Calculating Scope 2 Emissions

There are two main methodologies companies can use to quantify Scope 2:

1. Location-Based Method: Uses grid-average emission factor data based on the geographic locations where the electricity is consumed.

2. Market-Based Method: Uses emission factors from the specific electricity markets and suppliers from which the organization purchased its electricity.

The market-based method is considered more accurate, but requires more specific emissions data from utilities.

Strategies to Reduce Scope 2

Some key ways organizations can lower their Scope 2 emissions:

1. Improving energy efficiency to reduce electricity needs

2. On-site renewable energy installations (solar, wind, etc.)

3. Purchasing energy from renewable energy providers

4. Procurement of Renewable Energy Certificates (RECs)

5. Power Purchase Agreements (PPAs) for renewable energy

Importance of Scope 2 Reporting

Comprehensive emissions reporting requires Scope 1 (direct) and Scope 2 (indirect) disclosures. Robust Scope 2 accounting:

1. Identifies emissions hotspots to tackle

2. Demonstrates leadership in renewable procurement

3. Enables science-based target setting

4. Provides transparency to stakeholders

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