Coastal Enterprises Inc. (CEI) is a private, nonprofit Community Development Corporation (CDC) and Community Development Financial Institution (CDFI) founded in 1977 to develop job-creating natural resource industries and small business ventures. CEI serves all of Maine, its primary market, and areas of northern New England and upstate New York.
CEI has participated in over $1 billion in financing to 1,500 ventures. CEI consists of seven nonprofit and three for-profit subsidiaries, and it also manages several socially responsible venture capital funds. The corporation owns dozens of subsidized housing units that it leases out, manages one subsidized housing building owned by another company, leases office space, and owns and operates three other buildings.
When determining its organizational boundary, CEI wanted to make sure that the emission sources it could directly affect through GHG management strategies could be categorized as scope 1 or 2 and that those GHG sources over which it had little control would be categorized as scope 3. To reach this goal, CEI found that the equity share approach was not adequate because it had several small-equity investments over which it had little control. Financial control was inadequate because it did not always include significant and manageable emissions sources in scope 1 and scope 2. Accordingly, CEI decided to use the operational control approach to set its organizational boundary.
But even after it had chosen the operational control method, CEI still had diffi culty determining whether or not electricity use in some or all of its subsidized housing properties leased out to tenants would be included in scope 2 or scope 3. In order to decide in a transparent and consistent way how to categorize these emissions, CEI referred to legal language in its leasing agreements. The property that CEI manages but does not own is under a capital lease, meaning that CEI is responsible for all the risks and rewards of ownership, including operational control; thus indirect emissions from electricity are categorized as scope 2. Conversely, all emissions from the subsidized housing units owned by CEI but leased out to tenants are categorized as scope 3, because the operational control of these facilities belongs to the tenants who lease the properties under operational leases.
Using this approach, CEI is accounting for scope 1 and scope 2 emissions from the three buildings it owns and operates plus its leased offi ce space and the one affordablehousing building that it manages on behalf of another company. CEI’s inventory of GHG emissions from all these properties has enabled it to identify and pursue opportunities to reduce emissions in those buildings whose operations it controls. CEI will account for the remaining emissions from the other properties and activities over which it has no operational control as scope 3 if accurate activity data are available.