Summary 

Following recommendations from the Scope 2 Technical Working Group and approval by the GHG Protocol Independent Standards Board to progress to public consultation, revisions to the Scope 2 Guidance (2015) will be shared through a 60-day public consultation period, starting in October. In the proposed revisions, the structure of the updated scope 2 reporting framework would remain the same, including a continuation of the dual reporting requirement for both the location-based and market-based methods. Changes to the location-based method (e.g., updated emission factor hierarchy, requirement to use the most precise emission factors accessible, a new definition of accessible data) and market-based method (e.g., hourly matching requirement, deliverability requirement, new emission factor requirements) prioritize improved accuracy, greater transparency, and provide more comparability inventory values for use by external disclosure frameworks and initiatives. The proposed revisions also introduce several measures to improve the implementation feasibility of the updates (e.g., load profiles for hourly matching, exemption thresholds to hourly matching for smaller organizations, a legacy clause for existing contracts, and a multiyear phased implementation). This is the first of several communications in a series leading up to and continuing through the Scope 2 public consultation. These updates will help explain what is being proposed and why, providing additional context for stakeholder engagement. Future blog posts will delve into hourly and deliverability requirements and provide guidance on how to participate in the upcoming consultation process. 

I. Introduction 

GHG Protocol is updating its corporate suite of standards and guidance, including the Scope 2 Guidance (2015). The scope 2 revision has been shaped by extensive stakeholder input, beginning with the 2022–2023 global survey and proposals process. Since September 2024, the Scope 2 Secretariat has convened a Technical Working Group (TWG) of 45 energy and accounting experts from around the world representing academia, government entities, non-profits, and private sector organizations. On July 14, 2025, the GHG Protocol Independent Standards Board (ISB) voted on and approved moving the Scope 2 TWG’s proposed revisions into public consultation. The public consultation period will be an opportunity for all stakeholders to feed into the standards development process on these topics and to provide their feedback on the proposal. Engagement in this consultation process is critical, as changes made in this update process will shape how companies account for and report emissions related to their electricity usage through mandatory climate-related financial disclosures and target setting programs based on the GHG Protocol for years to come. 

As part of the ongoing updates to the corporate standards suite (Corporate Standard, Scope 2 Guidance, Scope 3 Standard) and the Actions and Market Instruments work, the Scope 2 update sits within this broader process. All components will ultimately come together as a single, unified standard. For the overall timeline, please see this post.  

II. Context 

After a decade of use, the Scope 2 Guidance (2015) needs updates to reflect a modern reporting landscape, evolving grids, and closer scrutiny of claims. While the Guidance was entirely voluntary when published in 2015, today companies navigate multiple mandatory disclosure regimes that use scope 2 reporting differently. Some (e.g., ESRS) require both location- and market-based reporting aligned to GHG Protocol, while others (e.g., IFRS) require only location-based reporting. Meanwhile, voluntary programs (e.g., SBTi, RE100) add their own eligibility and boundary rules. To reduce confusion and support comparable, transparent disclosures based on consistent application, GHG Protocol’s revisions are being developed with this alignment in mind. Please see our overview of major disclosure rules that use GHG Protocol (including IFRS S2, ESRS/CSRD, and CA SB 253) for an overview of how requirements are converging and where gaps remain. The proposed updates aim to keep scope 2 inventories decision-useful, interoperable across frameworks, and provide comparable reporting data while staying grounded in GHG Protocol accounting principles. Please see the GHG Protocol Decision-making Criteria and Hierarchy to for a detailed overview of this approach. 

Several key areas of concern raised by stakeholders about the Scope 2 Guidance (2015) include: 

• Lack of accuracy and comparability of scope 2 values
• Double counting risks
• Decision-usefulness of market-based method claims 

Accuracy and comparability: Under current rules, a building using electricity in California can match night-time electricity consumption with daytime energy attribute certificates (EACs such as Renewable Energy Certificates RECs or Guarantee of Origins GOs) from generators in Texas because annual matching and broad market boundaries are permitted. Today, the U.S. and EU are often treated as single markets. Elsewhere, national borders often define market boundaries. This asymmetry creates two kinds of problems: boundaries that are too broad allow claims disconnected from the electricity available to serve the load on the connected grid at the relevant time; and boundaries that are too tight can ignore real cross-border power flows, producing the opposite distortion. Both cases reduce alignment with a value-chain inventory for purchased and consumed electricity, while challenging the comparability of scope 2 reported data when used in disclosure programs.  

Double counting risks where residual mix data are missing or not applied: Under current market-based method rules (MBM), if one organization retires EACs and another organization on the same grid uses a default average factor, rather than a residual mix factor that deducts those retired EACs, the same clean generation is counted twice. Low adoption or availability of residual mixes that subtract voluntary claims undermines comparability and leads to systematic overstatement of clean supply in market-based inventories. 

