How Could Changes to Corporate Greenhouse Gas Reporting Affect Emissions? – Resources Magazine

Report on Proposed Revisions to Greenhouse Gas Protocol Scope 2 Guidance and Alignment with Sustainable Development Goals

Introduction and Core Revisions

A review of proposed revisions to the Greenhouse Gas Protocol (GHGP) guidance for corporate Scope 2 emissions accounting has been initiated, with a 60-day public comment period underway. The proposed changes are designed to enhance the credibility and impact of corporate climate action, directly contributing to several Sustainable Development Goals (SDGs). The most significant revisions to the market-based accounting method include:

• Hourly Matching: A requirement for corporations to match their electricity consumption with clean energy generation on an hourly basis.
• Deliverability: A requirement ensuring that the clean energy procured is deliverable to the location of consumption.

These amendments aim to strengthen corporate contributions to SDG 13 (Climate Action) by ensuring that emissions accounting more accurately reflects real-world grid impacts.

Impact on Clean Energy Investment and Climate Mitigation (SDG 7 & SDG 13)

Analysis suggests the proposed requirements will drive significant progress towards SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action). The mechanism for achieving these goals is projected as follows:

1. The new criteria of hourly matching and deliverability will constrain the supply of qualifying Energy Attribute Certificates (EACs).
2. This supply constraint is expected to increase the market price of compliant EACs.
3. Higher EAC prices will translate into increased revenue for clean energy generators.
4. This enhanced revenue stream will incentivize new investment in renewable energy projects, expanding clean energy capacity and infrastructure.

By creating a more robust financial incentive for clean energy generation, the GHGP revisions directly support the transition to sustainable energy systems and contribute to a tangible reduction in global greenhouse gas emissions.

Implementation Challenges and Corporate Responsibility (SDG 12 & SDG 17)

The successful implementation of these revisions faces challenges related to the voluntary nature of the GHGP framework. These challenges could impact corporate progress towards SDG 12 (Responsible Consumption and Production), which encourages companies to adopt sustainable practices and reporting.

• Voluntary Adoption: As corporate participation is voluntary, a substantial increase in EAC prices may cause companies to curtail their clean energy purchases, thereby limiting the policy’s overall effectiveness in driving emissions reductions.
• Increased Complexity: The heightened complexity of the new accounting standards could potentially discourage some corporations from engaging in voluntary emissions reporting, reducing transparency and accountability.

Overcoming these obstacles will require strong multi-stakeholder collaboration, aligning with SDG 17 (Partnerships for the Goals), to ensure that the revised guidance is both effective in its climate objectives and practical for corporate adoption.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy

  The article focuses on revisions to the Greenhouse Gas Protocol (GHGP) that aim to increase revenues for “clean generators.” This directly supports the transition to and deployment of more clean and renewable energy sources, which is the central theme of SDG 7.

• SDG 13: Climate Action

  The entire purpose of the GHGP is to provide a framework for corporate greenhouse gas emissions accounting to mitigate climate change. The proposed changes are intended to lead to “lower emissions,” which is a primary goal of SDG 13.

• SDG 9: Industry, Innovation, and Infrastructure

  The mechanism described—increasing revenues for clean generators—is designed to spur investment and “clean energy deployment.” This involves building new, sustainable energy infrastructure and encouraging industries to adopt cleaner technologies, aligning with the goals of SDG 9.

• SDG 12: Responsible Consumption and Production

  The article discusses corporate accounting for electricity consumption (“Scope 2” emissions). The GHGP framework encourages companies to be more responsible in their energy consumption and to report on their environmental impact, which is a core component of SDG 12.

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix.

  The article explains that the proposed changes would lead to “more clean energy” by making clean generation more financially viable through higher prices for energy attribute certificates (EACs). This directly contributes to increasing the share of renewable energy.

• Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes.

  The incentive for “clean energy deployment” implies the construction of new, clean energy infrastructure and encourages corporations to source their electricity from these cleaner technologies.

• Target 12.6: Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle.

  The article is centered on the GHGP, a voluntary standard for “corporate greenhouse gas emissions accounting.” This is a direct mechanism for companies to adopt sustainable practices and report on them, as called for in this target.

• Target 13.2: Integrate climate change measures into national policies, strategies and planning.

  Although the GHGP is a corporate standard, the article explicitly links its proposed changes to governmental policy, noting they are “akin to requirements in the Biden administration’s guidance for the 45V hydrogen production tax credit.” This shows an alignment between corporate action and national climate strategies.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Reduction in Greenhouse Gas Emissions:

  The article explicitly states that the changes “would likely lead to lower emissions.” This is a direct quantitative indicator for measuring progress on climate action (SDG 13).

• Volume of Clean Energy Deployed:

  The text mentions that the policy mechanism leads to “more clean energy deployment.” The amount of new clean energy capacity (e.g., in megawatts) installed as a result of these incentives would be a clear indicator for SDG 7 and SDG 9.

• Price of Energy Attribute Certificates (EACs):

  The article identifies that the proposed changes would constrain the supply of EACs, “increasing the price of those certificates.” The market price of EACs can serve as an indicator of the financial incentive being provided to clean energy generators.

• Corporate Participation in Voluntary Accounting:

  The article notes a potential risk that complexity could “drive some companies away from voluntary emissions accounting entirely.” Therefore, the number of companies voluntarily complying with the GHGP guidance serves as an indicator of the successful adoption of sustainable corporate practices (SDG 12).

Summary of SDGs, Targets, and Indicators

Source: resources.org