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TAC Public Meeting January 2026 Paper 3: GHGP Scope 2 Consultation Final Draft Response

AGENDA PAPER 3

Executive summary

Field	Value
Date	19 January 2026
Paper reference	2026-TAC-001
Project	GHG Protocol Revisions
Topic	Scope 2 guidance consultation – TAC's final draft response

Objective of the paper

This paper presents the TAC's final draft letter and survey responses to the GHG Protocol's proposed revisions to the Scope 2 guidance.

Decisions for the TAC

The TAC is asked to approve the letter and online survey responses to be sent to the GHG Protocol.

Appendices

• Appendix 1 - TAC's final draft letter to the GHG Protocol
• Appendix 2 – TAC's final draft responses to the GHG Protocol's online survey

This paper has been prepared by the Secretariat for the UK Sustainability Disclosure Technical Advisory Committee (TAC) to discuss in a public meeting. This paper does not represent the views of the TAC or any individual TAC member.

Context

1In the December 2025 meeting, the TAC discussed its letter and survey response to the Greenhouse Gas (GHG) Protocol's proposed revisions to the Scope 2 guidance (2015). The TAC agreed to amend the letter and survey response to include points raised in the meeting, including restructuring the letter so that the key messages were prominent.

2The TAC agreed that the letter and survey response would not be redeliberated and would be finalised by the TAC Secretariat and Chair unless the changes that were made were substantial. Given the extended deadline provided by the GHG Protocol (to 31 January 2026) and the significant editing of the letter, the TAC Secretariat have brought the letter and survey response back to the TAC for any final comments and approval.

3This paper presents the final draft response letter (Appendix 1) and answers to the online survey (Appendix 2).

Next steps

4Subject to any amendments discussed in this meeting, the Chair will approve the finalised letter and survey response which will be submitted to the GHG Protocol and published on the FRC website.

Questions for the TAC

• (i) Does the TAC approve the letter to the GHG Protocol and responses to the online survey as presented in Appendix 1 and 2?

Appendix 1: TAC's letter and survey response to the GHG Protocol

Prof. Alexander Bassen The Chair GHG Protocol Independent Standards Board

WRI 10 G Street NE, Suite 800 Washington D.C. 20002 U.S.A.

WBCSD Avenue Du Bouchet 2BIS 1209 Geneva Switzerland

xx January 2026

UK Sustainability Disclosure Technical Advisory Committee's response to the proposed revisions to the Scope 2 guidance

Dear Professor Bassan,

5The UK Sustainability Disclosure Technical Advisory Committee (TAC) welcomes the opportunity to provide comments on the GHG Protocol's proposed revisions to the Scope 2 guidance as set out in the consultation document published in October 2025. This letter sets out our key points for consideration and is accompanied by an appendix containing our responses to the specific questions posed by the GHG Protocol in the online survey.

6The TAC is an independent expert advisory body, established by the UK Government, whose purpose is to assess IFRS Sustainability Disclosure Standards on a technical basis and provide independent recommendations on endorsement to the Secretary of State for the Department for Business and Trade. The TAC also has responsibility to undertake outreach with, and provide a focal point for, UK stakeholders to influence the technical development of IFRS Sustainability Disclosure Standards. This includes the way the International Sustainability Standards Board (ISSB) develops its future standards and the ISSB's choices to amend or produce guidance on existing standards. Given the reference in IFRS S2 to the GHG Protocol's materials, the TAC has been commissioned by the UK Government to respond to the GHG Protocol's consultations.

7The TAC is formed of a Chair and members from a range of relevant professional backgrounds. The TAC's response to the GHG Protocol's consultation has been developed following the discussions of TAC members in public meetings. It considers the views of UK stakeholders whose views were collected by the TAC during its stakeholder outreach and research activities. Due to time constraints, the TAC engaged with limited UK stakeholders who had the opportunity to consider the specifics of the proposals.

8The TAC would like to highlight the following points for the GHG Protocol's consideration when finalising the Scope 2 guidance and for future consultations.

Due process and consultation period

9The TAC welcomes the extension of the consultation period from 60 days to 103 days as this may allow for more stakeholders to engage with the consultation and provide thoughtful and considered responses.

10The TAC believe that it is inappropriate for an international standard setter to have a public consultation period for only 60 days. While the GHG Protocol is currently used on a voluntary basis, its reference within regulations and other reporting standards (including ISSB and the European Sustainability Reporting Standards (ESRS)) increases the importance of robust due process which includes allowing sufficient time for stakeholders to engage with and respond to the consultation. The GHG Protocol should also take into consideration the volume and nature of the proposals when considering the length of the consultation period.

11We understand the GHG Protocol has set an ambitious timeline to complete the revisions to its suite of materials, but we very strongly recommend that future consultations are open for a period of 120 days, particularly the consultations on the GHG Protocol's Corporate and Value Chain Standards.

Moving in the right direction

12The TAC supports the ambition of the GHG Protocol to improve the accuracy of Scope 2 emissions calculations by requiring more granular data that temporally and spatially reflects a company's energy consumption.

13The proposed revisions are also aimed at improving comparability. The TAC notes that given the amount of feasibility measures, including the number of hierarchies, it is unclear whether comparability of data will be improved. There are many options available in the proposals, and comparability may not be improved if, for example, one company uses hourly data whereas another company uses annual data (assuming neither discloses the methodology). The TAC recognises that comparability will likely come from transparent disclosure of the approach taken, so that users of this information are able to interpret and compare data from different companies being cognisant of the different approaches used. We intend to engage with the ISSB on this matter.

Focusing on the most important changes

14Whilst we recognise the ambition of the proposals, the TAC believe that they are overly complex and therefore we suggest that the GHG Protocol simplify the proposals by focusing on the elements that are likely to lead to the greatest improvement. For example, the proposed changes to the market-based methodology are likely to provide greater improvement in the reliability of this data.

Being cognisant of the potential implications for capital allocation

15When finalising the proposals, the GHG Protocol should give due consideration to the impact of the proposals on the various frameworks that rely upon or are affected by the GHG Protocol's materials. In particular, the GHG Protocol should consider the inadvertent implications of the proposals on capital allocation decisions and whether the proposals are necessary or helpful for investors to understand transition plans.

Balancing the need for revision with cost and feasibility considerations

16The TAC recognises that the Scope 2 guidance was originally published in 2015 and therefore requires updating to reflect changes in the market, changes in energy generation and consumption, updated scientific knowledge, and improved technological capabilities.

17However, the GHG Protocol should ensure that any proposed revision takes into account the cost and feasibility of the proposed revisions. It is clear that cost and feasibility of the proposed revisions are a primary concern of UK stakeholders, especially as they are a significant step change from current practice.

18The TAC would also like to highlight the importance of phased implementation to provide companies with sufficient time to adapt internal systems and controls to deal with vastly expanded amounts of data collected from multiple sites, across multiple jurisdictions, and from multiple sources.

