Scope 3 Financed Emissions Databases

MAISY Zip Code Emissions Databases Provide Scope 3 Financed Emissions Estimates for Residential Mortgages and Commercial Real Estate Loans



MAISY Scope 3 ZIP Code Databases provide average energy use by fuel type and emissions for residential single family owner occupied dwelling units and commercial real estate loan customers in each ZIP code area in the continental US. Data are also provided for segments within each class (income and floor space for residential; business category and floor space for commercial)

Methodology Summary

MAISY Scope 3 mortgage emissions estimates are provided for each ZIP code area and as a total for all ZIP areas serviced by each financial institution.

MAISY Scope 3 mortgage emissions estimates are developed using the MAISY ZIP Code Utility Customer Energy Use Database by multiplying (1) the number of financed residential mortgages in each ZIP code (provided to us by a financial institution client) by (2) average ZIP single family/duplex electricity kWh, fuel oil, natural gas and propane use, and by (3) fuel-specific EPA emissions factors for that ZIP code. If the financial institution client is able to provide the number of residential mortgages by 3 income and/or 3 floor space segments, the average ZIP single family/duplex energy use averages are also segmented by those variables, providing more accurate emissions estimates.

The PCAF standard requires multiplying these emissions totals by an attribution factor, which is equal to the ratio of the outstanding mortgage balance at the time of GHG accounting to the property value at loan origination. If the financial client provides this data for the ZIP code and/or for customer segments in the ZIP code, these attribution factors are applied to reflect reported emissions only attributable to the financial institution. Otherwise, reported emissions data can be adjusted by the financial institution to recognize the attribution factor.

ZIP code-detail is crucial for accurate accounting of financed emissions as there is significant variation in ZIP-average energy use and resulting emissions. For financial institutions that have mortgage investments across even sub-state regions, variations in emissions factors resulting from variations in electric generation fuels use, can also be significant.

The proposed rule requires emissions reporting in terms of GHG intensity to provide “context to a registrant’s emission in relation to its business scale.” The rule emphasizes the importance of being able to compare the value of the GHG intensity over time to assess the extent to which a financial institution is meeting its goals. The problem with this approach for financed emissions is that (1) year-to-year weather variations, (2) geographic variations in emissions associated with new mortgage originations (as much as a factor of 4 or more) and (3) variations in new mortgage originations floor space (i.e., size of dwelling units) can create a picture of increasing SCOPE 3 GHG emissions intensity even though a GHG index adjusted for these factors would show a reduction in emissions. A whitepaper titled A Solution to Financed Emissions Year-to-Year Inaccuracies is scheduled for publication by May 20 on our whitepaper page. The whitepaper describes this issue in more detail and provides several procedures compatible with the proposed rule and based on long-standing economic index theories and practices.

MAISY Scope 3 commercial real estate (CRE) emissions estimates are developed by multiplying (1) the number of CRE loans by general business type category in each ZIP code (provided to us by a financial institution client) by (2) average ZIP business category electricity kWh, fuel oil, natural gas and propane use, by (3) EPA emissions factors for that ZIP code. If the financial institution client is able to provide number of loans in floor space segments the average CRE energy use averages and resulting emissions estimates are calculated based on average energy use within each segment.

If available, CRE financial attribution factors are applied and the reported emissions reflect only that attributable to the financial institution. Otherwise, reported emissions data are not adjusted and can be adjusted by the financial institution to recognize the attribution factor

As with residential mortgage financed emissions, ZIP code-detail is crucial to accurate accounting of CRE emissions as there is significant variation in ZIP-average energy use and factors that can create significant missinformation regarding financial firm CRE emissions GHG index over time. Reference the link above to see a discussion and appropriate approach to providing a CRE emissions GHG index that accounts for these issues.

Finally, MAISY Scope 3 Database results will be modified to be consistent with final SEC rules that are expected to be announced after May 20, 2022.

Data Items: ZIP Code Scope Financed Emissions Databases
(Data provided for each ZIP code)

VARIABLE GROUPING DATA ITEMS
LOCATION INFORMATION ZIP Code
ZIP Name
County & State
Metro Area
MORTGAGE DATA (PROVIDED BY FINANCIAL INSTITUTION) Option 1: Number of Mortgages Within the ZIP Code Area
or Option 2: Number of Mortgages Within the ZIP Code Area by 3 income categories
or Option 3: Number of Mortgages Within the ZIP Code Area by 3 floor space categories
or Option 4: Number of Mortgages Within the ZIP Code Area by 9 income/floor space income categories
Optional: Attribution factor(s) (ratio of the outstanding mortgage balance at the time of GHG
accounting to the property value at loan origination) matching detail provided with selected option 1-4,
COMMERCIAL REAL ESTATE LOAN DATA (PROVIDED BY FINANCIAL INSTITUTION) Option 1: Number of CRE loans Within the ZIP Code Area
or Option 2: Number of CRE loans Within the ZIP Code Area by business category
or Option 3: Number of CRE loans Within the ZIP Code Area by business/floor space categories
Optional: Attribution factor(s) (ratio between the outstanding amount and the property value at
origination) matching detail provided with selected option 1-3,
Emissions Data Items Calculated for Each ZIP Code
MORTGAGE EMISSIONS DATA Total Annual Emissions (CO2e) (including emissions generated by household electricity,
natural gas, fuel oil and propane use)
CO2 Emissions
CH4 Emissions
N2O Emissions
HFCs Emissions
PFCs Emissions
SF6 Emissions
NF3 Emissions
GHG Intensity Data (see the a whitepaper titled A Solution to Financed Emissions Year-to-Year Inaccuracies describing several options for calculating GHG Intensity
COMMERCIAL REAL ESTATE LOAN EMISSIONS DATA Total Annual Emissions (CO2e) (including emissions generated by commercial firm electricity,
natural gas, fuel oil and propane use)
CO2 Emissions
CH4 Emissions
N2O Emissions
HFCs Emissions
PFCs Emissions
SF6 Emissions
NF3 Emissions
GHG Intensity Data

Data Items: Consolidated Financed Emissions Data
(Sum of all ZIP-level data )


VARIABLE GROUPING DATA ITEMS
DATA PROVIDED BY FINANCIAL INSTITUTION Total Number of Morrtgages
Total Number of Commercial Real Estate Loans
Total Financial Firm Emissions Data
MORTGAGE EMISSIONS DATA Total Annual Emissions (CO2e) (including emissions generated by household electricity,
natural gas, fuel oil and propane use)
CO2 Emissions
CH4 Emissions
N2O Emissions
HFCs Emissions
PFCs Emissions
SF6 Emissions
NF3 Emissions
GHG Intensity Data (see the a whitepaper titled A Solution to Financed Emissions Year-to-Year Inaccuracies
describing several options for calculating GHG Intensity
COMMERCIAL REAL ESTATE LOAN EMISSIONS DATA Total Annual Emissions (CO2e) (including emissions generated by commercial firm electricity,
natural gas, fuel oil and propane use)
CO2 Emissions
CH4 Emissions
N2O Emissions
HFCs Emissions
PFCs Emissions
SF6 Emissions
NF3 Emissions
GHG Intensity Data

Other MAISY Financed Emissions Accounting Data and Services Topics