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In and Out: What to Include in Your Sustainability Report and Why

Sustainability Report Guide

“Control approach”, “equity share approach”… Sometimes the hardest part of sustainability is simply figuring out what to include or, critically, exclude from your report. Are 100% of the carbon emissions from my joint venture-owned buildings really supposed to be included in GRESB? Should all corporate flights be rolled into my CDP report? Find out in the following sustainability report guide.

To help us answer these questions, the technocrats at the World Resources Institute and the World Business Council for Sustainable Development prescribed two mutually exclusive “boundary-setting approaches” in their treatise on carbon accounting called the WRI/WBCSD GHG Protocol. Those approaches are:

  1. Control Approach which breaks down into:
    a.  Operational Control: Report on 100% of anything where you have the authority to introduce and implement operating policies. This is the most commonly used boundary-setting approach.
    b.  Financial Control: Report on 100% of anything in which you bear the majority risk/reward from the operation’s financial performance. Note 50% ownership or more is NOT a criteria for financial control. Instead, it is merely whether or not you bear the majority risk/reward, however that may be contractually allocated between you and the other owner(s).
  2. Equity Share Approach is where you report in proportion to your ownership in the operation. If you own 32% of a factory, for example, you report on 32% of the factory’s emissions. This is the simplest, most straightforward accounting approach.

Which approach is right for me?

Pick one of the two approaches and stick with it, goes the logic of sustainability reporting. To mix them is anathema to reporting ground rules, the violation of which leads to double counting of carbon emissions and a lack of comparability between reports since one reporter can include something another omits entirely. For this reason boundary-setting approaches are like oil and water: they cannot be combined.

“The two approaches to setting reporting boundaries are like oil and water: they do not mix.”

Unfortunately, reporting standards like CDP, GRESB and GRI don’t apply these approaches evenly. CDP, for example, lets you choose an approach whereas GRESB dictates an unorthodox blend of operational, financial and equity control. This bizarre mix of approaches causes a few idiosyncrasies to beware of. First, reporters are encouraged to report on all buildings in their portfolio, even if they don’t have operational control (buildings not under your operational control are supposed to be dumped into GRESB’s so-called “indirectly managed asset” category instead of being excluded from your report, as they would using a traditional operational control approach. Second, for your joint ventures, you have to pick between reporting either 100% a building’s energy, carbon and water performance (financial control) or the relative percentage (equity share). This confusing application of multiple accounting regimes means GRESB double counts some buildings, a fact it bluntly acknowledges saying simply “this may result in an asset being included in two separate submissions” (p. 68, 2015 GRESB Guidance). Other problems that arise are (1) CDP and GRESB reports can show wildly different outcomes and (2) each GRESB report may only be loosely comparable to the next.

What to include and when?

While control and the equity share approach don’t mix under globally accepted sustainability accounting practices, GRESB’s accounting standards are different. So use one approach for CDP and stay on your toes when doing GRESB since you may end up using both approaches. Here’s the suggested way to draw your boundaries for GRESB and CDP.


Asset Type GRESB CDP
Directly managed 100% 100%
Indirectly managed 100% 0%
Corporate offices 0% 100%
Joint venture assets 100% OR proportionally. Already included with directly managed, if applicable.

Fortunately, Measurabl users don’t have to worry about doing anything to ensure the accuracy of their reports – boundaries are handled automatically by our software — but these concepts are extremely important to understand for communicating to stakeholders and when working with your team to establish reduction targets. After all, you don’t want to spend all your time reducing emissions from corporate travel, or sub-metering tenant suites if this information won’t be reported.