Under financial control, control and joint control decide whether an investee is in your Scope 1 and 2. A subsidiary is in at 100%. A joint arrangement under joint control is in at your equity share, however your accounts record it. An associate or other investment goes to Scope 3, Category 15, at your share.
Where does each investee go under financial control?
How your accounts treat it | Scope 1 and 2 | Otherwise |
Consolidated subsidiary (you control it, at any % owned) | 100% | |
Joint arrangement under joint control: an AASB 11 joint operation (your accounts include your share line by line) or joint venture (equity-accounted) | Your equity share | |
Associate (significant influence, no joint control), equity-accounted | 0% | Your equity share of its Scope 1 and 2, in Category 15 |
Investment at cost or fair value, no significant influence | 0% | Category 15 at your share. A threshold (for example 1% equity) is allowed if you disclose and justify it. AASB S2 materiality still applies |
Franchise (no equity, no control) | 0% | The franchisor reports the franchisees' Scope 1 and 2 in Category 14 |
The Corporate Standard says that emissions from joint ventures where partners have joint financial control are accounted for on the equity share approach.
Source: GHG Protocol Corporate Standard (2004), chapter 3, page 17 and Table 1; Scope 3 Technical Guidance (2013), Table 15.1 and Category 14.
The other two approaches give different results. Under equity share, an associate is also in your Scope 1 and 2 at your equity share. Under operational control, a joint arrangement you operate is in your Scope 1 and 2 at 100%. One that no partner operates alone goes to Category 15 at your share. See Equity share, financial control and operational control compared.
How do you decide whether you have joint control?
You have joint control when the contract requires the unanimous consent of the parties that share control for decisions about the relevant activities. Your finance team makes the same assessment for AASB 11. Use its conclusion.
Keep the joint arrangement agreement and the AASB 11 classification as evidence. This is a judgement. Record it in your boundary document and discuss it with your auditor.
If you have significant influence but not joint control, the investee is an associate. It goes to Category 15.
How do you tell a joint operation from a joint venture?
Ask your finance team how the accounts record it. Under AASB 11, a joint operation gives you rights to its assets and obligations for its liabilities, so your accounts include your share of each line. A joint venture gives you rights to its net assets only, so your accounts show one equity-accounted line.
Under financial control, both are in your Scope 1 and 2 at your equity share. The difference decides which line of the AASB S2 investee split they go in.
If Bluegum and a partner jointly ran an unincorporated warehouse and each recorded 50% of its costs, Bluegum would count 50% of its emissions in Scope 1 and 2. Who runs an operation day to day does not change the result under financial control.
How do you calculate your share of an investee's emissions?
Attributable emissions = the investee's Scope 1 and 2 emissions × your equity share.
Use your share at year end or the average for the year, on the same basis every year.
Bluegum's three investments for FY26. The joint venture's share goes in Scope 1 and 2. The other two go to Category 15:
Investment | Data | Working | Where it goes (tCO2e) |
Coastline Kayaks, 50% joint venture under joint control | Coastline's own Scope 1 of 400 (gas) and Scope 2 of 200 (electricity) | 600 × 50% = 300: Scope 1 200, Scope 2 100 | Scope 1 and 2: 300 |
Ridgeline Supply Co, 25% associate | No emissions data. Revenue $40 million, wholesale sector factor 0.03 kg CO2e per $ | $40,000,000 × 0.03 kg = 1,200 t; 1,200 × 25% | Category 15: 300 |
Shares in a listed retailer, 0.05% | The investee publishes Scope 1 and 2 of 18,000 | 18,000 × 0.05% = 9. Excluded under Bluegum's 1% threshold (see below) | Category 15: 0 (excluded) |
Category 15 total | Ridgeline only | 300 |
The investee's own Scope 3 is optional in Category 15. Include it if it is material to you under AASB S2.
This collection does not cover financed emissions. Banks, insurers and asset managers have specific Category 15 requirements under AASB S2.
What data do you ask each investee for?
In order of preference:
Its Scope 1 and 2 emissions for your reporting period, with the consolidation approach and period it used. If its year ends on a different date, use its most recent 12-month figures that you can get without undue cost or effort. Disclose any significant event between its year end and yours that changes its emissions (AASB S2 B19).
If it has no emissions figures: its total revenue (not your share) and its industry code, ideally ANZSIC. Multiply revenue by a sector factor in kg CO2e per $, then by your share.
Sector factors per $ of revenue can include upstream emissions, not only Scope 1 and 2. Prefer a factor that covers Scope 1 and 2 only. If you can only get one that also includes upstream emissions, disclose that, and say the figure is likely overstated (AASB S2 B40).
Can Bluegum leave out the 0.05% shareholding?
Yes, if Bluegum discloses and justifies it. The Scope 3 Technical Guidance (Table 15.1) allows a threshold, such as 1% equity, below which you leave investments out. Bluegum's threshold is 1%.
Under AASB S2, materiality also applies. An ownership threshold does not measure size: a small share of a heavy emitter can be material. So Bluegum estimates first and tests the estimate against the line it would sit in. The attributable 9 tCO2e is 2.9% of Category 15 (9 / (300 + 9)) and 0.06% of Scope 3 (9 / 15,935). It is not material under AASB S2. Bluegum records the exclusion with that estimate and discloses the threshold. See Exclude something and defend the exclusion.
How do you calculate Category 14 for franchises?
The franchisor reports the franchisees' Scope 1 and 2 for the year. Two methods (Scope 3 Technical Guidance, Category 14):
Franchise-specific: collect each franchisee's energy and fuel data, or its Scope 1 and 2.
Average data: estimate each franchise from an average per store or per m2.
Three of Bluegum's four Basecamp stores sent their electricity and gas bills: 36, 40 and 44 tCO2e. The fourth sent nothing. Bluegum estimates it at the average of the other three: (36 + 40 + 44) / 3 = 40. Category 14 total: 36 + 40 + 44 + 40 = 160 tCO2e.
Do not count again in Category 14 anything already in your Scope 1 and 2, such as a store you own and lease to a franchisee. See Assets you lease out to others.
What does AASB S2 add?
AASB S2 paragraph 29(a)(iv) requires you to split your Scope 1 and 2 into two lines:
The consolidated accounting group: your parent and consolidated subsidiaries, plus your share of any joint operation your accounts include line by line.
Other investees: the share of any other investee you include in Scope 1 and 2 under your approach, such as a joint venture under joint control.
Disclose both lines, even when one is nil, and say which approach you used to measure them.
Under financial control, Bluegum's Scope 1 and 2 is 3,845 tCO2e. Line 1 is 3,545 tCO2e. Line 2 is 300 tCO2e, its 50% share of Coastline Kayaks. Ridgeline is an associate, so it is in neither line. It is in Category 15.
What this means in Avarni
Add joint ventures and joint operations under Organisation › Entities with the matching Type and Ownership %.
Under financial control, do not load a joint venture's or associate's own activity data at 100%. Enter only your share. A joint venture under joint control goes in Scope 1 and 2, with its Scope 1 and Scope 2 shares as separate entries. An associate goes in Category 15.
Add each attributable figure in the Emissions Hub with Add emission entry. Use Directly enter CO2e amount for an investee's reported figure. Use Calculate based on factor for a revenue-based estimate, so the factor and the quantity stay visible. See Add and review emission entries by hand.
Record each figure's source in the entry description, and each investee, its accounting treatment, your joint control assessment, your share and its data source in your boundary document. See What goes in your boundary document.