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What the GHG Protocol’s Scope 2 consultation means

Photographic portrait of Roy Linthorst
Roy Linthorst

EY Global Greenhouse Gas Subject Matter Group Chair; Partner, Climate Change and Sustainability Services, EY Accountants B.V.

6 minute read 20 Jan 2026
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Sustainability

Proposed changes raise important questions about data availability, comparability and investment signals for market‑based instruments. 

In brief

  • Feasibility should be given equal importance to scientific integrity and impact when GHG Protocol considers amending its standards and guidance.
  • Workable approaches should be included in the updated guidance to address scenarios where data may be limited, unavailable or unreliable.
  • A cost-benefit analysis and materiality assessment of proposed revisions can clarify their necessity and impact on stakeholders in the GHG reporting value chain.

In October 2025, the GHG Protocol initiated a public consultation to revise its Scope 2 Guidance. Our1 responses draw on global client experience and focus on how feasibility — alongside scientific integrity and impact — may affect the accounting and reporting of Scope 2 GHG emissions. This article summarizes our views in the response submitted on 19 December 2025, highlighting the practical implications for organizations worldwide.

We support the GHG Protocol’s efforts to improve its standards, which have been the foundational framework for greenhouse gas (GHG) accounting and reporting for over two decades. The GHG Protocol’s influence extends to numerous reporting frameworks and regulatory bodies, making its role critical in shaping global climate reporting. We encourage users of the GHG Protocol standards and guidance to provide their feedback to the public consultation, which remains open until 31 January 2026.

1. Balancing integrity, impact and feasibility

When making decisions about changes to its standards and guidance, the GHG Protocol prioritizes a number of criteria: (1) Integrity - science and principles; (2) Impact - support ambitious global climate action and programs; and (3) Feasibility - to implement. We believe feasibility is equally important as scientific integrity and impact. While we support efforts to improve the accuracy and relevance of Scope 2 reporting, the objective to enhance scientific integrity and impact may not be achievable in practice if the data and infrastructure necessary to support the efforts are unavailable. We see the potential risk that the proposed changes would lead to increased administrative efforts and costs across the energy reporting value chain. Tracking, aggregating and verifying more granular data would require significant resources, especially for organizations operating in multiple locations across the globe.

While we support efforts to improve the accuracy and relevance of Scope 2 reporting, the objective to enhance scientific integrity and impact may not be achievable in practice if the data and infrastructure necessary to support the efforts are unavailable.

2. Scope 2 definition and data availability

The GHG Protocol proposes to refine the Scope 2 definition to better reflect actual electricity consumption within a reporting entity’s operations through spatial and temporal granularity. We support this, however, access to granular energy grid data and energy consumption data is limited on a global scale. The proposal to introduce mechanisms such as load profiles, which improve temporal granularity, adds complexity and the potential for calculation errors, especially where such data is unreliable or unavailable globally. We recommend that practical approaches be included in the updated guidance to address scenarios where data may be limited, unavailable or unreliable.

Scope 2 reporting includes all indirect energy emissions, including electricity, steam, heat and cooling. The Scope 2 Guidance today and the proposed revisions primarily focus on electricity consumption and do not specifically address other indirect energy sources. We recommend that the GHG Protocol explicitly addresses Scope 2 accounting for steam, heat and cooling.

Access to granular energy grid data and energy consumption data is limited on a global scale.

3. Location-based method: hierarchy and comparability

The proposals include a clear hierarchy for selecting location-based emission factors, which may enhance accuracy and support market development for more granular data. While we acknowledge the value of such a clear hierarchy, we highlight the potential increased effort combined with a lack of data to support spatial and temporal granular reporting. The hierarchy would likely result in a wide range of emission factor options, potentially undermining comparability between entities. We recommend that the GHG Protocol provides a list of approved databases or resources to ease implementation and improve comparability, reducing the possibility of entities diverging solely based on how extensively they search for the highest emission factor in the hierarchy.