Decision-usefulness of market-based method claims: Increased scrutiny of reported scope 2 values has focused on the accuracy and decision-usefulness of some MBM claims, especially in cases where EACs are perceived to be of lower relevance, such as when they are separated from the underlying power, come from existing resources, or are not deliverable to the grid serving the load. As outlined in the Corporate Accounting and Reporting Standard (2004) and Scope 2 Guidance (2015), there is not always a direct cause-and-effect link between a single organization’s energy purchase and grid-level emissions. However, in aggregate and over time, reported scope 2 emission reductions should approximate actual changes occurring on the grids that supply reporters’ electricity. Closer alignment between changes in reported and actual emissions is crucial for maintaining public trust in inventory reporting and avoiding widespread claims of greenwashing. 

For a complete summary of feedback collected by the Secretariat during the stakeholder survey, please refer to our Detailed Summary of Responses from Scope 2 Guidance Stakeholder Survey. 

To ensure these concerns are adequately addressed, this process has followed GHG Protocol’s Standard Development and Revision Procedure (SDRP), using the Decision-making Criteria and Hierarchy to guide development of solutions that have integrity, support meaningful climate action, and are feasible to implement. Proposals developed in this process are recommended by the Technical Working Group, assessed against the Decision-making Criteria and Hierarchy, overseen by the Independent Standards Board, and tested through a formal public consultation beginning in October, open for 60 days. This will inform further refinement and deliberations by the TWG and ISB as established in the GHG Protocol’s SDRP. 

Before outlining the proposed changes, it is important to recognize that the scope 2 updates are grounded in an attributional value chain inventory. The Decision-making Criteria and Hierarchy are applied on that basis, recognizing that consequential metrics require separate accounting and reporting methodologies. As the ISB decision announcement notes, parallel work is also underway in the Actions and Market Instruments TWG to accurately account for and report clean energy procurement and investment outside of what companies can include in inventories, including the emission impacts of procurements evaluated using marginal emission methods. As part of this process, the consultation will invite feedback on the use of consequential metrics to assess procurement emissions and will connect that input to the parallel work lead by the AMI TWG. 

III. Structure and High-level Changes 

While the revised draft contains updates to the location- and market-based methods, the structure of the updated scope 2 reporting framework will remain the same, including a continuation of the dual reporting requirement for both the location-based and market-based methods. The AMI TWG’s outputs for consequential accounting and related complementary metrics are scheduled to be effective on the same timeline as the LBM/MBM revisions. No new LBM or MBM requirements will take effect before those AMI outcomes are available. With this alignment, organizations will be able to include complementary, impact-focused disclosures within a comprehensive GHG Protocol corporate emissions report, consistently and comparably across the electric power sector and other sectors. 

In general, methodological changes to the two reporting methods prioritize improved accuracy, greater transparency, and provide more comparability inventory values for use by external reporting frameworks and initiatives. This means more temporally specific emission factors for both methods, including hourly accounting in some cases, and more precise geographic boundaries that ensure a credible grid link between reporting organizations and the energy generating resources supplying their power.  

The revised draft also proposes feasibility measures, including for voluntary clean-energy claims under the market-based method. These measures include options to use load profiled to approximate hourly data and exemptions to hourly matching requirements for smaller reporters. A multiyear phased implementation timeline is also proposed. These measures would support the ability of reporting organizations to continue to calculate emissions, often with the same information they use today, in compliance with the updated requirements for scope 2, as well as enable actions and investments to reduce emissions.  

IV. Location-based Revisions 

Summary of proposed changes to the location-based method: 

• Updates to the location-based emission factor hierarchy
• Requirement to use the most precise location-based emission factor accessible for which activity data is also available
• Definition of accessible: publicly available, free to use, from a credible source 

Location-based method emission factor hierarchy: Proposed updates to the location-based method requirements center on a new emission factor hierarchy that provides more guidance on spatial and temporal granularity. Reporting organizations would be directed to prioritize emission factors using the most precise location information (i.e., spatial boundary) first, followed by the most precise time matching (i.e., temporal granularity). For example, given the choice between two emission factors, the first one being a national emission factor with hourly temporal resolution, and the second one being a local emission factor with annual temporal resolution, the second emission factor should be selected. 

In addition, the updated emission factor hierarchy distinguishes between ‘production-based’ factors and ‘consumption-based’ factors, with consumption-based factors prioritized. Production-based factors are calculated using only an average of only the generating resources within a region, while consumption-based factors also account for imported and exported power between regions. By including imports and exports, consumption-based factors more accurately approximate the mix of resources used to deliver power to consumers, therefore these factors are prioritized above production-based factors.  

