What do proposed GHG Protocol Scope 2 revisions mean for companies?

The GHG Protocol is moving Scope 2 accounting toward real-time, grid-specific, and far more defensible reporting. Large energy users will shift to hourly and deliverable clean energy claims. Smaller companies will get exemptions and a long runway. If your decarbonization strategy relies on annual REC matching and broad regional boundaries, it is time to retool.

Public consultation runs from October 20 to December 19, 2025. Final publication is expected in 2027 with phased implementation. Innovo gives organizations structured data, granular tracking capabilities, and simplified compliance workflows, which together support a more resilient and future-proof Scope 2 strategy.

What is changing with Scope 2 right now?

The GHG Protocol opened a sixty day public consultation on major revisions to the Scope 2 Guidance beginning October 20, 2025. This consultation also runs alongside a draft for consequential accounting in the electricity sector. These documents are the first concrete step toward a modernized corporate standard that aligns with emerging disclosure rules and net zero frameworks.Reporting will move away from annual averages and toward methods that reflect the actual grids and hours where load occurs.

The location-based method will push companies to use the most precise emission factors they can reasonably access, prioritizing consumption-based and grid-specific data. The market-based method will tighten eligibility for clean energy claims through hourly matching, deliverability rules, and stricter treatment of residual mix.

What is changing in the location-based method?

The location-based method will require companies to use the most precise emission factor that is both accessible and aligned with their activity data. "Accessible" means publicly available, free to use, and from a credible source, not something you have to buy from a niche vendor.

The emission factor hierarchy is being updated to prioritize spatial precision first, then temporal precision. If you must choose between a national hourly factor and a regional annual factor, you pick the regional one, because it better reflects the actual grid serving your load.

The draft also distinguishes production-based and consumption-based factors and gives preference to consumption-based data that includes imports and exports. That improves alignment between what the grid actually delivers and what you report in your inventory.

What is changing in the market-based method?

Hourly matching means certificates used for market-based reporting must line up with your consumption hour by hour, except where small-company exemptions apply. Residual mix reporting can still be annual or monthly, but once you want to make certificate-backed claims, the clock starts ticking.

Deliverability means the generator behind your certificate must be able to plausibly serve your load on an electrically connected grid. National borders or broad "one market" zones will no longer automatically define your market boundary if they ignore how the grid actually operates.

SSS rules restrict how much publicly funded or regulated clean supply each customer can claim. You can only claim your pro-rata share of such resources, and certificates from unclaimed SSS power cannot be re-sold as private green attributes.

Finally, where residual mix data is missing, you will not be allowed to hide behind a grid-average factor that already counts those certificates once. You will need a residual mix that excludes all claimed certificates and SSS, or you default to fossil-only factors.

Why do hourly matching and deliverability matter?

Hourly matching closes the gap between nighttime consumption and daytime solar. Deliverability shuts down cross-country games where companies buy certificates from grids that can never serve their load. Together, these rules steer the system toward portfolios that provide clean power in the hours and regions where electricity is actually consumed, forcing certificates to cover the actual hours of consumption. Market boundaries will be defined around physical interconnections and coordinated operations, not just political borders or registry rules.

How will these changes affect “100 percent renewable” claims?

These changes will not ban "100 percent renewable" claims, but they will make them harder to substantiate and easier to audit. Annual, loosely deliverable RECs will not be enough to support statements that imply your operations run on clean power around the clock.

Claims will become more accurate and more constrained. Companies will need supply portfolios that cover evening and seasonal gaps. Storage, clean firm power, and demand flexibility will play larger roles in shaping emissions across all hours of the year.

How will responsibilities shift between small users and super-users?

The draft aims to put more of the integration burden on very large electricity consumers while easing requirements for smaller entities. Exemptions from hourly matching will be defined using thresholds based on electricity use and company size, so most CDP-reporting companies avoid full hourly matching, while most grid load still falls under the stricter rules.

In practice, that means super-users like hyperscalers, heavy industry, and large campuses will bear more of the cost of shaping clean portfolios. Smaller companies can still participate through simpler products or standard supply offerings, without needing to build in-house trading teams.

