Decision and assessment

The Scope 2 netting mistake

This company is fictional. The activity data are simulated. Do not cite them as a real inventory.

What location-based Scope 2 figure belongs in the working paper?9,369 tCO2 — 13,880 MWh × 0.6756,443.55 tCO2 — solar netted out of the location-based total13,880 tCO2 — report the megawatt-hours as tonnes0 tCO2 — the plant has a solar contract, so electricity is renewable

What market-based figure do you report beside it, assuming the retired instruments meet the quality criteria?6,443.55 tCO2 — uncovered 9,546 MWh × 0.675, named as a grid-average proxy9,369 tCO2 — ignore the retired certificates and apply the grid factor to all 13,880 MWh0 tCO2 — any renewable claim zeros the whole siteDo not report a market-based figure

The energy manager says subtracting solar 'avoids double counting'. What is the right response?There is no double count. Location-based describes the grid. Market-based describes the contract. Report both, with the method.Agree. A kilowatt-hour should only appear once, so location-based must be net of solar.Drop market-based entirely so there is only one number to defend.Add 8,100 and 5,400 and report 13,500 as total Scope 2.

The electricity bills for the year show 12,000 MWh purchased and generated under the PPA. The draft calculation uses 8,000 MWh. What do you record?The activity data does not reconcile. Location-based has to start from 12,000 MWh.Bills include solar, which is not real grid power, so 9,546 MWh is the location-based activity.Use 10,000 MWh, halfway between the two, and disclose a range.Ignore the bills and back-solve megawatt-hours from the intensity the CFO liked last year.

What do you put in the note to the CFO?Report 9,369 t location-based and 6,443.55 t market-based. Say the certificates do not reduce the location-based number, and that the market-based figure uses the grid average because no residual mix is in the file.Give the CFO 6,443.55 t as the only number so the renewable budget can be deferred.Provide a single figure and leave the method unnamed, to keep the BRSR draft short.Hold the disclosure until a consultant reprints the GHG Protocol tools inside the report.

Fictional companies. Reference factors keep their source and year. Illustrative factors are marked.

Privacy notice esgproinvest.com