The global benchmark for emissions reporting, the Greenhouse Gas (GHG) Protocol, is set to introduce major updates to Scope 2 accounting, which covers emissions from purchased electricity. Although the final rules aren’t expected until at least 2027, early proposals point to a more rigorous, location-specific approach. These revisions could significantly influence energy procurement, data management systems, and the credibility of corporate climate claims. For businesses committed to corporate sustainability, understanding what’s ahead and how to prepare is essential to staying ahead of investor expectations, meeting regulatory demands, and strengthening competitive positioning.
Why Scope 2 accounting is changing
The current Scope 2 framework, developed in 2015, allows companies to offset electricity emissions using Renewable Energy Certificates (RECs), even when the source of that energy is geographically distant from the point of consumption.
While this model accelerated corporate investment in clean energy, contributing to over 100 GW of renewables in the US alone since 2014, it’s also been criticised for weak environmental integrity. With growing concerns over grid imbalances and the real impact of REC-based offsets, the GHG Protocol is seeking to tighten the rules to reflect actual emissions reductions more accurately.
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What the proposed Scope 2 accounting changes could mean for businesses
The upcoming Scope 2 accounting revisions aim to strengthen the integrity of emissions reporting with proposals that could reshape how companies purchase, track, and claim renewable energy use.
Hourly matching for energy use
One of the most debated proposals is a shift from annual matching of renewable energy purchases to hourly matching. This would require organisations, particularly large energy consumers, to align the timing of their renewable electricity procurement with their actual usage. While this approach could significantly improve emissions accuracy, it introduces major logistical challenges. Many companies currently lack the infrastructure to monitor and match energy usage on such a granular level, which could make compliance costly and technically demanding.
Narrower market boundaries
The draft revisions also suggest narrowing the geographic scope within which renewable energy purchases can be matched to consumption. Under current rules, companies can procure energy from broader markets across national grids. The updated guidance may require buyers to contract within the same regional grid where their operations are located. This could limit procurement flexibility, increase costs, and make it more difficult for companies in fossil fuel-heavy regions to access clean energy options, thus affecting both sustainability targets and investor perceptions.
Emphasising consequential impact
To strengthen the environmental integrity of renewable energy claims, the GHG Protocol is considering new guidance around consequentiality – the idea that only deals that lead to additional renewable generation should count toward emissions reductions. This could lead to greater scrutiny of energy contracts and require businesses to demonstrate that their actions are adding new capacity to the grid. For smaller companies or those without direct influence on generation projects, this may reduce the range of qualifying options and dampen participation in voluntary procurement programmes.
Preparing now: What businesses can do
While the final guidelines may still evolve, companies don’t need to wait to act. Here are three proactive steps to get ahead of the change:
- Audit your Scope 2 strategy: Evaluate current contracts and assess exposure to regional and temporal risks.
- Upgrade data infrastructure: Ensure energy use and procurement data can be tracked in real-time and aligned with potential hourly matching.
- Invest in internal capability: Teams need to understand the technical, legal, and strategic aspects of emissions reporting.
Conclusion: Don’t wait to build internal readiness
Although the Scope 2 accounting changes won’t take effect for several years, businesses that delay risk being unprepared, or worse, compromising the credibility of their emissions disclosures. With investor scrutiny and stakeholder expectations on the rise, traceable emissions reductions and reliable data are essential.
Now is the time to strengthen your internal capability. Our corporate sustainability training equips teams with the skills needed to confidently manage emissions reporting, optimise energy procurement, and integrate ESG across operations. Don’t wait for the rules to change – start building resilience and credibility today.
