Glossary›Emissions accounting and measurement›Investments (Scope 3 Category 15)
Glossary term
Cluster D · D45
Tier 1 · differentiator
Investments (Scope 3 Category 15)
Definition
Category 15 covers the emissions of investments a company holds that are not already consolidated into its own inventory: equity stakes, joint ventures, associates, project finance positions and corporate debt holdings. Emissions are attributed to the investor in proportion to its share. It applies to any company holding investments, not only to financial institutions.
· paragraph 29(a)(vi) and Appendix B · first disclosed in the second reporting period; amended by AASB S2025-1 from 1 January 2027
On this page
In practice
The surprise in Category 15 for an ordinary private business is that it applies at all. Most CFOs read “investments” as a category for banks, insurers and super funds, and stop reading. It is not. If you are a manufacturer with a 30 per cent stake in a joint venture, a construction group with minority interests in project companies, a family business holding a property syndicate unit, or a profitable operating company sitting on a treasury portfolio of listed shares and corporate bonds, you have a Category 15 population.
The mechanism that creates it is the interaction between Category 15 and your organisational boundary, and this is the part worth getting precise. Under the operational control approach, the approach most Australian reporters use, an entity you do not control is outside your Scope 1 and Scope 2 entirely. That is what makes it appear in Scope 3 instead. The 30 per cent joint venture that does not sit in your Scope 1 and 2 is exactly the thing Category 15 is for. Move to an equity share boundary and the same joint venture comes into Scope 1 and 2 at 30 per cent and leaves Category 15. It is one or the other, never both, and a reader cannot tell which you did unless the basis of preparation says so.
Attribution follows economic interest. Equity investments are attributed by the share of equity held. Debt is attributed by the outstanding amount over the investee’s total capital. The number you need from each investee is its own Scope 1 and Scope 2 emissions, which for an unlisted Australian joint venture partner usually does not exist yet. That is the real work in this category: not the arithmetic, but getting a private counterparty who has no reporting obligation of their own to produce a number you can rely on.
Materiality does most of the filtering in practice. A treasury portfolio of listed Australian equities held for liquidity is often assessed as immaterial on screening and excluded, and the screening that reached that conclusion is itself evidence the assurer will ask to see.
The decision is a screen, not a calculation. The mistake that costs the most money is starting at the number. Category 15 is decided in three steps, in order, and only the third one involves arithmetic.
Step
What it does
1. Consideration, then materiality
Two different things preparers routinely collapse into one. Appendix B paragraph B32 requires an entity to consider its entire value chain and all 15 categories. Considering a category is not measuring it. A category enters measurement only once it is both applicable and material, and materiality under Appendix D paragraph 18 asks whether omitting the information could reasonably influence a primary user’s decisions, not whether the tonnage is large. The screen that answers this is qualitative. It does not require a single investee balance sheet, and computing attribution factors in order to decide whether to compute attribution factors is both circular and the exact cost the standard guards against.
2. The written decision to include or exclude
With the argument recorded both ways. Exclusion rests on Appendix D paragraph B25: an entity need not disclose information otherwise required if it is not material, even where the standard describes the requirement as a minimum. That argument only runs if the screen exists, is dated, is signed, and fixed its threshold before scoring.
3. The number, only if the category is in
Or documentation of how the number will be produced.
Two cheap questions settle most of step one. Is any investee or borrower a registered reporter under the NGER Act? Does any facility they operate emit more than 100,000 tonnes CO2-e a year, putting it inside the Safeguard Mechanism? A yes on either lifts the category’s materiality sharply, because the counterparty is already reporting data to a regulator. Both answers come from a public register and one question to the counterparty.
There is a trap in how the exclusion argument is usually run. For a private business with related-party investments, the data is often easy to get: you share directors, you can simply ask. So never argue that the data cannot be obtained; that claim is false and it collapses on the first question. Argue instead that the benefit of quantifying an immaterial category is nil however cheap the data is, which is where Appendix B paragraph B10’s balanced consideration of costs and benefits actually bites. “We can get it and it is not worth getting” survives. “We cannot get it” does not.
Three cautions carry real money. Excluding the category now and including it later is a restatement event, so the prior figure must be restated and a restatement note published. Negative equity in an investee can make the attributed share far larger than the investment size suggests. And an undocumented omission is not a finding of immateriality: it is the weakest position in the file.