Importance of a legacy clause

19If the proposed revisions are taken forward, the TAC would like to emphasise the importance of the legacy clause protecting the duration of contracts that predate the application date of any revisions. We strongly believe that contracts entered in good faith that have significant financial costs and are long-term in nature should be protected. Without the legacy clause the proposed revisions are likely to have significant financial implications.

Assurability of the proposed revisions

20The GHG Protocol should also engage with assurance providers to ensure that the proposed revisions are capable of being assured and to understand the level of work that will need to be undertaken to assure this data. The proposed revisions are very technical and, depending on the finalised version, the GHG Protocol will need to support companies, data providers and assurances providers on how to apply the requirements.

Impacts on wider data systems

21The TAC is concerned that although the proposed revisions are targeted at preparers, it indirectly sets expectations on those that publish emission factors and other necessary data to change their approach and provide information that they are currently unable to provide. The GHG Protocol does not have direct authority over these data providers so would not be expected to place such expectations on them. Any consideration of cost and feasibility should be cognisant of the whole process, rather than focusing on the preparers who often rely on registries and data providers to provide them with the necessary data.

22Through engagement with the UK Government's Department for Energy Security and Net Zero (DESNZ), it is our understanding that the UK Conversion Factors that are published annually cannot currently provide emission factors at the higher levels of granularity suggested by the proposed revisions. It should be noted that the UK Conversion Factors are produced as part of the National Atmospheric Emissions Inventory (NAEI), which is produced to the United Nations Framework Convention on Climate Change (UNFCCC) Guidelines under statutory reporting requirements. The proposed revisions in the Scope 2 guidance that urge for more granular temporal and spatial emission factors is beyond the scope of the NAEI. More granular emission factors would require data out of scope of the NAEI which may not be feasibly obtained at sufficient quality or applicability. Any compromises on data quality or robustness risk the reputation of an internationally well-regarded tool, and potentially the NAEI. It is likely that other jurisdictions will have a similar issue and therefore the GHG Protocol should be cognisant of the consequences of its proposed revisions across the wider data systems.

Alignment with ISSB and IASB

23The TAC strongly recommends that the GHG Protocol engage with the ISSB and International Accounting Standards Board (IASB) to understand the impact of each other's work on their respective standards. For example, the GHG Protocol and ISSB should consider the difference between the proposed definition for 'accessible' in the proposed revisions and the requirement in IFRS S2 for companies to use 'reasonable and supportable information that is available to the entity at the reporting date without undue cost or effort'. These differences may create variations in how companies approach the calculation of their GHG emissions.

24Additionally, the TAC wishes to highlight possible issues arising from proposed revisions to Quality Criteria 4 and 5 on financial accounting including IFRS 9 Financial Instruments (IFRS 9) own-use eligibility, hedge accounting and IAS 37 Provisions, Contingent Liabilities, and Contingent Assets (IAS 37) onerous contracts. The TAC strongly recommends that the GHG Protocol technical team should contact the IASB to discuss its recent work on nature-dependent electricity contracts.

Conclusion

25Overall, the TAC welcomes the intention of the proposals to improve the quality of Scope 2 emissions data. However, there are significant concerns about the feasibility and cost of the proposals which might outweigh the benefits of the revisions, and therefore we recommend that the GHG Protocol reconsider whether all the proposed revisions are necessary to improve decision-making by investors, and to concentrate on the revisions that are likely to have the greatest impact on advancing the quality of disclosures.

26If you have any queries or would like to discuss our comments in more detail, please do not hesitate to contact me or the TAC Secretariat at [email protected].

Yours sincerely

[Insert signature]

Sally Duckworth Chair of the UK Sustainability Disclosure TAC Email: [email protected]

Appendix 2: TAC's draft responses to the GHG Protocol's online survey

All questions, including the ones that the TAC are not responding to, are presented in this Appendix. When finalised, these will be attached to the letter to the GHG Protocol (as presented in Appendix 1).

In principle, we have not responded to the multiple choice questions or scaling questions unless there are no other opportunities to present the TAC's views.

18. Please provide any feedback on the proposal to refine the definition of scope 2, to emphasize its role within an attributional value chain GHG inventory and clarify that scope 2 must only include emissions from electricity generation processes that are physically connected to the reporter's value chain, excluding any emissions from unrelated sources?

[No TAC response]

19. Please provide any feedback on the proposal to clarify the LBM definition to reflect scope 2 emissions from generation physically delivered at the times and locations of consumption, with imports included in LBM emission factor calculations where applicable?

[No TAC response]

20. Please provide any feedback on the proposal to clarify the MBM definition to retain its existing basis, quantifying scope 2 from contractually purchased electricity via contractual instruments, while specifying temporal correlation and deliverability when matching instruments to consumption?

[No TAC response]

21. Please provide any feedback on the proposed purposes of the location-based method.

[No TAC response]

22. Please provide any feedback on the proposed purposes of the market-based method.

[No TAC response]

Location-based method: Emission factor hierarchy

23. On a scale of 1-5, do you support the update to the location-based emission factor hierarchy to identify the most precise location-based emission factor accessible according to spatial boundaries, temporal granularity, and emission factor type (consumption or production)?

a. Scale of 1 (no support) – 5 (full support)

[No TAC response]

24. Please provide your reasons for support, if any (select all options that apply)

1. Agree that guidance on selecting location-based emission factors should be presented as a hierarchy
2. Enhances the accuracy and relevance of the location-based method
3. Enables use of emission factors that support abatement planning and target-setting
4. Improves use of location-based method to provide risk and opportunity assessment related to consumption of grid electricity
5. Aligns with emission factors used by your organization for location-based emissions reporting
6. Aligns with emission factors used for mandatory or voluntary reporting in your region
7. Prioritizes consumption-based factors that include imports/exports over production-based factors
8. Clarifies application of the EF hierarchy (spatial > temporal > consumption-based > production-based)
9. Agree with listing the most precise temporal granularity as “hourly”
10. Agree with listing the most precise spatial boundary as “local boundary”
11. Agree that the proposed spatial boundaries reflect electricity deliverability in your region
12. Other (please provide)

[The TAC has not selected an option but has provided some comments in the following question.]

25. Please provide comments regarding your reasons for support.

Requiring companies to use more precise data will likely result in disclosures that are more accurate and decision useful. By presenting this requirement as a hierarchy, companies will be able to select emission factors that are most appropriate whilst encouraging the use of more granular data where possible. However, as noted in our response to question 27, the use of hierarchies as proposed could compromise comparability.

IFRS S2 and draft UK Sustainability Reporting Standards (based on IFRS S1 and IFRS S2) include a Scope 3 measurement framework that requires companies to prioritise data inputs that have specific characteristics. For example, companies are required to prioritise direct measurement and timely data. Whilst it is not presented as a hierarchy and is specifically used for Scope 3 calculations, the Scope 3 measurement framework in IFRS S2 and draft UK SRS S2 is similar to the hierarchy proposed for the Scope 2 location-based method. The GHG Protocol should engage with the ISSB to ensure any similar or overlapping requirements are not overly complex and confusing for companies to apply.

