Scope 2 Guidance update: impact on climate disclosure

The GHG Protocol Scope 2 Technical Working Group has proposed revisions to the Scope 2 Guidance document that aim to improve the location-based method and rewrite the market-based method. The changes promote an overbearing, complex hourly matching of emission factors to energy consumption — an approach that is beyond the resources of most operators and electricity suppliers. These revisions have been driven by standards groups and consultants, with little input from data center operators. It is important for operators and other concerned stakeholders to submit substantive comments to the Working Group to help define the limits of a reasonable accounting process and remove the more onerous revision elements.

KEY POINTS

• The GHG Protocol has released a draft update of the Scope 2 Guidance for comments, with responses due by December 19, 2025, via an online questionnaire. The proposed updates create an overly burdensome, complex emissions accounting process.
• The proposed revisions to the location-based accounting method improve the standard. They provide clearer hierarchy, boundaries and processes for calculating electricity greenhouse gas (GHG) emission factors, while giving operators sufficient latitude to craft a reasonable accounting process for their organizations.
• The proposal for the market-based accounting method represents a radical overhaul and threatens to undermine operators’ investments in unbundled energy attribute certificates (EACs). In its current form. It is unlikely the proposal will survive in its current form.
• Companies that are required to perform Scope 2 accounting are underrepresented in the Working Group. Operators should offer reasonable alternatives to the proposed revisions to help create a reasonable, workable process while ensuring that Scope 2 emissions inventories accurately reflect the emissions associated with a facility’s energy use.