What feasibility measures will soften the transition?

The revisions build in several feasibility measures: load profiles, exemption thresholds, a legacy clause for existing contracts, and a phased implementation timeline. Together, they are designed to avoid breaking current disclosure regimes while upgrading integrity.

Load profiles allow companies without hourly metering or hourly certificate data to approximate hourly consumption and generation from annual or monthly values when they do not have metered data. A legacy clause will address long-term PPAs structured around annual matching. Implementation will phase in after final publication in 2027 with multiple years of lead time.

The legacy clause will recognize investments made under current Scope 2 rules, such as long-term PPAs structured around annual matching. Details on eligibility and duration are still being developed and will be tested through this consultation.

How does this connect to SBTi’s Corporate Net Zero Standard Version 2.0?

The Scope 2 revision and SBTi’s Corporate Net-Zero Standard Version 2.0 are separate processes, but they are clearly converging around the same direction of travel: more credible Scope 2 inventories, plus explicit responsibility for ongoing emissions during the transition. 

SBTi’s draft introduces responsibility for ongoing emissions through 2035 and beyond. Leadership companies will apply a carbon price to all remaining emissions. Recognition companies will address a smaller portion. All of this assumes a credible, defensible Scope 2 inventory grounded in accurate data.

SBTi also emphasizes that companies must be meaningfully on track to their science-based targets before claiming recognition for addressing ongoing emissions. That keeps internal decarbonization front and center and stops companies from leaning on credits as a substitute for Scope 1 and 2 cuts.

When you combine this with stricter Scope 2 rules, one clear message emerges. You will need a credible, granular Scope 2 inventory and a clear policy on how you handle ongoing emissions before 2035, not after.

What do these changes mean for corporate strategy over the next 3 to 5 years?

Over the next several years, you can treat Scope 2 and SBTi updates as advance notice, not a surprise exam. The companies that treat this as a design brief now will look credible when the final standards land. The ones that delay will be stuck trying to retrofit their narratives to a data model they never built.

Operationally, this means you should shift from "How do we hit 100 percent renewable on paper?" to "How do we shape our load and supply to reduce real emissions hour by hour on the grids we actually use?" That is a different question, and it drags procurement, finance, and operations into the conversation together.

You should also expect more pointed questions from boards and investors. They will ask whether your clean energy claims line up with your Scope 2 methodology, whether your PPAs and REC strategies remain aligned with the new rules, and how your approach will hold up when SBTi recognition and ongoing emissions criteria become standard parts of net zero validation.

What are the key Scope 2 questions companies are already asking?

Companies are already asking three simple but uncomfortable questions: 

"Will our current '100 percent renewable' claim survive under hourly matching and deliverability rules?" For many, the honest answer is no, at least not without reshaping contracts and adding storage or flexible demand.

"Do we have the data infrastructure to move from annual to more granular accounting?" Most organizations do not, but can get part of the way through interval metering, smarter data pipelines, and load-profile approaches that are already contemplated in the draft. GHG Protocol+1

"How do we pitch this change internally?" The practical framing is that this is not an additional burden; it is the inevitable direction of serious climate disclosure. Putting a real Scope 2 and ongoing emissions strategy in place now is cheaper than fixing it under a future enforcement deadline.

How does Innovo help?

Innovo provides structured REC data with consistent fields such as issuer, grid region, vintage, and timestamps. This level of standardization creates an audit-ready foundation for companies adopting more precise location-based and market-based reporting. Its real-time data model lets users segment certificates by region, period, and counterparty. That structure makes it easier to support hourly profiles, reconcile with load, and prepare for more granular Scope 2 requirements.

Innovo’s real-time portfolio views allow procurement and sustainability teams to identify gaps, model coverage scenarios, and organize certificates into purpose-built folders for specific claims or reporting periods. It's easy to categorize certificates by project, region, or reporting year. Smaller companies get a clear, organized view without needing large internal systems. Larger companies gain the structure needed for advanced matching and assurance.