26. Please provide your concerns or reasons for why you are not supporting, if any (select all options that apply)

1. Prefer guidance on selecting location-based emission factors to be identified as a single globally applicable option to increase comparability
2. Concern about increased administrative burden and complexity from identifying the most precise emission factors accessible
3. Concern that the most precise temporal granularity “hourly“ is too detailed
4. Concern that the most precise spatial boundary, “local boundary”, is too narrow
5. Concern that the proposed spatial boundaries do not reflect electricity deliverability in your region
6. Concern hierarchy does not align with emission factors used by your organization for location-based emissions reporting
7. Concern hierarchy does not align with emission factors used for mandatory or voluntary reporting in your region
8. Prefer a different order (e.g., consumption-based first, then spatial boundary, then temporal granularity)
9. Unclear how the changes will affect your GHG emissions reporting
10. Other (please provide)

[The TAC has not selected an option but has provided some comments in the following question.]

27. Please provide comments regarding your reasons for why you are not supporting (if any).

Some stakeholders have raised concerns that the increased flexibility offered by the hierarchies as proposed could compromise comparability, unless there is clear transparency as to which approaches companies take. Requiring companies to disclose their methodology is paramount, to ensure users can understand the approaches taken and to be able to compare different companies.

It is also noted that many companies in the UK use the UK Government's Conversion Factors that are published annually. These emission factors meet the criteria of 'accessible' as they are publicly available, free to use and from a credible source. However, currently this document would not be able to provide emission factors at the higher levels of granularity suggested by the proposal. As a jurisdiction that is more mature in its requirements and systems for disclosing GHG emissions, the proposed revisions may be too granular, and therefore we question whether companies in other jurisdictions will be able to implement the proposals. It should be noted that the UK Conversion Factors are produced as part of the National Atmospheric Emissions Inventory (NAEI), which is produced under statutory reporting requirements to UNFCCC guidelines. The proposed revisions in the Scope 2 guidance that urge for more granular temporal and spatial emission factors is beyond the scope of the NAEI. Producing more granular emission factors would require data out of scope of the NAEI which may not be feasibly obtained at sufficient quality or applicability. Any compromises on data quality or robustness risk the reputation of the UK Conversion Factors as an internationally well-regarded tool, and potentially the NAEI.

Additionally, the TAC is concerned that although the proposed revisions are targeted at preparers, it indirectly sets expectations on those that provide emission factors and other necessary data to change their approach and provide information that they are currently unable to provide. The GHG Protocol has no power over these data providers and therefore it is unreasonable to place such expectations on them.

28. For different views on the order the hierarchy should be applied (e.g. preference for consumption-based emission factors, then spatial boundary, then temporal granularity) please explain the preferred order.

[No TAC response]

29. Regarding regions that you operate in or have experience in, please provide comments on whether the LBM emission factor hierarchy allows you to identify an accessible emission factor that appropriately reflects how electricity is delivered in that region (please clearly identify the region you are referring to in your answer).

It is noted that the consultation document references the UK conversion factors and notes that 'in countries made up of multiple synchronous grids, national emission factors should not be used'. As a large portion of UK companies use the UK Government's conversion factors, requiring more granular data would have a cost and effort implication.

30. Regarding regions that you operate in or have experience in, please provide comments on whether the LBM emission factor hierarchy is likely to cause any region-specific challenges in its application (provide specific examples, and clearly identify the region you are referring to in your answer).

[No TAC response]

31. Do you agree that “local boundary” should be listed as the most precise spatial boundary for LBM emission factors? If not, select which should be listed as the most precise spatial boundary?

1. Yes, I support local boundary as the most precise spatial boundary
2. No, a more precise spatial boundary should be added
3. No, a less precise spatial boundary should be used. Use Operational grid boundary
4. No, a less precise spatial boundary should be used. Use Grid-wide or national boundary
5. Other (describe)

[No TAC response]

32. If you selected “Other” in question 31, please describe.

[No TAC response]

33. Should the LBM emission factor hierarchy be adjusted to include the deliverable market boundaries outlined in the proposed MBM Methodologies for demonstrating deliverability where they do not already overlap? If so, should they be included in addition to, or as a replacement for, the spatial boundaries currently proposed in the hierarchy?

1. No, different spatial boundaries are appropriate for the location-based and market-based methods
2. Yes, include the MBM deliverability market boundaries in addition to the proposed LBM hierarchy (explain why they should be added)
3. Yes, include the MBM deliverability market boundaries as a replacement for the proposed LBM hierarchy (explain why they should replace the current hierarchy)
4. Other (explain)
5. Do not support boundaries as proposed in either method (explain alternative boundaries for the location-based emission factor hierarchy and how they support integrity, impact, and feasibility for a value chain inventory

[No TAC response]

34. Please provide additional explanations or further details regarding your answer to question 33.

[No TAC response]

Addition of definition for 'accessible'

35. On a scale of 1-5 do you support the new definition of accessible: publicly available, free to use, and from a credible source?

a. Scale of 1 (no support) – 5 (full support)

[No TAC response]

36. Please provide your reasons for support, if any. Select all options that apply.

1. Definition supports feasibility and lower-cost reporting
2. Supports transparency and public verifiability of emission factors
3. Implements a common comparability baseline across reporters
4. Creates data equity for smaller reporters and underserved regions
5. Encourages open publication of emission factors
6. High quality accessible emission factors already exist for most markets globally today
7. Ensures reporters can immediately apply the updated LBM hierarchy
8. Clarifies reporting requirements
9. Other (please explain)

[The TAC has not selected an option but has provided some comments in the following question.]

37. Please provide comments regarding your reasons for support.

The TAC generally supports the proposal to require companies to use emission factors that are accessible as it attempts to limit the cost of implementation. Publicly available and free to use emission factor data is also helpful for assurance providers as they will need to obtain the underlying emission factors to verify how the methodology was applied.

38. Please provide your concerns or reasons for why you are not supporting (if any). Select all options that apply.

1. Definition needs further clarification about what is recognized as a credible source
2. Definition should not exclude emission factors that are publicly available and credible even if they have a reasonable associated cost (i.e. not free)
3. A list of suitable location-based emission factors should be published for each region, rather than requiring reporters to individually determine what is accessible in their region
4. Definition should also consider level of administrative effort in addition to external costs for emission factor data
5. Another criterion should be added to the definition
6. Other (please explain)

[The TAC has not selected an option but has provided some comments in the following question.]

39. Please provide comments regarding your reasons for concern (if any).

The concept of 'free to use' goes beyond the ISSB's requirement to use 'reasonable and supportable information available to the entity at the reporting date without undue cost or effort'. In particular, the concept of 'without undue cost' used by the ISSB recognises that there may be costs (not just financial but also time and resource costs) associated with the calculation of GHG emissions and requires a company to apply judgement as to whether the cost is appropriate. This is notably different to 'free to use', which is a binary choice and only considers the financial cost of data.

The TAC is concerned that the difference in terminology could lead to differences in how companies approach the calculation. The GHG Protocol may want to reconsider whether it is necessary to specify that companies use emission factors that are 'free to use' and should work with the ISSB to ensure any differences in terminology do not create differences in practice.

