It comes up in almost every carbon footprint of an organization with its own facilities. A space that is yours, but someone else runs. A university canteen in the hands of a concessionaire. The shops in a mall. The cafeteria in an office tower. The camp at a mine site managed by a contractor. A car park with an outside operator.
In every one of these cases there is a gas or electricity bill, and the question arrives the same way: do those emissions go in my Scope 1, or in Scope 3? Often the invoice gets shared. Sometimes it's in your name and the other party reimburses you. And that's where the most common mistake happens: deciding the scope by looking at who pays.
The short answer: the scope is set by who operates, not by who pays. What a third party operates inside your facilities is their Scope 1 and your Scope 3. What follows is why, with a real case, and the nuances that change the answer.
The case: a contractor-run canteen
A university we work with has its campus canteen run by an outside company. That company buys the gas for the kitchen, pays the bill and shares the invoice with the university. The university owns the building and set the terms of the concession. We use it as the example throughout the post, because it has every ingredient: an owned asset, an outside operator and an invoice that crosses from one organization to the other.
The invoice doesn't set the scope
The first thing a footprint fixes is the organizational boundary: which operations count as your own. The GHG Protocol offers three approaches (equity share, financial control and operational control), and almost every organization we know uses operational control.
The definition is in chapter 3 of the Corporate Standard. An organization has operational control over an operation when it has the full authority to introduce and implement its operating policies at that operation. The same standard clarifies that having operational control doesn't mean having authority over every decision. A large investment may still need the owner's approval. What matters is who runs the place day to day.
Look at the canteen kitchen through that lens. The concessionaire hires the cooks, sets the menu, fixes the hours, chooses and maintains the equipment, and signs the gas supply contract. The university owns the building. That is ownership, not operational control.
So the gas in that kitchen is the concessionaire's Scope 1. For the university it's an indirect emission. And it would be even if the university paid the bill. The same logic applies to the shop in the mall, the cafeteria in the tower and the contractor's camp.
Where it goes: an asset you lease to someone else
The GHG Protocol's Scope 3 Standard covers this case in Appendix A, "Accounting for emissions from leased assets". Table A.2 looks at the problem from the lessor's side, which is where the owner of the space sits: it hands an asset to another entity in exchange for a fee. Under the operational control approach, in an operating lease the lessor does not have operational control, so emissions from fuel combustion and purchased electricity are Scope 3, Category 13, downstream leased assets.
The category description confirms it:
This category includes emissions from the operation of assets that are owned by the reporting company (acting as lessor) and leased to other entities in the reporting year that are not already included in scope 1 or scope 2.
One detail puts a lot of people at ease: the same guidance says the lessor's Category 13 emissions include the lessee's Scope 1 and Scope 2 emissions. The same tonnes appear twice, in two different footprints, under two different labels. That isn't double counting. Appendix A states it as a rule: if the lessee classifies them as Scope 1 or 2, the lessor classifies them as Scope 3, and vice versa.
There is an important variant. If instead of charging a fee you pay the operator for the service (a staff canteen bundled into a contract, a camp a contractor runs on your behalf), the relationship is a purchase of services and the emissions go in Category 1, purchased goods and services. The practical rule: if you charge, Category 13. If you pay, Category 1. Never both.
The nuances
The account is in your name. On many campuses and buildings the meter and the contract belong to the owner, and the operator reimburses the consumption. That's the case where we've most often seen this gas dropped into the owner's Scope 1. Paying the bill doesn't give you operational control. Appendix A has a footnote written for exactly this: the lessor may report fuel combustion at a leased asset as Scope 1 only if it can demonstrate operational control over that asset, and only if the decision is disclosed and justified in the public report. The default rule stands, and stepping away from it takes an argument.
The questions that settle the case aren't on the invoice. They're in the contract: who hires the staff, who owns and maintains the equipment, who decides the fuel, who could shut the operation tomorrow. If every answer points to the operator, it's Scope 3.
Shared infrastructure. If your central boiler also heats the canteen or the shops, that gas stays in your Scope 1, because you operate the boiler. What moves to Scope 3 is only what the third party operates. If there's a single meter, split the consumption and write the criterion down.
The mirror case. If you are the one renting a space from someone else and energy comes bundled in the rent, table A.1 of the same appendix looks at you as the lessee: under operational control, what you consume in the leased space is your Scope 1 and 2. You can only move it to Scope 3 if you demonstrate you don't have operational control over that space, and justify it in the report.
What about ISO 14064-1? Same logic, different labels
ISO 14064-1:2018 (in Chile, NCh-ISO 14064-1:2019, the basis of the HuellaChile programme) consolidates the same way: by control, financial or operational, or by equity share. What changes is the classification. There are no scopes, just six categories. The kitchen's gas is category 1, direct emissions, for the concessionaire. For the university it goes in category 5, indirect emissions associated with the use of products from the organization, in the downstream leased assets subcategory described in Annex B. If your reading was purchased service, category 4.
The real difference is elsewhere. The GHG Protocol asks you to cover every relevant Scope 3 category and justify any exclusion. ISO has no mandatory list: clause 5.2.3 asks the organization to define its own significance criteria, apply them to each indirect source and document what it leaves out. In theory, the university could conclude the canteen's gas isn't significant and exclude it.
In practice we don't recommend it. The data is already in the folder, with an invoice to back it. It's the asset-specific method the GHG Protocol guidance puts first in its decision tree, the highest-quality one. A verifier under ISO 14064-3 will ask why a documented source with primary data was left out. That conversation isn't worth having.
How we measure it
- Write the boundary down. Operational control. List the spaces a third party operates and the contract behind each one. That equipment sits outside your Scope 1.
- Take the operator's invoice. In the canteen case, kilos of LPG or cubic metres of natural gas, for the period that matches the reporting year. If the contract covered only part of the year, count only that part, as the Category 13 guidance asks.
- Apply the fuel or electricity emission factor. That's formula 8.1 of the technical guidance: quantity times emission factor. In Chile, with the HuellaChile factors.
- Report it in Scope 3, Category 13 or Category 1 depending on whether you charge or pay (category 5 or 4 under ISO), with a note saying the figure corresponds to the operator's Scope 1 and 2.
- Keep the invoice and the contract. They're the evidence for the number and for the criterion.
A shared invoice is exactly what a verifier wants to see: a measured figure, with backup, from whoever consumed the energy. The only thing to resolve is which box to put it in.
References: GHG Protocol, Corporate Accounting and Reporting Standard (revised edition, WRI/WBCSD, 2004), chapter 3 and Appendix F. GHG Protocol, Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011), section 5.2 and Appendix A, tables A.1 and A.2. GHG Protocol, Technical Guidance for Calculating Scope 3 Emissions (v1.0, 2013), chapters 8 and 13. ISO 14064-1:2018, clauses 5.1 and 5.2.3, Annex B and Annex H.
