To calculate the carbon footprint of a corporate group with multiple plants or workplaces, it is necessary to define the organizational boundaries before starting to collect data. Whether subsidiaries, industrial facilities, business units, or shareholdings in other companies are included in the emissions inventory depends on the reporting standard, but above all on the consolidation approach we choose, or the one that is most appropriate in each case.

If a company has multiple operating sites or holds shares in different companies, there is no single predetermined answer. International reference methodologies, such as the GHG Protocol or ISO 14064, set out clear rules for defining what to include in your organizational carbon footprint and avoiding errors in emissions reporting.

Why this decision must be made before you start calculating

When addressing the carbon footprint of a company or group with multiple plants, sites, business units, or subsidiaries, defining the organizational boundaries is the first technical phase of any greenhouse gas (GHG) inventory. If this step is postponed or carried out without a clear methodological criterion, the subsequent calculation process will lose validity, consistency, and comparability over time.

Setting from the outset which facilities or companies are included directly affects the collection of primary data. It determines which plants must be asked for electricity consumption, which fossil fuels are recorded, or how staff travel and logistics between sites are accounted for.

Changing the organizational boundary mid-project creates inconsistencies in emissions histories, complicates tracking reduction plans, and may invalidate an external verification audit. In addition, if the organization’s objective is to report under European regulations (such as the CSRD Directive) or to register in official registries, applying an incorrect criterion may result in inconsistent or non-recognised reporting.

The three ways to decide what is included in your carbon footprint

When assessing the carbon footprint of multiple plants or subsidiaries, international emissions accounting standards provide three methodological approaches for consolidating an organization’s data. The company or group must select a single criterion and apply it consistently across all its facilities and investee companies, so that nothing relevant is left out and no emissions are attributed simultaneously to two workplaces or companies, resulting in double counting or a scope error.

1. Based on who controls day-to-day operations

This approach is technically known as the operational control criterion. Under this method, the company accounts for 100% of the emissions from those plants, offices, or sites where it has full ability to introduce and apply its operational, environmental, and safety policies.

If the organization manages a plant’s day-to-day operations, its Scope 1 emissions (direct combustion, vehicle fleet, refrigerant gas leaks) and Scope 2 emissions (electricity and thermal energy consumption) are fully included in the group’s inventory. Conversely, if the company holds shares in a site but does not intervene in its direct management or daily procedures, that facility’s emissions will not be counted within Scopes 1 and 2, but will instead be analysed under Scope 3.

2. Based on who is the majority owner

Technically referred to as the financial control criterion, this approach determines that the company must report 100% of the emissions from all facilities or subsidiaries over which it has economic control. This occurs when the organization has the ability to direct the site’s financial and operating policies in order to obtain benefits from its activities.

In general, financial control coincides with holding more than 50% of the voting rights or ownership of the company, although it may also exist in certain situations where the organization does not hold the majority of the capital but does have the ability to direct the entity’s financial and operating policies.

If the parent company exercises economic control over a subsidiary, it assumes all of that subsidiary’s GHG emissions within its own Scopes 1 and 2, regardless of the operational autonomy that local management at that plant may have.

3. Based on the percentage ownership in each company

The equity share approach (or equity share) allocates emissions strictly in proportion to ownership of share capital. The company accounts within its Scopes 1 and 2 for the exact percentage of emissions that corresponds to its economic interest in each company or subsidiary.

If the company owns 40% of the shares in an industrial plant, it will attribute to its direct inventory 40% of the electricity consumed, 40% of the fuel used, and 40% of any other emissions generated at that facility. This criterion faithfully reflects the company’s economic risk and financial responsibility for the emission sources, although it often requires a more complex data management effort.

Three simple examples to identify which option applies to you

To understand how to apply these approaches when calculating the carbon footprint of a corporate group, it is useful to review practical cases commonly found in the industrial and corporate landscape.

Example 1: Company with two wholly owned plants

A manufacturing company owns 100% of two production plants located in different industrial estates. Both facilities share management, purchasing policies, and operating procedures.

In this scenario, the three approaches lead to the same result: the company must include subsidiaries in the carbon footprint or consolidate both plants at 100% within its Scopes 1 and 2. There are no differences in consolidation, so the calculation will directly add the fuel and electricity consumption and fugitive emissions from both sites.

Example 2: Company with a 30% stake in a subsidiary

A corporate group acquires 30% of the shares in a logistics company. The remaining 70% belongs to other partners who manage the day-to-day operation of the truck fleet and set the subsidiary’s economic guidelines.

How emissions are treated will depend on the criterion selected:

• Operational control: 0% is reported in the parent’s Scope 1 and 2, as it does not direct day-to-day operations. Emissions associated with this investment are calculated under Scope 3 (Category 15: Investments).
• Financial control: 0% is reported in the parent’s Scope 1 and 2, as it does not hold majority economic control. It is also accounted for under Scope 3.
• Equity share: The parent company must add exactly 30% of all emissions from the logistics subsidiary within its own Scopes 1 and 2.

Example 3: Company in a joint venture (50/50)

Two companies create a 50% joint venture to operate an energy facility. The bylaws stipulate that the first company assumes full technical and operational management of the plant, while the second acts solely as an investing partner.

If the first company uses the operational control approach, it will consolidate 100% of the plant’s emissions within its Scopes 1 and 2, since it carries out day-to-day operations. By contrast, if it uses the equity share approach, it will add only 50% of the emissions to its direct inventory, with the other 50% corresponding to the partner company.

What happens if you get it wrong or change criteria later

Choosing an inappropriate consolidation criterion when addressing the carbon footprint of a corporate group, or changing the methodology without a well-founded technical justification, creates problems for corporate environmental management.

First, changing the organizational boundary from one year to the next breaks metric comparability. If a corporate group reports its emissions under operational control for one year and then switches to equity share the next, the variations recorded in the footprint will not reflect a real reduction or increase in emitted gases, but merely an accounting change. This makes it necessary to recalculate the base year (base year recalculation), a laborious process that requires redoing past inventories under the new rules.

Second, presenting consolidated data using ambiguous criteria may result in nonconformity in verification processes under ISO 14064 or the GHG Protocol. Auditing bodies assess whether the organizational boundary is defined clearly, documented, and not altered without valid methodological reasons.

Finally, for clients, investors, or public administrations, unjustified variations in emissions data undermine the credibility of the corporate group’s sustainability strategy and may lead to claims due to a lack of transparency in the information reported.

How we help you at Solid Forest to define it and calculate it correctly from the first year

At Solid Forest, we provide technical rigour to define your company’s organizational boundary with assurance from the outset.

Through our carbon footprint consulting, we assess the group’s governance and ownership to determine whether you should include subsidiaries in the carbon footprint directly or treat them under Scope 3. This ensures maximum methodological consistency for official audits.

For multi-site organizations, we combine specialist consulting with proprietary technology. We provide CCMetrics, our cloud software for calculating and managing the carbon footprint of organizations with multiple plants, subsidiaries, or business units. The platform centralises Scope 1, 2, and 3 data, maintains inventory traceability, and delivers consolidated results as well as breakdowns by site, period, or emission source.

In addition to calculation, CCMetrics enables you to set reduction targets, monitor progress, and compare each site’s performance against the base year. Its dashboards and indicators help detect deviations, identify sources with the greatest improvement potential, and turn the emissions inventory into a practical tool to drive decarbonisation and communicate progress consistently.

If you want to calculate your entire organization’s carbon footprint, integrate data from your different sites, and reliably track your reduction targets, request technical advice and find out how CCMetrics can be adapted to your company.