40. Which entities should qualify as credible sources? (Select all options that apply):

1. Government agency
2. System operator
3. Recognized registry
4. Accredited statistics body
5. Independent methodology meeting minimum criteria (outlined in question 42)
6. Other (please specify and explain)

[The TAC has not selected an option but has provided some comments in the following question.]

41. Please provide additional comments concerning your selected credible sources, including at least one example per region you operate in or have experience with, if possible.

It is the view of the TAC that the GHG Protocol should not attempt to list possible entities that qualify as 'credible sources'. Instead, a principles-based approach should be taken and any guidance on what is considered a 'credible source' should focus on the characteristics of credibility and disclosure by the preparer on their choice and rationale.

42. If you selected independent methodologies in question 40, please describe what documentation or assurance (if any) is needed for it to be recognised as a credible source? (select all that apply, then add brief detail):

1. Publicly documented methods and system boundaries
2. Update cadence (e.g., annual) and version control
3. QA/QC procedures and uncertainty disclosure
4. Governance/independence and conflict-of-interest safeguards
5. Geographic/system boundary and temporal coverage fit for use
6. Other (please explain)

[No TAC response]

43. Please provide any additional comments concerning your selected minimum criteria in question 42

[No TAC response]

Requirement to use the most precise location-based emission factor accessible

44. On a scale of 1-5 do you support the update to the requirement to use the most precise location-based emission factor accessible for which activity data is also available?

Scale of 1 (no support) – 5 (full support)

[No TAC response]

45. Please provide your reasons for support, if any (select all options that apply).

• a. Improves accuracy and scientific integrity of LBM results
• b. Strengthens transparency and public verifiability
• c. Enhances comparability across reporters and frameworks
• d. Better reflects grid operation in time and space, reduces misallocation
• e. Enables emission changes from storage and demand-flexibility to be reflected more accurately
• f. Prioritizes consumption-based factors that include imports/exports
• g. Aligns emission factor precision with available activity data
• h. Aligns positively with mandatory or voluntary reporting requirements in your region
• i. Enables use of load profiles when hourly activity data are unavailable
• j. Provides a common, accessible baseline for inventories
• k. Supports phased improvement as data availability expands
• l. Improves decision-usefulness for external disclosures
• m. Other (please provide)

[No TAC response]

46. Please provide any additional comments regarding your reasons for support.

[No TAC response]

47. Please provide your concerns or reasons for why you are not supporting (select all that apply). * a. Concern about negative impact on comparability, relevance and/or usefulness of LBM inventories * b. Concern that administrative, data management, and audit challenges posed by this approach would place an undue burden and costs on reporters * c. Concern that the most precise spatial boundary in the LBM emission factor hierarchy, "local boundary', is too narrow to require even when accessible * d. Accessible factors may be less accurate than non-accessible options and primary users of emission reporting data may expect the most representative factors * e. Material differences to inventory accuracy are too small to justify cost * f. Concern about the update cadence or representativeness of datasets (hourly/monthly) * g. Other (please provide)

[The TAC has not selected an option but has provided some comments in the following question.]

48. Please provide any additional comments regarding your concerns or reasons why you are not supporting (if any).

It is unclear from the consultation documents whether the proposed hierarchy for consumption data should be used in conjunction with the location-based emissions factor hierarchy. For example, is the hierarchy of consumption data specifically designed to be used when collecting activity data, or it is a hierarchy that sits within the emission factor hierarchy? The GHG Protocol should clearly explain how the consumption data hierarchy should be used with the LBM emission factor hierarchy.

Some stakeholders we spoke to during our stakeholder engagement highlighted concerns that current accessible emission factors (e.g. UK Conversion Factors published annually by the UK Government) might not be granular enough to allow companies to be able to hourly match the emissions. Many UK companies use the UK Conversion Factors, which meets the definition of accessible, but may not be able to use them going forward if they are required to obtain more granular temporal and spatial emission factors. We understand from conversations with the UK Department of Energy Security and Net Zero (DESNZ) that the UK Conversion Factors are predominantly derived from the National Atmospheric Emissions Inventory (NAEI). More granular emission factors would require data out of scope of the NAEI which may not be feasibly obtained at sufficient quality or applicability. Any compromises on data quality or robustness risk the reputation of an internationally well-regarded tool, and potentially the NAEI.

49. For concerns or support for alignment with mandatory or voluntary reporting requirements in your region, please provide an example of the programmatic requirements and the impacts of these changes on alignment.

[No TAC response]

50. For concerns that the most precise spatial boundary (local boundary) is too granular to be required even if emission factors are accessible, please outline why and identify whether reporting at this level of granularity should be a “may”, “should” or “shall not” requirement?

[No TAC response]

51. For concerns that choosing an accessible factor over a more accurate “non-accessible” one can reduce accuracy and decision-usefulness please describe the conditions when a non-accessible factor should be required to be used over an accessible one (e.g., material difference threshold, investor relevance), and what transparency/assurance is needed (public methods, QA/QC, independent assurance). Please note any cost/effort implications.

The Scope 2 guidance should not prescribe when ‘accessible' or 'non-accessible' emission factors are used. Companies should be able to decide whether they are able and willing to pay for emission factors, and whether these ‘non-accessible' emission factors are of higher quality and more representative of the actual GHG emissions and activities of the company. Generally, companies will not pay for resources unless they consider it necessary to improve the quality of the disclosure and to ensure it is decision useful for investors.

Feasibility measures for location-based method updates

52. Considering investor and assurance needs, how do the proposed location-based method revisions change the extent to which information is decision-useful to users relative to incremental cost and complexity for preparers? * a. No meaningful improvement (unlikely to change decisions/interpretations) * b. Minor improvement (noticeable but unlikely to change decisions) * c. Moderate improvement (could change some decisions/assessments) * d. Substantial improvement (likely to change decisions benchmarks) * e. Not sure / no basis to assess

[The TAC has not selected an option but has provided some comments in the following question.]

53. Please provide additional context for your answer to question 52.

The TAC is unable to comment on the specific cost/benefit of the proposed location-based method revisions.

However, some UK stakeholders that we have spoken to have challenged whether the improvements gained from the proposed revisions sufficiently outweigh the cost and effort required to implement the changes. Some stakeholders believe the incremental benefits from the proposed changes will not result in more decision-useful information for investors. These stakeholders especially noted that the additional feasibility measures and options provided by the hierarchies will limit comparability unless further transparency on the approach taken by a company is provided.

54. Considering investor and assurance needs, how do the proposed location-based revisions change the comparability of information relative to incremental cost and complexity for users? * a. No meaningful improvement (unlikely to change comparability/interpretations) * b. Minor improvement (noticeable but unlikely to change comparability) * c. Moderate improvement (could change some comparability/assessments) * d. Substantial improvement (likely to change comparability benchmarks) * e. Not sure / no basis to assess

[The TAC has not selected an option but has provided some comments in the following question.]

55. Please provide additional context for your answer to question 54.

As noted in our response to question 53, some UK stakeholders that we spoke to have indicated that the additional feasibility measures and options provided by the hierarchies will limit comparability unless further transparency on the approach taken by a company is provided. Without the disclosure of this methodology then the decision-usefulness of the information for investors would be limited.

