Scope 2 Dual Reporting: The Requirement Most Inventories Get Wrong

Scope 2 is the smallest of the three scopes and the one most often reported wrongly. The error is not usually in the arithmetic. It is that companies report one figure where the GHG Protocol requires two, or report two where it requires one, and both mistakes come from the same paragraph.

The two methods

The GHG Protocol Scope 2 Guidance defines the location-based method as "a method to quantify scope 2 GHG emissions based on average energy generation emission factors for defined geographic locations, including local, subnational, or national boundaries". In plain terms: what the grid you plug into actually emits, on average.

It defines the market-based method as "a method to quantify the scope 2 GHG emissions of a reporter based on GHG emissions emitted by the generators from which the reporter contractually purchases electricity bundled with contractual instruments, or contractual instruments on their own". In plain terms: what you have contracted to buy, through supply agreements or energy attribute certificates.

They answer different questions and will usually give different answers. A company on a coal-heavy grid that buys renewable certificates has a high location-based figure and a low market-based one, and neither is the wrong number.

The dual reporting requirement, and both ways to get it wrong

The requirement sits in section 1.5.1: "Companies with any operations in markets providing product or supplier-specific data in the form of contractual instruments shall report scope 2 emissions in two ways and label each result according to the method: one based on the location-based method, and one based on the market-based method."

Read that conditional clause carefully, because two conditions follow from it that are commonly misunderstood in opposite directions.

Not having contractual data for every site does not put you in breach. The trigger is operations in any market where contractual instruments are available. A company with twelve sites and certificates covering three of them still reports both figures; it does not fail dual reporting because nine sites have no contractual data.

Equally, a company whose operations are all in markets without contractual instruments is required to report only a location-based result. Producing a market-based figure in that situation is not a sign of diligence. There is nothing to base it on, and the guidance does not ask for it.

The labelling obligation is also explicit and routinely skipped. Each result must be labelled according to its method. A single unlabelled scope 2 number in a sustainability report is non-compliant even when the figure itself is right, because the reader cannot tell which question it answers.

Why this matters more now than it did

Scope 2 has become the scope where the gap between the two methods carries reputational weight. A renewable-electricity claim normally rests on the market-based figure, and the location-based figure sitting beside it is the honest counterweight. Reporting only the market-based number removes the comparison the guidance exists to force.

For a finance team, the practical test is simple: can you produce both figures, labelled, for every reporting entity, and explain the difference between them? If only one number exists in your inventory, establish which method it uses before anything else.

What is coming, and what is not yet anything

The Scope 2 Guidance dates from 2015 and is under revision. A public consultation on scope 2 ran from 20 October 2025 to 31 January 2026 and has closed.

The proposals under consideration would tighten the market-based method considerably, requiring energy attribute certificates to be matched to hourly consumption and to be connected to deliverable grid regions — a substantial change from annual, loosely-bounded matching. There is also a transitional proposal that companies "may report using Method 2", the current market-based method, until a date still to be determined.

None of this is in force. The working group's proposals go to an independent standards board for approval before they even reach the next consultation, and the published timeline puts a consolidated draft standard out for public consultation in an estimated second quarter of 2027, with publication of the revised standard estimated for the fourth quarter of 2028. That revision will fold the Corporate Standard, the Scope 2 Guidance and the Scope 3 Standard into a single Corporate Standard version 3.0, in a joint process with ISO.

So the 2015 guidance is what an inventory for 2026 is prepared under, and anyone building hourly matching into a compliance plan today is planning against a draft. Worth knowing it is coming; wrong to report as though it had arrived.

Where this fits

Our breakdown of the fifteen Scope 3 categories covers the scope that usually dominates an inventory, and our guide to carbon accounting and Scope 3 for finance teams sets out the measurement approach. For a practical half-day treatment, see our carbon accounting CPD course covering the GHG Protocol, TCFD and TNFD.

The dual reporting requirement and both method definitions are in the Scope 2 Guidance published by the GHG Protocol. Check the revision's current status before relying on anything described above as a proposal, since the timeline has already moved once.