Corporate carbon reporting may face major overhaul

Anticipated to be published in 2027, the new guidance is currently under consideration by the GHG Protocol Scope 2 Technical Working Group (TWG), made up of senior scientists, policy makers, energy experts and industrialists. The TWG has published the findings of its most recent ‘public’ consultation which was designed to measure Scope 2 user satisfaction and gather feedback on proposed updates to carbon accounting methodology.

For large UK organisations, particularly those reporting under SECR, PPN 06/21, TCFD, or pursuing Net Zero commitments, these developments may require adjustments to current data systems, energy procurement strategies and emissions disclosures.

Hourly emissions factor matching for high-consumption business using market-based methodology 

One of the headline proposals is the introduction of hourly emissions factor matching for market-based electricity usage for organisations above a certain consumption threshold. 76% of the TWG voted in support of a mandatory requirement to match the most precise emissions factor with the most precise temporal interval of activity data available. Companies using over certain thresholds – which will vary depending on location – of electricity annually (per market i.e. UK or EU) will be required to match that consumption against hourly emission factors. Businesses below the threshold would still be permitted to use monthly or annual matching data. This change would mark a major step towards more granular and accurate market-based Scope 2 reporting, targeting high-impact emitters while maintaining flexibility for smaller energy users.

The proposed changes will introduce stricter criteria for market-based claims.

Key proposals include:

• Regional constraints: Renewable energy guarantees of origin (REGOs) or international equivalent would likely need to originate from the same geographical electricity grid where consumption occurs.
• Newness criteria: Emphasis may be placed on REGOs from newer renewable energy projects, encouraging investment in additional more efficient energy capacity.

“The proposed changes reflect a growing demand for transparency and granularity in carbon reporting,” advised Leanne Woolsey, McGrady Clarke Director.  “It’s a shift towards deeper data integration, greater accountability for large energy users and more strategic energy procurement.”

A unified approach that brings together energy efficiency and carbon accounting can help organisations meet the growing expectations for transparency and accuracy under the GHG Protocol’s proposed Scope 2 revisions. The updated standard is expected to be finalised by the end of 2027. Although implementation timelines are yet to be confirmed, a phased approach is likely. Conducting Scope 2 readiness assessments and taking early action will allow time to embed the necessary data, procurement and reporting systems.

Whether your organisation is just getting started or refining existing processes, McGrady Clarke can support your Scope 2 emissions reporting.