The TAC recognises that comparability will likely come from transparent disclosure of the approach taken so that users of this information are able to interpret and compare data from different companies being cognisant of the different approaches used. Currently, the ISSB Standards require companies to disclose the methodology used to calculate GHG emissions, but in practice this disclosure can be limited and vary by entity. For example, some companies disclose their methodology by referencing the GHG Protocol with no further information about how they apply the methodologies. Given the proposed revisions in this consultation on how Scope 2 emissions are calculated, it could be helpful for users to have further, and standardised, information about how GHG emissions were calculated. In this regard, it is important that the GHG Protocol, alongside the ISSB, continue to improve the transparency of the methodology applied by companies.

56. For questions 52-55, please provide the basis for your assessment. * a. Direct empirical analysis (e.g., back-testing with hourly factors) * b. Operational experience (e.g. applying hourly LBM emission factors) * c. Professional judgment informed by literature/briefings * d. General awareness (no direct analysis) * e. Prefer not to say

57. At the Operational Grid Boundary level (of the proposed location-based emission factor hierarchy), what share of your load has hourly emission factors accessible: (select one) * a. 0% * b. 1–25% * c. 26–50% * d. 51–75% * e. 76–100% * f. Unsure * g. Not applicable

g. Not applicable

58. Please provide additional context for the data sources included in your answer to question 57.

[No TAC response]

59. Please indicate the share of your load with hourly activity data available: (select one) * a. 0% * b. 1–25% * c. 26–50% * d. 51–75% * e. 76–100% * f. Unsure * g. Not applicable

g. Not applicable

60. If your answer to questions 57 & 59 includes significant geographical differences (some regions with hourly emission factor and higher volumes of hourly activity data, other regions with minimal hourly activity data and/or no hourly emission factors), please include additional context.

[No TAC response]

61. When actual hourly activity data are unavailable, and solely to enable use of more precise LBM emission factors, the proposed revisions allow a reporter to use load profiles to approximate hourly data from monthly or annual load data. How would the use of load profiles affect the comparability, relevance, and usefulness of LBM inventories relative to your current practice? Please describe potential advantages, limitations, and any conditions under which impacts may differ.

A few stakeholders we engaged with suggested that the use of load profiles may add to the complexity of calculating location-based emissions, rather than being a helpful alternative. Several stakeholders acknowledged that load profiles could make the proposed revisions more feasible but questioned whether the load profiles needed to match hourly data would be available from the data providers, and whether trying to obtain these load profiles would have higher cost implications.

62. On a scale of 1-5, please indicate the incremental preparer cost/effort to implement the proposed revisions to the location-based method * a. Scale of 1 (minimal) – 5 (high) * b. Not applicable (not a preparer)

b. Not applicable

63. Please select the main drivers of cost/effort (select all that apply). * a. Data access/rights to granular emission factors * b. Hourly activity data availability/metering rollout * c. Tooling/IT integration or data pipelines * d. Assurance/internal controls readiness * e. Staffing/capacity/training * f. Contracting/procurement or budget cycle constraints * g. Third-party publication cadence (emission factors) * h. Multi-jurisdiction complexity (many grids/regions) * i. Policy/regulatory or commercial terms * j. Other (specify)

[The TAC has not selected an option but has provided some comments in the following question.]

64. Please provide additional context on the main drivers of cost/effort.

Whilst appreciating the need to update the requirements for the location-based method to reflect updated scientific understanding and technological capabilities, feasibility and cost-effectiveness are key factors for the GHG Protocol to consider when finalising the proposals.

UK stakeholders we spoke to were concerned that the benefits achieved from the proposed revisions to the location-based method would not justify the cost and effort required to implement these proposals. Stakeholders often commented on administrative challenges flowing from the volume and granularity of data proposed and the number of sources that would need to be used, particularly in the case of hourly matching.

They also commented on the lack of availability of data from suppliers to support these proposals. Many stakeholders believed that the wider system that supports the collection of data and calculation of emissions is not prepared to meet the demands of the proposals which make the proposals currently unfeasible.

65. Which two measures would most reduce burden in your context? (select up to 2) * a. Standardized publication of consumption-based emission factors by grid/system operators * b. Load profile hierarchy/templates to approximate hourly activity data when meters are unavailable * c. Phased implementation (staged effective dates) * d. API/automated access to emission factor datasets * e. Example calculations and disclosure templates * f. Assurance safe-harbors for estimates * g. Other (specify)

[No TAC response]

66. Please provide additional context on the measures that would most reduce burden in your context.

A UK stakeholder we spoke to suggested that the proposals would benefit from a central repository for emissions factors. It was noted that companies, especially multinational companies, are likely to use different emission factors for the location-based method to reflect the countries that they operate in. This stakeholder was concerned about the challenges when simple annual emission factors are replaced with potentially hundreds of factors via different suppliers that are published at different times. This stakeholder suggested that the burden would be reduced if there was a single provider of emission factors rather than “multiple sources of truth”.

67. For which reporting year would your organization be ready to apply the revised Scope 2 Standard based on these proposed changes in its GHG inventory? For example, if the Standard is published in 2027, the reporting year 2027 inventory is typically prepared and reported in 2028: * a. Earlier than reporting year 2027 (already aligned) * b. Reporting year 2027 (inventory prepared in 2028) * c. Reporting year 2028 (inventory prepared in 2029) * d. Reporting year 2029 (inventory prepared in 2030) * e. Reporting year 2030 (inventory prepared in 2031) or later * f. Later than Reporting year 2030 * g. Not applicable

g. Not applicable

68. Please provide additional context regarding how this timeline could be shortened and note any region or sector-specific context.

[No TAC response]

69. If you have operations or experience in the US, please select your preferred deliverable market boundary for the US. (Please see the table Proposed methodologies for demonstrating deliverability above for references to these options): * a. The US Environmental Protection Agency's Emissions & Generation Resource Integrated Database (eGRID) * b. DOE Needs Study Regions (45V) * c. Wholesale market/balancing authority * d. Don't have operations or experience in the US

[No TAC response]

70. All respondents, please select your preferred exemption threshold per deliverable market boundary. * a. 5 GWhs * b. 10 GWhs * c. 50 GWhs

[No TAC response]

Update to Scope 2 Quality Criteria 4 – Hourly matching

71. On a scale of 1-5 do you support an update to Quality Criteria 4 to require that all contractual instruments used in the market-based method be issued and redeemed for the same hour as the energy consumption to which the instrument is applied, except in certain cases of exemption. * a. Scale of 1 (no support) – 5 (fully support)

[No TAC response]

72. Please provide reasons for support, if any (select all that apply) * a. Improves accuracy and scientific integrity of MBM results * b. Strengthens transparency and supports public verification * c. Enhances comparability across reporters and frameworks using GHG Protocol data * d. Better reflects grid operation, reduces misallocation of generation (e.g., “solar at night") * e. Reduces risk of greenwashing/time-shifting claims by aligning claims to time of use * f. Improves decision-usefulness for external disclosures * g. Helps create price signals for times and places where renewables are not already abundant * h. Helps accelerate the development of technologies that will be needed at scale for fully decarbonized grids * i. Enables emission changes from storage and demand-flexibility to be reflected more accurately * j. Improves risk and opportunity assessment related to contractual relationships * k. Other (please explain)

[No TAC response]

73. Please provide comments regarding your reasons for support.

Ensuring that any contractual instruments used by companies to claim renewable energy usage are matched to actual energy consumption is an important update to the Scope 2 guidance. This will enable Scope 2 market-based disclosures to more faithfully represent actual energy usage. Whilst the TAC appreciates the intention, there are some concerns that are outlined in response to question 75.

