Why this matters
The Greenhouse Gas (GHG) Protocol is the global framework that underpins how organisations measure and report their greenhouse gas emissions. It forms the basis of disclosures for CDP, ISSB, and CSRD, and feeds directly into voluntary initiatives such as SBTi and RE100.
After a decade without major updates, the GHG Protocol is now revising its Scope 2 Guidance (originally published in 2015), with new standards due to come into effect in 2027. Public consultation opened in October 2025, but the direction of travel is already clear. Companies should be preparing now.
What the draft changes include
1. Dual reporting stays, but accuracy increases
- Businesses will still need to report both location-based and market-based emissions.
- Updates to the emission factor hierarchy mean organisations must use the most precise and granular data available, that is, data which captures both time (hourly or monthly) and location in greater detail, wherever accessible.
2. Market-based claims face stricter rules
- Hourly matching will be required for renewable energy certificates and other contractual instruments, replacing the flexibility of annual averages.
- Deliverability rules will ensure electricity claims are tied to grids that can realistically serve the consuming load.
- Residual mix factors must be used to avoid double counting. Where no residual mix data exists, the draft proposes a fallback option to use fossil-only emission factors. This is designed as a contingency measure to avoid double counting, rather than a new standard approach.
- Standard Supply Service allocations will be capped at a fair, pro-rata share, preventing over-claiming of government-mandated or default clean energy.
3. Measures to make transition practical
- Use of load profiles to approximate hourly data where granular data isn’t available.
- Exemption thresholds for smaller organisations.
- A legacy clause protecting existing contracts signed under previous rules.
- A phased implementation period, giving businesses multiple years to adapt before the 2027 effective date.
What does this mean for businesses?
For many organisations, these changes will represent a step change in emissions reporting. The ability to rely on broad annual averages or market-wide renewable claims will narrow significantly.
Businesses will need to:
- Upgrade data systems to capture more granular, region-specific electricity data.
- Engage suppliers early, especially in high-impact categories, to shift from spend-based estimates toward activity-based and supplier-specific data.
- Review renewable procurement strategies, including how existing PPAs, RECs, or GoOs will perform under hourly and deliverability rules.
- Revisit targets to check if they remain credible once stricter Scope 2 and Scope 3 criteria apply.
Why early action matters
These changes are not only about compliance from 2027 onwards. Investors, regulators, and voluntary initiatives are already signalling expectations for more robust data and transparent claims. Early movers will be better placed to:
- Demonstrate credibility with investors and tenants.
- Avoid exposure to greenwashing claims.
- Build internal confidence in sustainability data.
- Position themselves ahead of mandatory disclosure requirements such as CSRD and IFRS.
Timeline at a glance
- 2025: Public consultation and pilot testing.
- 2026: Final guidance expected.
- 2027: New standards become mandatory.