to unmetered tenants.

Method 3 — Full allocation (area-based default)

If no tenants are metered, allocate building total by leased area (or another basis).

Method 4 — Proxy intensity (advanced, use carefully)

Use different intensity assumptions by space type. Risky if assumptions are arbitrary.

4Define "basis" (area is the beginner default)

Most common bases:

• Leased area (sq ft / sq m) — default
• Operating hours (use only if you have credible data)
• Headcount (rarely ideal in real estate)
• Custom weights by use type (advanced)

Beginner rule: start with area-based allocation, document limitations, and improve with metering.

5Handle common areas explicitly

Decide and document:

• Does common area energy get allocated to tenants?
• If yes, how? (typically by leased area share)
• If no, does the landlord retain common area emissions?

There is no universal rule. The critical requirement is consistency + documentation.

6Reconcile (non-negotiable)

Allocation must reconcile:

Define a tolerance (example):

• difference < 0.5% or < 100 kWh per period (choose one, document it)

If the difference is large: it's usually a period mismatch, missing tenant, or duplicate data.

Worked examples (beginner-friendly)

Example A — Partial submetering + remainder allocation

Building total: 1,000,000 kWh (period aligned)

Submetered:

• Tenant A: 200,000 kWh
• Tenant B: 300,000 kWh

Remainder to allocate:

Unmetered tenants (area basis):

• Tenant C: 50,000 sq ft
• Tenant D: 50,000 sq ft
• Total unmetered area = 100,000 sq ft
• Each gets 50% of remainder = 250,000 kWh

Final attribution:

• A: 200,000 | B: 300,000 | C: 250,000 | D: 250,000
• Total = 1,000,000 kWh (reconciles ✓)

Example B — Full allocation (no submeters)

Building total: 500,000 kWh

Tenants:

• Tenant A: 40,000 sq ft
• Tenant B: 60,000 sq ft
• Total area = 100,000 sq ft

Allocation:

• A: 40% → 200,000 kWh
• B: 60% → 300,000 kWh

Best practices (so this survives review)

•Always store evidence links (bills/exports)
•Always document period alignment (start/end dates)
•Always maintain a tenant roster (including vacancy treatment)
•Always write a one-page memo per building/per method
•Label quality: measured vs allocated vs proxy
•Track improvements over time (more metering, fewer proxies)

Templates (copy/paste)

Template A — Responsibility Matrix

Building	Tenant	Utility responsibility	Metered?	Data source	Evidence link	Notes
—	—	—	—	—	—	—

Template B — Allocation Basis Table

Tenant	Basis type	Basis value	Source	Notes
—	—	—	—	—

Template C — Allocation Output Table

Tenant	Measured kWh	Allocated kWh	Total attributed kWh	Quality label	Notes/Evidence
—	—	—	—	—	—

Template D — Reconciliation Summary

Building total kWh	Sum measured kWh	Remainder kWh	Sum allocated kWh	Sum attributed kWh	Difference (kWh)	Difference (%)	Status
—	—	—	—	—	—	—	—

Template E — Allocation Memo (one page)

Allocation Memo (Internal)

Building:
Period:
Building total kWh (evidence link):
Tenant population source (roster link):

Method used:
- Metered + remainder allocation OR full allocation
- Basis used (area/hours/custom) and why

Common area treatment:
- Included/excluded and rationale

Reconciliation:
- Difference (kWh and %), tolerance used

Known limitations:
Prepared by:
Reviewed by:
Date:

Common pitfalls

•Period mismatch (tenant data and building total cover different dates)
•Missing tenants in the basis list (over-allocates to included tenants)
•Double counting (tenant already reports their meter; landlord also attributes without documenting boundary)
•Changing method month-to-month without a change log
•Ignoring vacancy and common areas (creates hidden errors)

KPIs to track

•% of tenant energy that is measured vs allocated vs proxy
•Reconciliation difference trend (should be stable and small)
•Tenant data coverage by area (%)
•# buildings with documented memos (target: 100% where allocation is used)

Change log

v1.0 (2026-01): Latest release