The Greenhouse Gas (GHG) Protocol, the world’s most widely used framework for measuring and managing corporate emissions, has released draft consultations proposing significant updates to its Scope 2 Guidance and electricity-sector accounting methods. The revision marks the first major overhaul since 2015 and aims to modernize how organizations report emissions from purchased electricity, heat, steam, and cooling as the global energy system shifts toward renewables.

Modernizing Scope 2 for a Changing Energy Landscape

The proposed update revises the GHG Protocol’s Scope 2 Guidance, the foundational standard that defines how companies calculate emissions from electricity consumption. The framework underpins corporate greenhouse gas inventories globally and is referenced in leading disclosure systems, including the IFRS Foundation’s ISSB standards and the European Sustainability Reporting Standards (ESRS) under the EU’s Corporate Sustainability Reporting Directive (CSRD). According to the GHG Protocol, the revisions are intended to improve accuracy, comparability, and consistency in corporate GHG reporting as electricity grids become more dynamic and decentralized. Nearly 40% of global GHG emissions originate from energy generation, half of which is consumed by industrial and commercial entities making Scope 2 reporting a central pillar of corporate climate accountability.

“A decade after publishing the Scope 2 standard, an update is both timely and necessary,” said Alexander Bassen, Chair of the GHG Protocol’s Independent Standards Board. “This revision is an opportunity to make improvements based on how the standard has been applied in practice and how power systems have become cleaner, more complex, and more interconnected than ever before.”

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Key Changes in the Proposed Scope 2 Framework

The GHG Protocol’s draft consultation introduces several pivotal updates designed to reflect the realities of modern energy sourcing and procurement. Among the most notable are:

Hourly Matching Requirements: A new rule aligning emissions accounting with the time and place electricity is consumed. By shifting from annual to hourly matching, companies will be required to demonstrate that renewable energy purchases correspond to real-time grid generation, addressing issues of double counting and inflated clean energy claims.
Deliverability Criteria for Energy Contracts: All renewable energy credits (RECs) and similar instruments must now meet stricter “Scope 2 Quality Criteria” to qualify for market-based reporting. These criteria will ensure that contractual instruments represent verifiable and deliverable clean energy within the same grid system where electricity is consumed.
Enhanced Disclosure Requirements: The update introduces new recommendations for companies to transparently disclose their energy procurement methods, including contract structures, certificate origin, and verification mechanisms.

These proposed updates seek to align market-based accounting with the physical realities of electricity generation and delivery, reinforcing the credibility of corporate renewable energy claims.

Introducing Consequential Accounting for System-Wide Impacts

Alongside the Scope 2 revisions, the GHG Protocol has also launched a consultation on consequential accounting methods, a new approach to estimate the system-wide impacts of clean energy actions beyond a company’s operational boundary. This method would measure avoided emissions resulting from activities such as renewable energy procurement or grid decarbonization investments, complementing traditional inventory accounting that only reflects direct and purchased energy emissions. However, the organization emphasized that inventory emissions reporting and consequential accounting must remain separate to preserve consistency and comparability across corporate disclosures. This separation ensures that reported emissions are not distorted by external system-level assumptions.

A Decade of Progress and Complexity

The GHG Protocol was founded in 1997 by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) to establish standardized methods for calculating and reporting greenhouse gas emissions. Its frameworks now anchor global sustainability reporting and are referenced by regulators, investors, and standard-setters worldwide. Over the past decade, as the energy transition has accelerated, the relationship between electricity procurement and emissions reduction has become more nuanced. Corporate buyers increasingly rely on renewable power purchase agreements (PPAs), green tariffs, and energy certificates that vary by geography and grid carbon intensity. The proposed updates aim to bring corporate accounting in step with this complexity, ensuring that reported decarbonization outcomes match the true impact on the grid.

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Next Steps: Public Consultation Open Until December 19

The GHG Protocol’s consultations on both the Scope 2 Guidance update and consequential accounting methods are open to public comment until December 19, 2025. The organization has invited stakeholders including companies, auditors, NGOs, and policymakers to contribute feedback that will shape the final version of the updated framework. For global businesses, the forthcoming changes could redefine how electricity-related emissions are measured, verified, and communicated moving corporate climate reporting closer to real-world energy dynamics and strengthening the integrity of net-zero claims.

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