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Here’s a blog Lawrence shared last week for our PracticalESG.com subscribers:

After working through input beginning last year from over 1,000 stakeholders, the Greenhouse Gas Protocol has released a summary of feedback that will form the basis of a revision to its Scope 2 methodology. As a quick reminder Scope 2 applies to indirect emissions from purchased electricity, steam, heat, and cooling using two distinct methods: location-based and market-based reporting.

The major points of feedback from stakeholders – and that any revisions are intended to address include:

– Modifying the structure of and process to update GHG Protocol standards to consolidate scope 1, scope 2, and scope 3 into a single document to streamline accounting and reporting.
– Creating alignment with voluntary and regulatory climate disclosure programs such as SBTi, the EU CSRD, ISSB and the US SEC’s proposed rule on climate-related disclosures (once issued in final form).
– Reviewing the objectives of scope 2 reporting.
– Updating dual reporting requirements to reflect the usefulness, appropriateness, implementation, and overall results of the dual reporting requirement (location-based and market-based).
– Requiring granular time and location criteria to potentially correlate with actual atmospheric GHG emission reductions.
– Allowing flexibility in time and location criteria to reflect accounting standards and clean energy procurement opportunities that are feasible to implement for organizations of all sizes, sophistication levels, and global regions.
– Calling for new emission impact-based reporting approach for demonstrating emission reduction effects of buying clean energy.
– Requiring additionality criteria to more clearly align with atmospheric emission reductions.
– Adding clarifications and new guidance such as updated guidance for purchased steam, heat, and cooling; clarifying overlaps between accounting for emissions in scope 2 or scope 3 category 3; and creating guidance for specific use cases like electric vehicle charging, and leased assets, and other activities.

The organization invites all interested stakeholders to read the full draft Scope 2 Survey Summary Report. If you or your organization completed the survey and believe that the main feedback in your original response is not accurately reflected in the draft summary report, you are invited to provide feedback on this draft summary here by Friday, September 8th.

For those wondering, these changes don’t directly impact the SEC’s climate proposal. As a reminder, the SEC’s proposed rules were largely based on concepts from the GHG Protocol — including Scopes 1, 2 and 3.  Although the SEC stated that it expected most issuers would use GHG Protocol standards and guidance, the proposed rules didn’t mandate their use for calculating emissions, permitting some flexibility for registrants to adopt new approaches as they may emerge in the future. Also, in a departure from the GHG Protocol, the proposal contemplated different organizational boundaries for GHG emissions so that registrants would use the same scope of entities, operations, assets, and other holdings consistent with the accounting principles applicable to their financial statements.

– Meredith Ervine