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  2. Financed emissions
  3. Navigator: Estimating financed emissions

How to select the correct asset type

Understanding the difference between asset types and when to select each one.

What are the asset types on Pathzero Navigator? 

The types of assets available on Pathzero Navigator align with the asset types in the Partnership for Carbon Accounting Financials (PCAF) Standard – which provides the methodology that Navigator uses to calculate financed emissions.

Currently, there are four asset types supported on Pathzero Navigator, with more expected to be added over time. These are:

  • Private company
  • Listed company
  • Project
  • Commercial real estate

The asset types refer to whom the financing is being provided - i.e., whom you are investing in, not to the type of company you, as the user of Pathzero Navigator, work for.

Why is selecting the correct asset type important? 

It is crucial to select the correct asset type as it determines which emissions calculation methodology should be used according to the PCAF Standard. The choice of asset type can materially impact the calculation of emissions, ultimately affecting the outcomes and conclusions drawn from the carbon accounting process. 

When should each asset type be selected?

The following provides a guide to when the asset types should be selected:

  1. Private company: Select this asset type when you have provided financing to a private (i.e., non-listed) company. Once selected, later in the journey, select whether the financing was equity or debt, but at this stage, the important factor is the private nature of the company you have financed.
  2. Listed company: Select this asset type when you have provided financing to a publicly traded company (I.e., listed). Once selected, later in the journey, select whether the financing was equity, a private loan, or a listed bond, but at this stage, the important factor is the public nature of the company you have financed.
  3. Projects: Select this asset type when you have provided the financing that is designated for a defined activity or set of activities, such as the construction and operation of a gas-fired power plant, a wind or solar project, or energy efficiency projects. Once selected, later in the journey, select whether the financing was equity or debt.
  4. Commercial real estate (CRE): The selection criteria for this asset type are more complex. When to select this asset type is explained below, but if in doubt do not hesitate to reach out to Pathzero for support.

In all of the below examples, the definition of CRE implies that the property is used for commercial purposes, such as retail, hotels, office space, industrial, or large multifamily rentals. In all cases, the owner of the building uses the property to conduct income-generating activities.

Select this asset type when:

  • You have provided an on-balance sheet loan specifically for the purchase and/or refinance of CRE.
  • You have made an on-balance sheet investment in CRE but have no operational control over the property. These investments consist of deals where the investor partially owns the building in a joint venture, joint operation, or in joint ownership, but doesn’t have the full authority to introduce and implement operating policies at the property.

Do not select this asset type when:

  • You have invested in a listed CRE company. In this instance, you should select ‘listed company’.
  • You have lent money to a CRE company for a different purpose (I.e., not for property) or you have provided an unsecured loan to a CRE company. In these instances, it is classified as a business loan and you should select ‘private company’ or ‘listed company’ as appropriate.
  • If the investment is more adequately defined as CRE construction activity (including new construction and major renovations), this should be captured through the ‘project’ asset type.