74. Please provide concerns or reasons for why you are not supporting, if any (select all that apply) * a. More information is necessary to understand how investments not matched on an hourly basis will be accounted for and reported via the framework under development by the Actions & Market Instrument TWG * b. Hourly matching should follow an optional ‘may' rather than a required 'shall' approach * c. Hourly matching should follow a recommended ‘should' rather than a require 'shall' approach * d. Concern about negative impact on comparability, relevance and/or usefulness of MBM inventories * e. Concern that a phased implementation would be insufficient for development of the infrastructure necessary (e.g., registries, trading exchanges, etc.) to support hourly contractual instruments * f. Concern that administrative, data management, and audit challenges posed by this approach would place an undue burden and costs on reporters * g. Concern that requiring hourly matching does not create meaningful improvements to inventory accuracy * h. Concern that a requirement for hourly contractual instruments could discourage global participation in voluntary clean energy procurement markets * i. Other (please explain)

[The TAC has not selected an option but has provided some comments in the following question.]

75. Please provide comments regarding your concerns or reasons for why you are not supportive.

UK stakeholders we engaged with highlighted specific concerns about the proposal to hourly match contractual agreements. In particular, the challenges that were highlighted focus on the need for large volumes of data, the capability of the counterparty to provide the matched data and the cost to obtain the data.

76. Load profiles enable organizations without access to hourly activity data or hourly contractual instruments to approximate hourly data from monthly or annual data. How would the use of load profiles affect the comparability, relevance, and usefulness of MBM inventories relative to your current practice? Please describe potential advantages, limitations, and any conditions under which impacts may differ.

UK stakeholders we engaged with questioned whether load profiles are available, especially from the counterparty who will need to provide necessary information to be able to hourly match. One stakeholder questioned whether this requirement was designed to improve disclosures, or to reinvigorate and improve the contractual instruments themselves. It has been noted that the GHG Protocol has indirectly helped establish the market for contractual instruments, and it was suggested by this stakeholder that the proposals were more designed to improve the contractual instruments themselves, rather than improving the calculation and disclosure of Scope 2 emissions.

77. What is the approximate share of your organization's total load that would be subject to hourly matching, excluding any exemptions: * a. 0% * b. 1–25% * c. 26–50% * d. 51–75% * e. 76–100% * f. Unsure

[No TAC response]

78. Please indicate your best estimate of the internal administrative effort (people/process/controls) of the proposed hourly matching requirement relative to your current MBM process using annual matching. Assume 3 is your current level of effort. * a. Scale of 1 (much less) – 5 (much more)

[No TAC response]

79. Please indicate your best estimate of the external service cost (cash outlays to vendors, data, assurance) of the proposed hourly matching requirement relative to your current MBM process using annual matching. Assume 3 is your current external cost. * a. Scale of 1 (much less) – 5 (much more)

[No TAC response]

80. What are the feasibility measures you would anticipate relying on (select all that apply): * a. Load profiles for activity data (facility-specific) * b. Load profiles for activity data (utility/customer-class or regulator-approved) * c. Load profiles for activity data (time-of-use averages) * d. Load profiles for activity data (flat average across hours) * e. Load profiles for contractual instruments (same production asset) * f. Load profiles for contractual instruments (facility-specific) * g. Load profiles for contractual instruments (regional publicly available) * h. Phased implementation * i. Legacy clause

[No TAC response]

81. What are the assumed main drivers affecting internal workload and external service costs after applying feasibility measures (select all that apply): * a. Registry/market access for hourly EACs * b. Vendor/platform upgrades or new tools * c. Data integration (profiles, APIs), system configuration * d. Assurance/internal controls and evidence trails * e. Staff capacity/training * f. Contracting/sourcing changes for hourly instruments * g. Metering/interval data access arrangements * h. Other (specify)

[No TAC response]

82. Please provide any additional comments regarding your response to questions 77-81.

Although these questions are designed specifically for preparers, the TAC has engaged with UK stakeholders including UK preparer companies, a trade association and an asset manager/insurer, who have voiced significant concerns regarding hourly matching requirements for the market-based method.

Almost all of the stakeholders we spoke with highlighted that the hourly matching proposal would be the most burdensome. Although many of them agreed with the ambition of the proposal, they voiced concerns about the volume, granularity and availability of data needed to meet the proposed criteria.

Some stakeholders also noted that registries are not yet set up for this type of information, and the GHG Protocol has no control over if, or how fast, any necessary changes to registries can be made. These stakeholders insisted that any phased implementation should take into consideration the need for the supporting system, including registries, to be updated and ready to provide companies with the necessary information.

Update to Scope 2 Quality Criteria 5 – Deliverability

83. On a scale of 1-5 do you support an update to Scope 2 Quality Criteria 5, to require that all contractual instruments used in the market-based method be sourced from the same deliverable market boundary in which the reporting entity's electricity-consuming operations are located and to which the instrument is applied, or otherwise meet criteria deemed to demonstrate deliverability to the reporting entity's electricity-consuming operations? * a. Scale of 1 (no support) – 5 (fully support)

[No TAC response]

84. Please provide reasons of support, if any (select all that apply). * a. Improves accuracy and scientific integrity of MBM results * b. Strengthens transparency and public verifiability * c. Enhances comparability across reporters and frameworks using GHG Protocol data * d. Improves decision-usefulness for external disclosures * e. Better reflects grid operation, reduces misallocation * f. Provides sufficiently flexible options for organizations to demonstrate deliverability outside of the defined deliverable market boundaries * g. Defined market boundaries reflect a boundary your organization already uses for procuring contractual instruments * h. Agree that the proposed market boundary for my region(s) accurately reflects deliverability * i. Agree that the defined market boundaries align with mandatory or voluntary reporting requirements in your region * j. Improves risk and opportunity assessment related to contractual relationships * k. Helps create price signals for times and places where renewables are not already abundant * l. Other (please explain)

[The TAC has not selected an option but has provided some comments in the following question.]

85. Please provide comments regarding your selected reasons for support.

The TAC welcomes the proposed changes to Quality Criteria 5 to require all contractual instruments used in the market-based method be sourced from the same deliverable market boundary in which the reporting entity's electricity-consuming operations are located and to which the instrument is applied. This proposed change will improve the accuracy of market-based Scope 2 emissions and will better reflect the company's actual energy usage. This proposed change will also prevent companies from offsetting their Scope 2 emissions with contractual instruments in a different market boundary, which is not the intended purpose of the market-based method.