In general, reporting organizations are required to use the most precise emission factors accessible to them, for which the same level of activity data is also available. For example, if a company has access to hourly emission factors, but can only source annual activity data, they are not required to calculate location-based emissions on an hourly basis and can instead use annual emission factors. However, organizations may want to utilize more temporally precise emission factors and can use load profiles to do this. Load profiles approximate when power is typically consumed, depending on the type of organization (for example: retail business, data center, or hospital) and can be used to translate annual activity data into hourly data for a full year. 

Accessibility: Lastly, a new concept of accessibility is introduced for emission factor sources. Accessible emission factors are defined as publicly available, free to use, and from credible sources. Reporting organizations would not be required to use any factors above and beyond those that can be freely accessed in the public domain. More guidance and definitions for what constitutes a credible source will be further defined in future TWG and ISB deliberations. 

V. Market-based Revisions 

Summary of proposed changes to the market-based approach: 

• Hourly matching: require that all contractual instruments used in the market-based method be matched on an hourly basis, except in certain cases of exemption for smaller organizations
• Deliverability: require that all contractual instruments used in the market-based method are sourced from generation deemed deliverable to the consuming load
• Standard Supply Service (SSS): new guidance for Standard Supply Service and a requirement that a reporting entity shall not claim more than its pro-rata share of SSS
• Residual Mix: updated definitions and where no residual mix is available, require the use of fossil-only rates 

The proposed updates to the market-based method outlined above are designed to strengthen the accuracy, scientific integrity, and enhance comparability when used by disclosure and target setting programs based on GHG Protocol inventories. In addition, revisions aim to better support ambitious climate action by aligning claims with conditions (time, location/deliverability, fair allocation, and accurate residual mixes) that align with research (see Scope 2 TWG Discussion Paper and The Brattle Group Report) showing these conditions are more likely to deliver grid decarbonization in aggregate and over time than annual matching across broad markets. 

Importantly, these revisions operate within an attributional, value-chain inventory accounting and reporting framework. As a result, procurements that are not associated with the organization’s energy consumption (i.e., not time-matched or deliverable to the load, such as many VPPAs) fall more naturally outside the scope 2 inventory. Corporate investment in these projects is a key driver of clean-energy development, and the need for an accurate and comparable accounting framework remains essential. The emissions impacts of these project types are more appropriately reflected through consequential accounting methods, approaches that quantify the system-wide effects of actions such as renewable energy procurement, rather than accounting for them as purchased and consumed electricity within the organization’s value chain. In parallel, the AMI TWG is developing complementary guidance for accounting and reporting the impacts of actions outside the scope 2 inventory, building on input from the Scope 2 TWG. The scope 2 public consultation will include targeted questions to inform the development of metrics for the electricity sector. 

Hourly matching: Under proposed updates to the scope 2 quality criteria, hourly matching would apply whenever an organization uses contractual instruments under the market-based method, either through a voluntary procurement or Standard Supply Service (see below). It does not apply to residual-mix reporting, which may be hourly, monthly, or remain annual. To make hourly matching practical and accessible, organizations may use load profiles, which are simple hourly curves that show how electricity use or generation rises and falls throughout the year. These profiles can help organizations without access to hourly data to do the following:  

• approximate their hourly load from monthly or annual use data
• approximate the hourly granularity of monthly or annual timestamped contractual instruments  

In addition, feasibility exemptions to hourly matching will be evaluated through public consultation to scale requirements proportional to organizational size. Exemptions from hourly matching would target smaller entities, while still requiring larger reporters to hourly match.  

For further details on load profiles and exemptions, please see the implementation measures (feasibility) section below. 

Deliverability: The proposed updates to the scope 2 quality criteria redefine the market boundary to reflect deliverability, which means that electricity from a generator could plausibly be part of the mix serving the reporting entity through an electrically connected grid. In some countries, national borders will still approximate the deliverable boundary, but in cases where grid operations or interconnections differ from national borders, the defined market boundaries would reflect this. Outside a defined boundary, deliverability may also be evidenced through (1) price-based indications of available transmission capacity between adjacent grids, or (2) contracts/instruments showing physical delivery from generation to load.  

This change seeks to move from predominantly national boarder or policy-defined, continent-wide “one market” practices to a deliverability basis applied consistently across regions, supporting a more globally equitable, comparable, and accurate approach. 

Standard Supply Service (SSS): To ensure fair allocation of clean energy resources that are publicly funded, mandated by policy, or part of default utility service, new rules are proposed for allocating SSS resources, and any relevant contractual instruments, to customers. Reporting organizations are able to claim up to their pro rata share of SSS generation, and any contractual instruments from unclaimed SSS are ineligible to be used by other reporting organizations.  