The proposed definition of “accessible” emission factors that are publicly available, free to use, and from a credible source, could help refine the selection of emission factors. However, the proposed changes lack guidance for calculating emissions when accessible emission factors are not available. We recommend that, in addition to the emission factor hierarchy, the GHG Protocol provides guidance when accessible factors are not available. 

4. Market-based method: Hourly matching and deliverability

The proposals include requiring hourly matching of contractual instruments (e.g., a renewable energy certificate) to energy consumption. While this could improve the scientific integrity of market-based reporting, we believe there are significant feasibility challenges for hourly matching. Challenges include data availability at both the consumption and production levels, and inadequate infrastructure across utilities, reporting entities and contractual instrument registries.

We believe the administrative burden and complexity may increase, possibly without delivering materially improved reported values. We recommend that hourly matching be optional rather than mandatory until data and infrastructure are sufficiently robust to support granular reporting. The proposed updates also include redefining market boundaries for contractual instruments to those where the electricity is deemed to be deliverable to the consuming entity. 

We support defining clear market boundaries for contractual instruments, as this would provide explicit guidance in an area that has historically lacked consistency in reporting. It may also improve investments in renewable energy in the specific markets where the energy demand and load physically occur. However, we believe narrow boundaries could restrict wide-spread investment in renewable energy, which may result in unintended consequences.

We believe there are significant feasibility challenges for hourly matching of contractual instruments to energy consumption.

How EY can help

5. Exemptions, legacy clauses and equity considerations

To support a phased implementation, the GHG Protocol proposes to include exemptions for smaller entities and legacy clauses for existing long-term contracts. We generally support these exemptions, provided they balance integrity, impact and feasibility. Additionally, the GHG Protocol should assess how such implementation measures impact the comparability of data between reporting entities. Additional disclosures can help mitigate the impacts on comparability, though implementation measures will vary across entities and timeframes. We recommend that the GHG Protocol considers a time limit for using legacy contracts in GHG accounting and to require disclosure of the Scope 2 GHG emissions portion covered by legacy clauses.

The GHG Protocol’s proposed updates could result in further global inequity, as organizations in regions with limited data infrastructure may be disproportionately affected by requirements to use conservative fossil fuel emission factors when residual mix emission factors are not available. This may endanger the scientific integrity of GHG emissions accounting by relying on estimates rather than actual data reflective of regional operations.

Additional disclosures on exemptions and legacy clauses used can reduce the potential impacts on comparability.

6. Overall recommendations for the GHG Protocol

In our response to the Scope 2 consultation, we encouraged the GHG Protocol to:

  • Treat feasibility as equally important to scientific integrity and climate impact when making decisions about the future of the GHG Protocol
  • Provide clear, complete and practical guidance and resources to support implementation and reduce the administrative burden, which may include maintaining a global database of accessible emission factors and load profiles
  • Consider a cost-benefit analysis of the proposed revisions to clarify their impact on stakeholders such as reporting entities, utilities and contractual instrument registries. This would help to justify the additional effort required
  • Engage further with sustainability standard setters and regulators, recognizing the GHG Protocol’s central role in the sustainability reporting ecosystem
  • Consider phased implementation and targeted exemptions to support adoption across diverse markets, balancing the impact on comparability

Contributor: Kelly Albanir, Senior Manager, CCaSS, Ernst & Young LLP


Summary

This article outlines recommendations for the GHG Protocol’s Scope 2 consultation. It highlights the need for exemptions, clearer handling of legacy contract clauses, and better comparability in reporting. It also notes that some of the proposed updates may be difficult to implement in regions with limited data, which could affect the accuracy of results. The recommendations stress balancing feasibility with scientific integrity and impact, offering practical guidance, running cost‑benefit reviews, working closely with standard setters, and phasing in changes. 

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    About this article

    Photographic portrait of Roy Linthorst
    Roy Linthorst
    EY Global Greenhouse Gas Subject Matter Group Chair; Partner, Climate Change and Sustainability Services, EY Accountants B.V.
    Client-centric sustainability auditor and advisor. Passionate about addressing complex questions. Focused on people development. Energized by outdoor time with family. Sports fan.
    Related topics
    Sustainability

    EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.