A few UK stakeholders we spoke to were also broadly supportive of the proposed revisions to the deliverability criteria as it would prevent companies from "gaming the system".

86. Please provide reasons of concern or why you are not supporting, if any (select all that apply) * a. Proposed deliverability requirements do not improve alignment with GHG Protocol Principles * b. Concern that narrower market boundaries restrict companies' abilities to invest in areas where renewable energy development could yield the greatest decarbonization impact * c. Concern that narrower market boundaries could prompt a shift away from long-term agreements (i.e., PPAs) to spot purchases (unbundled certificates) * d. Sourcing contractual instruments within deliverable market boundaries should follow an optional “may” rather than a required “shall” approach * e. Sourcing contractual instruments within deliverable market boundaries should follow a recommended “should” rather than a required “shall” approach * f. Concern that the defined market boundaries do not align with mandatory or voluntary reporting requirements in your region * g. Support deliverability in principle, but the proposed market boundary for my region does not reflect deliverability * h. Market boundaries should be defined as the geographic boundaries of electricity sectors, which align with national, and under certain circumstances, multinational boundaries * i. Exemptions to matching within deliverable market boundaries should be allowed for markets lacking sourcing options * j. Other (please explain)

[No TAC response]

87. Please provide comments regarding your selected reasons for why you are not supporting.

[No TAC response]

88. For the United States, which of the following market boundaries would best uphold the principle of deliverability and align with the decision-making criteria? (Please see the table Proposed methodologies for demonstrating deliverability above for references to these options): * a. The US Environmental Protection Agency's Emissions & Generation Resource Integrated Database (eGRID) * b. DOE Needs Study Regions (45V) * c. Wholesale Market/Balancing Authority * d. Unsure * e. Other

[No TAC response]

89. If you selected options (a), (b) or (c) for question 88 please explain why this option best upholds the principle of deliverability and balances integrity, impact, and feasibility of the MBM. Please also provide comments on the relative feasibility challenges of applying the other options.

[No TAC response]

90. For deliverable market boundaries (outside of the United States) identified in the table Proposed methodologies for demonstrating deliverability: Deliverable Market Boundaries, please provide comments on whether these market boundaries: * appropriately reflect the deliverability of electricity in that region * align with mandatory or voluntary reporting requirements in that region, please provide an example of the programmatic requirements and the impacts of these proposed changes on alignment * are likely to cause any region-specific feasibility challenges (provide specific examples) * If you prefer a different deliverable market boundary than identified in the table Proposed methodologies for demonstrating deliverability: Deliverable Market Boundaries, please describe this boundary. Please clearly identify the region you are referring to in your comments.

[No TAC response]

91. For regions not specified in the table Proposed methodologies for demonstrating deliverability: Deliverable Market Boundaries, please provide examples of market boundaries that uphold the principle of deliverability and balance integrity, impact, and feasibility of the MBM.

[No TAC response]

92. Please estimate the anticipated internal administrative effort (people/process/controls) of the proposed deliverability requirement relative to your current MBM process using broad market boundaries. Assume 3 is your current level of effort. * a. Scale of 1 (much less) – 5 (much more)

[No TAC response]

93. Please estimate the anticipated external service cost (cash outlays to vendors, data, assurance) of the proposed deliverability requirement relative to your current MBM process using broad market boundaries. Assume 3 is your current external cost. * a. Scale of 1 (much less) – 5 (much more)

[No TAC response]

94. What are the feasibility measures you would anticipate relying on to report using deliverable market boundaries (select all that apply): * a. Phased implementation * b. Legacy clause

[No TAC response]

95. What are the assumed main drivers affecting internal workload and external service costs after applying feasibility measures (select all that apply): * a. Data access/rights for EACs/registries aligned to deliverable market boundaries * b. Vendor/platform upgrades or new tools * c. Data integration (profiles, APIs), system configuration * d. Assurance/internal controls and evidence trails * e. Staff capacity/training * f. Contracting/sourcing changes for contractual instruments within deliverable market boundaries * g. Metering/activity data reporting configured to match deliverable market boundaries * h. Other (specify)

[No TAC response]

96. Please provide any additional comments regarding your response to questions 92-95.

A few UK stakeholders were generally supportive of the proposed revisions to Quality Criteria 5.

Almost all the stakeholders we engaged with highlighted that a phased implementation period (beyond 36 months) and the legacy clause would be necessary to support transition to the new requirements.

New guidance for Standard Supply Service (SSS)

97. On a scale of 1-5 do you support the new guidance for Standard Supply Service (SSS) and requirement that a reporting entity shall not claim more than its pro-rata share of SSS. * a. Scale of 1 (no support) – 5 (fully support)

[No TAC response]

98. Please provide reasons of support, if any (select all that apply). * a. Helps ensure that SSS resources are fairly allocated to all consumers and prevents procurement by specific organizations * b. Clarifies the order of operations so that organizations may claim SSS first and then make voluntary procurements * c. Supports consistent treatment of shared supply across different market structures * d. Protects the integrity of market-based accounting by avoiding double counting of attributes from SSS * e. Other (please explain)

[No TAC response]

99. Please provide comments regarding your selected reasons for support.

[No TAC response]

100. Please provide concerns or why you are not supporting, if any (select all that apply). * a. Markets should self-determine how resources that fall under SSS are allocated to customers * b. Concern of regionally applicable challenges to implementation * c. Unclear how partial subsidies affect SSS classification * d. Unclear rules/definition of SSS * e. All contractual instruments should be eligible for voluntary procurement. * f. Other (please explain)

[No TAC response]

101. Please provide comments regarding your selected reasons for why you are not supportive.

[No TAC response]

102. Are there resources in your region that do not fit clearly within the outlined examples of SSS but should be allocated to all customers under this framework? If so, please provide examples and explanations for each.

[No TAC response]

103. Are there resources in your region that fit within the outlined examples of SSS but should not be allocated to all customers under this framework? If so, please provide examples and explanations for each.

[No TAC response]

104. Proposed examples of SSS include ‘facilities and/or supply that are subject to regulated cost recovery from a monopoly supplier as part of default service in a particular service area and are not part of a resource-specific supplier product (e.g. a green tariff)’. In this context, should a monopoly supplier include: (select all that apply) * a. Vertically integrated investor-owned utility * b. Government entity operating in a service area without supplier choice * c. Distribution utility in a restructured market where certain electricity supply and/or contractual instrument purchases are subject to non-by passable, regulated cost recovery * d. Other (please explain) * e. Unsure

[No TAC response]

105. Please provide any additional comments regarding your response to question 104.

[No TAC response]

106. Allocation of SSS requires either suppliers allocating their SSS resources to customers or the development of a credible centralized registry or third-party registries that track SSS in order for organizations to claim their share. Is it acceptable that some reporters may be unable to claim SSS prior to a credible centralized registry or third-party registries being established? If not, how else might SSS be allocated in the absence of a registry?