Examples of SSS resources include government mandated clean energy procurement programs, publicly owned facilities where a government entity is the majority owner, and generation resources that are subject to regulated cost recovery from a supplier. 

For example, consider a reporting organization located in a region where 20% of their deliverable power comes from clean energy resources included in their SSS. To claim zero scope 2 emissions under the market-based method this organization could claim 20% of their consumption as zero emissions electricity and would need to procure contractual instruments from clean energy resources for the remaining 80%. Both voluntary and SSS contractual instruments need to align with the updated scope 2 quality criteria.  

Residual mix and fossil-only rates: To reduce the risk of double counting, the public consultation draft proposes eliminating the option to use grid-average emission factors (e.g., the location-based average emission factor) when no residual mix is available. Since certificates claimed under the market-based method are by default also counted in grid average emission factors, eliminating the use of the grid average factor as a fall back ensures those resources aren’t counted twice.  For any consumption not matched with standard supply service or voluntary contractual instruments, organizations are required to either use a residual mix emission factor that excludes all claimed and SSS contractual instruments, or default to either a fossil-only grid-average or fossil emission factor, such as gas, oil, or coal.  

VI. Implementation Measures (Feasibility) 

To ensure that changes to the location- and market-based methods are feasible to implement for reporting organizations, several design features have been proposed, including load profiles, thresholds, and a legacy clause, along with an anticipated phased implementation period providing multiple years between ISB/Steering Committee (SC) approval and required adoption in the updated GHG Protocol Standard. 

Load profiles enable organizations without access to hourly activity data or hourly contractual instruments to approximate hourly data from monthly or annual data. These load profiles are frequently used by grid planners to estimate how much electricity demand is expected during specific hours of the day and can similarly be used by reporting organizations. The proposed updates introduce a hierarchy of load profiles to guide reporters, including facility-specific load profiles, market-boundary load profiles scaled according to utility/customer-class profiles, time-of-use averages, and a flat average across all hours.  

Use of these profiles ensures that organizations that want to use contractual instruments for their market-based inventories, or report their location-based inventories on an hourly basis, can do so whether they have access to hourly data or not.  

Exemption thresholds have also been proposed to exempt smaller organizations from hourly matching requirements. Current proposals under consideration include thresholds based on the volume of electricity consumption in a given grid region and/or on company size. Initial analysis on the application of load thresholds has shown that a majority of CDP reporting companies would be exempt from requirements to hourly match, while the vast majority of electricity load on the grid would still be subject to the hourly matching requirement. 

A legacy clause is being developed to ensure investments made under existing scope 2 accounting rules are appropriately recognized. Proposed approaches, including eligibility, disclosure, and duration considerations, will be presented in the public consultation for stakeholder feedback. 

Phased implementation rules are being discussed to facilitate a smooth transition to new requirements. Following ISB/SC approval and publication of the revised Scope 2 Standard (anticipated late 2027), implementation is expected to phase in over multiple years. Staged effective dates will give organizations, data providers, utilities, and service platforms time to adapt and develop tools, with early adoption encouraged. LBM and MBM requirements will take effect on the same timeline as the AMI TWG’s complementary metrics, meaning no new LBM or MBM requirements will become effective before AMI outcomes are available. This phased approach is intended to support a smooth transition while maintaining the credibility and comparability of inventories.  

VII. Conclusion 

The scope 2 revision represents a major step toward ensuring corporate GHG inventories can remain accurate, comparable, and decision-useful as electricity grids evolve, mandatory climate-related financial disclosure requirements expand, and target-setting initiatives advance. Developed through the GHG Protocol’s codified governance process and shaped by years of extensive stakeholder input and engagement, these proposed updates are designed to improve integrity while remaining feasible to implement. They maintain the dual reporting requirement for location- and market-based methods, strengthen quality criteria for claims, and build in feasibility measures such as load profiles, exemption thresholds, and a legacy clause, alongside a phased implementation period that provides years of lead time before the changes become effective. Importantly, this work remains firmly grounded in an attributional, value-chain inventory, while in parallel the AMI TWG is advancing methods to account for and report on clean energy procurements and investments that fall outside of inventories. These complementary outputs will be effective on the same timeline as the scope 2 revisions, ensuring no new LBM or MBM requirements take effect before the AMI outcomes are also available. Together, these efforts will enable more credible inventories and more consistent disclosures.  

This is the first of several updates in a series leading up to and during Scope 2 public consultation. The next blog in this series will focus in detail on the proposed hourly matching and deliverability requirements, as well as the rationale behind these changes. 

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