According to the GHG Protocol, companies are required to report Scope 2 greenhouse gas (GHG) emissions. The GHG Protocol is the most widely recognized global standard to help public and private companies measure and manage their emissions as the world works collectively toward eliminating our dependency on fossil fuels. This article addresses Scope 2 emissions reporting and outlines all the details that companies and EHS professionals must consider regarding reporting responsibilities under the current framework.  

What Does Scope 2 Reporting Entail? 

Scope 2 GHG emissions refer to indirect emissions resulting from the consumption of purchased electricity, heat, or steam. Reporting on these emissions is mandatory and crucial in the effort to reduce an organization’s carbon footprint. Generally, Scope 2 reporting involves gathering data on acquired energy and energy consumption, largely referred to as indirect emissions. Scope 2 requires calculating associated emissions and reporting the results. For example, emissions from electricity generation used to power company facilities would fall under Scope 2, as would emissions from a plant that generates electricity used to power electric vehicles.  

Scope 2 and Scope 3 both cover indirect emissions, but Scope 2 can be more easily controlled in-house. For instance, to reduce emissions under Scope 2, a company could do something as simple as replacing their lighting systems with LEDs or installing smart building systems to make energy use more efficient, therefore relying less on purchased electricity. On a larger scale, the organization might switch to renewable energy sources to power their buildings.  

Scope 2 emissions are essential to track as they represent about one-third of global GHG emissions. Scope 2 reporting highlights potential mitigation strategies, such as opportunities to transition to renewable energy sources or improve energy efficiency. By providing a clear picture of an organization’s Scope 2 emissions, this essential reporting helps companies make informed decisions to combat global climate impact. Emissions data is collected, calculated, and compiled according to GHG Protocol standards. Reporting is conducted annually, and reports are due by the end of March for the previous year.  

Are Companies Required to Report Scope 2 Emissions? 

Scope 2 reporting is mandatory for most businesses. Scope 1 and 2 are the easiest to track as emissions come from company-owned or controlled sources. Examples include emissions resulting from the production of: 

• Purchased heat, electricity, or steam 

• Purchased natural gas  

• Company-owned boilers or furnaces 

Scope 2 emissions can be further broken down into two categories: 

1. Location-based 

Estimates emissions based on power generation at the location where it is used and calculated based on average emissions from the local grid. Emissions from on-site renewable energy generation projects are an example.  

2. Market-based 

When electricity is purchased from the grid, CO2 emissions are calculated based on usage and attributed to the company, and generally assumed they are based on choices made by the company itself. Some procurement choices may have more impact than others, such as would be the case if the company was purchasing energy from a coal-fired plant.  

Scope Two Reporting Tips for EHS Professionals 

Scope 2 emissions can be monitored and controlled best when tracked consistently.  Additionally, inventory boundaries must be established, that look at where the energy is coming from, how it’s being produced, and whether the company is delivering power back to the grid. Understanding these boundaries is critical to avoid double-counting between owned energy generation and grid-delivered energy.  

EHS professionals are responsible for ensuring organizations are compliant with organizational and environmental health and safety protocols. As these metrics often include data on emissions produced by office buildings, manufacturing plants, and other company-controlled locations powered by purchased fuel, they directly impact the people working there. With that in mind, it is becoming common practice for EHS teams to be tasked with overseeing the data reported under Scope 2, as such emissions may directly or indirectly affect workers.  

The GHG Protocol offers cross-sector tools applicable to most industries, providing spreadsheets, calculation tools, and contextual data to support the reporting process for:  

• Stationary Combustion 

• Refrigeration and Air Conditioning Equipment 

• Allocation of Emissions from Combined Heat and Power Plant 

There are worksheets with pre-input values for emission factors from various cross-sector tools, transport or mobile sources, global warming potential values, and measurement and estimation uncertainty worksheets. Software that can compile and store the information from these types of forms makes reporting much easier. The right tool can connect the data in the spreadsheets and integrate the information into a broader reporting scope, thereby eliminating several steps and breaking down informational silos between EHS and ESG.  

Accurate and consistent Scope 2 GHG emissions reporting is essential in the journey to a more sustainable future. Emissions data can be calculated with a fairly reliable degree of certainty when the correct method is used. As the urgency to manage, control, and improve GHG emissions increases, EHS professionals face an uphill battle to keep up with legislative changes and compliance standards. The right software is essential to managing the process, supporting EHS teams with the tools they need to simplify the task and ensure greater efficiency. Specialized software, such as the SafetyStratus ESG Module, helps companies automate the data collection and reporting process, supporting the effort to become more aware of their emissions on their journey to achieving their GHG reduction goals. 

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