Understanding your carbon footprint is no longer just a corporate social responsibility it’s a regulatory and financial necessity.
While Scope 1 covers your direct emissions.
Scope 2 represents the indirect impact of the energy you purchase. This guide breaks down the jargon of market-based versus location-based reporting. Plus, the highlighting the ongoing and future changes to the GHG Protocol and SECR reporting and some of the pitfalls to look out for.
At Emission Intelligence we help clients optimise and improve their scope 2 reporting.
The Dual Reporting Requirement
Location Based
Location-based reporting calculates emissions by using the emission intensity of the power grid your company is connected to.
Market Based
The market-based method calculates emissions is based on the electricity, organization’s have opted to purchase, typically outlined in contracts or instruments such as Renewable Energy Certificates (RECs).
New Reporting Requirement
The level of detail and requirements for companies to report their emissions has over the past couple of years been increasing year on year. In Scope 2 terms there are now 2 Matrix of which companies need to report, Location Based and Market Based reporting mechanisms.
The granularity of the reporting is also expected to increase, with a public consultation on scope 2 that finished in Jan 2026. The full results are still being compiled.
But the latest changes likely being:
- Hourly matching – Link to GHG blog
- A focus to have more local emission factors over national.