GHG Boundary of Investments/Borrowers


Happy New Year to everyone.

Is anyone aware if an industry-best practice is emerging/exists around which boundary (i.e. equity; financial control; operational control) to apply to the quantification of GHG emissions for a bank’s borrower where that borrower holds both >50% and <50% equity interests in other companies.

My understanding is that operational control is the most favoured approach of companies that quantify their emissions. However, I’m concerned that the information required to consolidate on an operational control basis may not be available to a bank where it is looking to quantify emissions of borrowers.
In this case, an equity approach seems more practical. Of course, setting boundaries on operational control versus equity/financial control can result in materially different Scope 1 and 2 emissions for a given company.

Thoughts appreciated.