While Scope 1 emissions refer to direct greenhouse gases emitted from sources that an organization controls, such as on-site combustion in boilers or company vehicles, this is less relevant in the context of leased buildings.

Scope 2 emissions are crucial when considering the sustainability impact of leased buildings. These emissions are indirect, originating from the generation of purchased energy. In a leased space, tenants typically report Scope 2 emissions. This scenario arises because the energy generation, like heat from a basement boiler, is usually controlled by the landlord or building management, not the tenant.

The distinction here is operational control. Operational control exists when a company or its subsidiary can implement its operating policies at a facility. In leased buildings, the landlord often retains this control over energy generation systems. As a result, the landlord reports the direct emissions (Scope 1) associated with this energy generation.

Meanwhile, tenants, as consumers of this energy, report the emissions under Scope 2.

For instance, if a tenant occupies a space where the landlord controls the central heating system, the emissions from heating are not directly generated by the tenant. Instead, they stem from the landlord's energy generation. Thus, the tenant reports these emissions as Scope 2, reflecting their indirect role in the emissions process.