The Greenhouse Gas Protocol’s Proposed Scope 2 Guidance: Key Changes and Considerations for Stakeholders – insideenergyandenvironment.com

Report on Proposed Revisions to Greenhouse Gas Protocol Scope 2 Guidance and Implications for Sustainable Development Goals

Introduction: Aligning Corporate Climate Action with Global Goals

In late October, the Greenhouse Gas (GHG) Protocol initiated a review process by proposing updated Scope 2 guidance. This revision is critical for standardizing how corporations quantify and report indirect greenhouse gas emissions from purchased electricity, steam, heating, and cooling. The proposed changes directly impact corporate strategies for achieving climate targets and significantly advance several United Nations Sustainable Development Goals (SDGs), most notably SDG 13 (Climate Action), SDG 7 (Affordable and Clean Energy), and SDG 12 (Responsible Consumption and Production).

Key Proposed Changes and Their Contribution to SDGs

The anticipated updates aim to enhance the accuracy, transparency, and impact of corporate energy procurement, thereby strengthening the framework for global climate action. The key changes under consideration are pivotal for achieving specific SDG targets.

1. Enhanced Granularity and Data Quality: The new guidance is expected to introduce stricter criteria for matching renewable energy procurement with consumption, often referred to as “temporal and geographic correlation.” This ensures that claims of renewable energy use are credible and reflect a tangible impact on the grid. This directly supports SDG 7 by promoting genuine investment in and development of clean energy infrastructure.
2. Refinement of Market-Based Accounting: The proposal seeks to clarify the rules for using market-based instruments like Renewable Energy Certificates (RECs) and Power Purchase Agreements (PPAs). By ensuring these instruments represent real emissions reductions, the guidance reinforces SDG 12, pushing companies towards more responsible production patterns and transparent reporting.
3. Standardization for Global Comparability: A primary goal is to create a more consistent global standard, reducing ambiguity in Scope 2 reporting. This harmonization is essential for SDG 17 (Partnerships for the Goals), as it provides reliable and comparable data for investors, regulators, and other stakeholders to assess corporate climate performance and foster collaborative action.

Considerations for Stakeholders in the Context of Sustainable Development

The proposed revisions to the Scope 2 guidance present important considerations for various stakeholders, framing their roles and responsibilities in the broader pursuit of the SDGs.

• Corporate Reporters: Companies must prepare to adapt their data collection and reporting systems to meet more stringent requirements. This transition is an opportunity to align their energy strategies more closely with SDG 9 (Industry, Innovation, and Infrastructure) by investing in innovative clean energy solutions and building more resilient, sustainable infrastructure.
• Investors and Financial Institutions: For the financial community, the updated guidance will provide clearer, more reliable data for evaluating climate-related risks and opportunities. This supports the growth of sustainable finance and directs capital towards companies that are genuinely contributing to SDG 13 and the transition to a low-carbon economy.
• Policymakers and Regulators: The GHG Protocol’s guidance often serves as a foundation for national and regional climate disclosure regulations. These updates can help governments design more effective policies to accelerate the energy transition, contributing to national climate commitments and fostering the development of SDG 11 (Sustainable Cities and Communities) through cleaner urban energy systems.

Identified Sustainable Development Goals (SDGs)

• SDG 7: Affordable and Clean Energy

  The article discusses Scope 2 emissions, which are indirect greenhouse gas (GHG) emissions from purchased electricity, steam, heating, and cooling. The guidance for reporting these emissions is directly linked to how companies source and consume energy, encouraging a shift towards cleaner and more sustainable energy sources to reduce their reported emissions.

• SDG 12: Responsible Consumption and Production

  The focus on the “Greenhouse Gas Protocol” and its guidance for corporate reporting directly addresses sustainable business practices. By providing a standardized way for companies to quantify and report their environmental impact, the protocol encourages corporate accountability and the integration of sustainability information into business operations, which is a core principle of responsible production.

• SDG 13: Climate Action

  The entire purpose of quantifying and reporting greenhouse gas emissions, as discussed in the article, is to manage and ultimately reduce them. This is a fundamental component of global efforts to combat climate change. The GHG Protocol provides the tools for companies to take concrete climate action by understanding and managing their carbon footprint.

• SDG 17: Partnerships for the Goals

  The Greenhouse Gas Protocol itself is a multi-stakeholder partnership. The development and updating of its guidance, as mentioned in the article, involves collaboration between businesses, environmental organizations, and other stakeholders to create a globally accepted standard. This collaborative approach is essential for achieving broad and effective climate action.

Specific SDG Targets

SDG 7: Affordable and Clean Energy

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

  The article’s focus on Scope 2 guidance implies a push for companies to differentiate their energy sources. Accurate reporting allows companies to demonstrate their use of renewable energy, thereby creating a market incentive to increase its share in their energy consumption portfolio.

SDG 12: Responsible Consumption and Production

• 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 directly relates to this target by discussing the GHG Protocol’s guidance, which is a primary tool used by companies worldwide to report on their environmental performance and integrate sustainability metrics (specifically GHG emissions) into their corporate reporting.

SDG 13: Climate Action

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

  While the article focuses on corporate action, the standardization of GHG reporting through protocols provides the data and framework that underpins both corporate strategies and national policies aimed at reducing emissions. Corporate reporting standards are often aligned with or adopted into national climate strategies.

Implied Indicators for Measurement

Target 12.6

• Indicator 12.6.1: Number of companies publishing sustainability reports.

  The article discusses the guidance that companies use for reporting. The use and adoption of the GHG Protocol’s Scope 2 guidance is a direct measure of companies engaging in sustainability reporting, which is what this indicator tracks.

Target 13.2

• Indicator 13.2.2: Total greenhouse gas emissions per year.

  The article is centered on the “quantifying and reporting” of greenhouse gases. The data collected by companies using the GHG Protocol’s guidance directly contributes to the aggregation of total GHG emissions, providing the foundational data for this indicator at a corporate, sectoral, and eventually national level.

SDGs, Targets, and Indicators Analysis

Source: insideenergyandenvironment.com