A citation warning. AASB S2 carries two separate B-numbering series. Appendix B is the climate application guidance; Appendix D is the general requirements, and it restarts at B1. So B25 in Appendix B is about jurisdictional emissions requirements, while B25 in Appendix D is the materiality relief, and it is the Appendix D one this entry relies on. The same collision affects B23, B27, B28 and B32. Always name the appendix.
What the assurer does with it
The assurer builds the population from documents they already have. They take the investments note, the interests in associates and joint ventures note, and the related party disclosures from the audited financial statements, and they compare that list against the entities included in the Category 15 calculation. Anything on one list and not the other is a query. That is a stronger completeness test than exists for most Scope 3 categories, and it is why Category 15 is harder to under-report quietly than it looks.
They then test the attribution percentage against the shareholders agreement or unit register, and the investee emissions figure against whatever the investee provided.
They accept an investee’s own reported and, better, assured inventory, with the attribution share agreed to a legal document. They reject an attribution percentage that does not match the equity accounting percentage used in the financial statements, an investee figure with no stated source, and any investment that appears in both Scope 1 and 2 and Category 15. Where a category has been excluded on materiality, they test the screening, not the exclusion.
Commonly confused with
Financed emissions, which for a non-financial company is a narrower concept sitting inside Category 15 rather than a synonym for it. And the equity share consolidation approach, which handles the same investee at the Scope 1 and 2 level instead.
Timing and relief
The standard Scope 3 position applies: Category 15 may be omitted in the first annual reporting period under AASB S2 Appendix C paragraph C4(b), and under paragraph C5 the entity may keep relying on that relief when presenting the relieved year as comparative information.
Separately, AASB S2025-1 Amendments to Greenhouse Gas Emissions Disclosures, approved 15 December 2025, permits an entity to limit its measurement and disclosure of Category 15 to financed emissions, with facilitated and insurance-associated emissions excluded, and clarifies the treatment of derivatives. The amendments apply to annual reporting periods beginning on or after 1 January 2027 under paragraph C1B, with early application permitted where the entity discloses that fact.
Whether that limitation reaches an ordinary private business is a live question rather than a settled one. Paragraph B59 frames the additional financed-emissions requirements around entities participating in asset management, commercial banking or insurance, and paragraph C4(b) uses the same framing. A manufacturer with a joint venture stake is not participating in those activities, so on the better reading the B59 additional requirements never applied to it and the S2025-1 limitation is relief it did not need. The ordinary Category 15 obligation in paragraph 29(a)(vi) is unaffected either way, and that is the one a private business has to answer.
Sources
1
2
Corporate Value Chain (Scope 3) Accounting and Reporting Standard, full text
GHG Protocol
3
Review status
Review required
Last reviewed
15 September 2026
Editorial pass, unsigned
Reviewer required
Carbon accounting specialist and registered company auditor
Next scheduled review
1 January 2027
AASB S2025-1 effective date
Part of
Cluster D, Emissions accounting and measurement
49 terms from the head term carbon accounting down to individual Scope 3 categories and the mechanics of factors, boundaries and data quality. The largest cluster in the glossary.
Related terms
The attribution methodology this category’s number is usually built with
The boundary choice that moves the same investee into Scope 1 and 2 instead
The judgement that decides whether Category 15 exists for you at all
Related questions
How do we work out which Scope 3 categories are material for us?
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You screen all fifteen GHG Protocol categories, estimate each roughly off accounts payable spend, and document why you included or excluded each one. The screen is the deliverable as much as the answer, because the practitioner will test the reasoning behind an exclusion at least as hard as the numbers behind an inclusion. Expect the answer to be concentrated in a handful of categories.
Do we have to report Scope 3 in year one?
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No. AASB S2 gives first-time reporters relief from disclosing Scope 3 greenhouse gas emissions in their first annual reporting period, and Scope 3 is required from the second year. Taking the relief in year one is normal, but the supplier data work needs to start in year one anyway.
Do our subsidiaries have to report separately or does the parent cover them?
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Each entity is tested on its own. A subsidiary that must lodge its own financial report under Chapter 2M and meets a section 292A test prepares its own sustainability report, even where the parent reports as well. Being consolidated into the parent’s report does not by itself remove the obligation.
Where this sits commercially
Carbonhalo answers Category 15 as a dated screen with the threshold fixed first, not as a calculation nobody needed to run.
Other terms in this cluster
Investments (Scope 3 Category 15)