Investors push for stricter scope 2 emissions rules to better reflect renewable energy use

Thirteen investors representing roughly $1.2 trillion in assets have publicly pressed the Greenhouse Gas Protocol to tighten how companies account for Scope 2 emissions, arguing that current rules obscure corporate exposure to energy-transition risk and undermine investment decisions, according to edie and BusinessGreen.

The investors, convened by the NGO ShareAction, responded to the GHG Protocol’s public consultation on updating its 2015 Scope 2 Guidance, a 60-day review that the Protocol says seeks to improve the accuracy, transparency and comparability of corporate greenhouse gas inventories. According to the investors’ statement, the existing dual-method approach , allowing both location-based and market-based reporting , enables firms to claim zero market-based Scope 2 emissions even when their power comes predominantly from fossil-fuel-dependent grids, distorting assessment of real-world decarbonisation progress.

To address those shortcomings the investors propose two principal reforms. First, they call for hourly matching of clean energy consumption to generation so that reported market-based claims reflect the actual timing of renewable supply. Second, they urge the Protocol to adopt “deliverable market boundaries” that prioritise locally available clean generation capacity rather than distant contractual instruments. The group also asks that any new rules be introduced gradually and recognise legacy clean-energy contracts to avoid retroactively penalising existing investments, edie reports.

ShareAction’s interim head of corporate climate campaigns Jackie Garton urged swifter change, saying: “The standards that were originally designed to help foster an emerging voluntary renewable energy market are no longer fit for purpose. Renewable energy is now the fastest growing source of energy, making this a critical moment to ensure the rules fully reflect how power is generated, transmitted and consumed today. These standards are used by investors, companies and policymakers to make rules and decisions that will affect people and planet for years to come. This is a pivotal opportunity to accelerate the global shift to a renewable energy system.”

Policy and market context underlines why investors are pressing for reform. The GHG Protocol frames the consultation as part of a broader effort to align corporate accounting with evolving electricity markets and disclosure regimes. Carbon Direct notes the Protocol’s review and parallel updates at the Science Based Targets initiative as consequential for how firms set and demonstrate net-zero pathways, and indicates final standards are expected in 2027. At the same time, the U.S. Securities and Exchange Commission’s push for standardised climate-related disclosure has increased investor demand for consistent, decision-useful emissions data.

But the proposals are not without controversy. Consultancy analysis from KPMG warns the suggested shift toward more granular, time-resolved accounting could raise complexity and compliance costs, particularly for smaller companies and those operating across multiple jurisdictions, unless the Protocol designs pragmatic, scalable requirements. Industry stakeholders beyond investors are also seeking clarity: more than 140 companies in the renewable-gas value chain have separately urged the Protocol to set clear rules for accounting for renewable gas, highlighting ongoing debates over how different energy carriers should be treated within corporate inventories, according to S&P Global.

The GHG Protocol’s consultation invites input on whether to retain the current dual-method framework and how to strengthen market-based reporting through deliverability tests and hourly matching. If adopted, those changes would shift how companies justify renewable energy claims and could affect the valuation of instruments such as renewable energy certificates, power-purchase agreements and other contractual instruments that underpin corporate claims.

Investors backing the reforms argue that improved matching and geographically meaningful market definitions would bolster the quality of emissions data and redirect capital toward projects that expand local clean capacity, thereby accelerating the transition. Opponents caution that any new standard must balance rigour with practicality to avoid creating barriers to reporting or disadvantaging smaller market participants.

The outcome of the Protocol’s review will be watched closely by investors, corporates and policymakers because it will influence the integrity of corporate climate claims, the design of voluntary energy markets and the allocation of private finance for clean-energy projects. The consultation responses are being evaluated by the GHG Protocol as it considers revisions that proponents say are necessary to ensure accounting rules keep pace with changes in how electricity is generated, transmitted and consumed.