Two categories that exist on paper but not in practice
Most Scope 3 inventories cover the categories that show up in every spend file: purchased goods, business travel, employee commuting, upstream transport. Categories 13 (Downstream Leased Assets) and 14 (Franchises) rarely make the cut. In our experience reviewing inventories across sectors, these two are the most commonly omitted — not because a company assessed them and found them immaterial, but because nobody looked.
That distinction matters. The GHG Protocol Corporate Value Chain (Scope 3) Standard doesn't require every company to quantify every category. It requires a relevance screening — a documented rationale for what's included and excluded. Skipping Category 13 because your business doesn't lease out real estate is a defensible exclusion. Skipping it because the finance team never flagged it as a possibility is not, and it's the kind of gap that shows up when an assurance provider or regulator starts asking for the screening memo.
Category 13: Downstream Leased Assets
Category 13 covers emissions from the operation of assets that your company owns but leases out to another entity, where you are the lessor. The clearest case is commercial real estate: if your company owns office buildings, retail space, warehouses, or data centers and leases them to tenants, the energy those tenants consume to run their operations in that space falls under Category 13.
This category is structurally the mirror image of Category 8 (Upstream Leased Assets), which captures the same relationship from the tenant's side. If you lease space from a landlord, your use of that space is Category 8. If you're the landlord, your tenants' use of that space is Category 13. Many companies appear on both sides of this pair without tracking either.
For most operating companies, Category 13 is genuinely immaterial — they don't lease assets to others, so there's nothing to report, and a one-line note in the inventory boundary explaining that is sufficient. But for real estate investment trusts, commercial landlords, equipment leasing companies, and any business with a meaningful sub-leasing or rental arm, this category can be one of the largest line items in the entire Scope 3 inventory, sometimes exceeding Scope 1 and 2 combined. The data quality hierarchy applies here as everywhere: spend-based estimates using floor area and building-type energy benchmarks sit at the weak end; metered tenant energy data, submetering, or utility pass-through billing records move you toward supplier-specific quality.
Category 14: Franchises
Category 14 covers emissions from the operation of franchises — businesses that operate under your brand, systems, or license, but that you, as the franchisor, don't directly control or own. The franchisee's energy use, refrigerant use, waste generation, and other operational emissions at the franchise location belong in your Category 14, even though you don't pay their utility bill or manage their facility.
This is a category almost custom-built for a specific set of business models: quick-service restaurants, hotel chains, retail franchise networks, and service franchises (everything from fitness studios to auto repair). If your revenue model depends on licensing a brand and operating standards to independently owned locations, Category 14 is very likely material, and in many franchise-heavy sectors it can dwarf the franchisor's own direct operations, simply because the franchisor's headquarters footprint is small relative to the hundreds or thousands of locations operating under its name.
The practical obstacle is data access. Franchisees are legally separate businesses, often with limited sustainability reporting capability and no contractual obligation to share energy data with the franchisor. This pushes most Category 14 inventories toward average-data methods initially — applying typical energy intensity benchmarks per location type, scaled by the number of franchise units — with a roadmap toward supplier-specific data as franchise agreements are updated to include energy or emissions reporting requirements.
Why the screening gap persists
The root cause in both cases is the same: these categories don't map neatly onto existing financial or procurement data flows. A spend-based screen built off accounts-payable data will surface purchased goods, services, and travel because those are things the company pays for. It won't surface Category 13 or 14 at all, because the company isn't the one incurring the spend — a tenant or franchisee is. Finding these categories requires asking a different question: not "what do we buy," but "what business relationships generate emissions we don't directly pay for but are structurally tied to." That's a business-model question, not a procurement question, and it's why relevance screening has to involve people who understand how the company actually makes money, not just the sustainability team working from a spend ledger.
Why it's worth fixing now
As disclosure regimes mature — CSRD's double materiality assessment, California's SB 253 with its phased assurance requirements — the expectation shifts from "did you report Scope 3" to "can you show your basis for scoping it the way you did." A documented relevance screen that explicitly considers and excludes Categories 13 and 14 is defensible. An inventory that's silent on them, for a company where either category is plausibly material, is a gap an assurance provider or regulator will find before you'd like them to.