[No TAC response]

107. Would you support a default option in cases where SSS data is not supplied by electricity providers, and no third-party registry is available, to designate certain resources as automatically qualifying as SSS? * a. Yes * b. No * c. Unsure

[No TAC response]

108. If you answered “No” to question 107, please provide any additional comments on why you would not support a default option.

[No TAC response]

109. If you answered “yes” to question 107, which of the following criteria, if any, would you support as a method of designating resources as SSS. (select all that apply) * a. Project age * b. Technology or fuel type * c. Project ownership (e.g. government owned projects) * d. Projects tracked in compliance registries * e. Combination of above criteria * f. Other (please specify)

[No TAC response]

110. If you answered ‘Other’ please provide additional feedback.

[No TAC response]

111. If SSS is not uniformly available across regions, how would this affect comparability of scope 2 MBM reporting? What interim solutions or disclosures would reduce inconsistency?

[No TAC response]

112. Please provide any additional feedback on SSS.

[No TAC response]

Updated definition of residual mix emission factors

113. On a scale of 1-5 do you support the updated definition of residual mix emission factors to reflect the GHG intensity of electricity, within the relevant market boundary and time interval, that is not claimed through contractual instruments, including voluntary purchases or Standard Supply Service allocations? * a. Scale of 1 (no support) – 5 (fully support)

[No TAC response]

114. Please provide reasons of support, if any (select all that apply). * a. Establishes clear definition for residual mix emission factors * b. Improves accuracy and relevance of market-based reporting * c. Protects the integrity of market-based accounting by avoiding double counting of attributes within the MBM * d. Clarifies the market boundary a residual mix emission factor should be calculated for * e. Improves comparability and transparency across organizations and regions * f. Helps incentivize voluntary sourcing of contractual instruments * g. Provides an option for reporters without access to an hourly residual mix emission factor * h. Other (please explain)

[No TAC response]

115. Please provide comments regarding your selected reasons for support.

[No TAC response]

116. Please provide reasons of concern or why you are not supporting, if any (select all that apply). * a. Requiring a residual mix emission factor to be calculated per market boundary will further reduce availability of residual mix emission factors * b. Allowing reporters to use different temporal precision of residual mix emission factors within a deliverable market boundary will negatively impact comparability * c. Market boundaries used for calculating a residual mix emission factor should be defined as the geographic boundaries of electricity sectors, which align with national, and under certain circumstances, multinational boundaries * d. Markets should self-determine if Standard Supply Service is included in a residual mix emission factor * e. Increases administrative complexity of calculating a residual mix emission factor * f. Other (please explain)

[No TAC response]

117. Please provide comments regarding your selected reasons for why you are not supporting.

[No TAC response]

118. In the regions/markets you follow, how close are certificate systems/registries/data providers to being able to publish residual mix emission factors within deliverable market boundaries? (For the US, please answer in regard to your preferred deliverable market boundary as outlined in Section 5.3.1 question 69.) * a. Scale of 1 (Far from ready) – 5 (largely ready) * b. Insufficient basis to assess

[No TAC response]

119. Short comment (optional, ≤100 words): Name regions where this already works vs. does not, in your view.

[No TAC response]

120. Please indicate your expected lead-time to reach “ready” (score 4–5), based on your current trajectory: * a. 36 months * e. Unknown

121. Please indicate your expected lead-time to reach “ready” (score 4-5), if investment/coordination accelerate: * a. 36 months * e. Unknown 122. Please describe the basis for your assessment: * a. Public roadmap/docs * b. Operator/vendor commitments * c. Pilot/production use * d. Professional judgment * e. Other (specify)

[No TAC response]

123. Please provide any additional feedback on residual mix emission factors.

[No TAC response]

Provide new requirement for use of fossil-based emission factors

124. On a scale of 1-5, do you support the requirement that for any portion of electricity consumption not covered by a valid contractual instrument and where no residual mix emission factor is available, a reporter shall apply a fossil-based emission factor? * a. Scale of 1 (no support) – 5 (fully support)

[No TAC response]

125. Please provide reasons for support, if any (select all that apply). * a. Helps improve accuracy and scientific integrity of MBM by reducing the risk of double counting of carbon free electricity * b. Provides an option for reporters without access to a residual mix emission factor * c. Incentivises development and publication of residual mix emission factors by requiring use of a more conservative emission factor as a fallback option * d. Other (please specify)

[No TAC response]

126. Please provide comments regarding your selected reasons for support.

[No TAC response]

127. Please provide reasons for concern or why you are not supporting, if any (select all that apply). * a. Defaulting to fossil-based emission factors is overly conservative and may overstate actual emissions * b. Organizations that lack access to residual mix data due to systemic or regional limitations may be disproportionately impacted * c. Undermines comparability between organizations that can access residual mix data and those that cannot * d. Misaligned with the definition and/or purpose of the MBM * e. Other (please specify)

[No TAC response]

128. Please provide comments regarding your selected reasons for why you are not supporting.

[No TAC response]

129. Please provide feedback regarding whether the requirement to apply a fossil-based emission factor, where no residual mix emission factor is available, should incorporate global equity considerations given the different levels of residual mix emission factor data available globally? And if so, how?

Combined questions on updates to the market-based method

130. Are the proposed feasibility measures (e.g., use of load profiles for matching, exemptions to hourly matching, legacy clause, and phased implementation) sufficient to support implementation of the proposed market-based revisions at scale? * a. Scale of 1 (insufficient) – 5 (highly sufficient) * b. No basis to assess

[No TAC response]

131. Please provide any additional comments regarding load profiles that need adjustment to support implementation of the proposed market-based revisions at scale. Explain how changes would make implementation feasible without undermining accuracy and integrity of the MBM.

Some UK stakeholders we spoke to agreed that the use of load profiles could make the proposals more achievable. However, many stakeholders questioned the availability of appropriate load profiles from suppliers and the additional cost of obtaining these load profiles. A few stakeholders also suggested that there is a potential that load profiles could create additional complexities rather than making the process easier.

132. Please provide any additional comments regarding phased implementation that need adjustment to support implementation of the proposed market-based revisions at scale. Explain how changes would make implementation feasible without undermining accuracy and integrity of the MBM.

The phased implementation should take into consideration the readiness of the market, including the systems that are necessary to support the calculation of GHG emissions data. For example, registries would need to be set up or updated to be able to provide the information needed to comply with the proposed revisions. When designing the implementation period, the GHG Protocol should be cognisant of the system as a whole, rather than focusing only on the reporting company who rely on registries and data providers to provide them with the necessary data.

133. Please provide any additional comments on other feasibility measures (not outlined in questions 131-132) that need adjustment to support implementation of the proposed market-based revisions at scale. Note, any comments on exemptions to hourly matching and the legacy clause should be provided in sections 6 and 7.

[No TAC response]

134. Considering investor and assurance needs, how do the proposed market-based method revisions change the extent to which information is decision-useful to users relative to incremental cost and complexity for preparers? * a. No meaningful improvement (unlikely to change decisions/interpretations) * b. Minor improvement (noticeable but unlikely to change decisions) * c. Moderate improvement (could change some decisions/assessments) * d. Substantial improvement (likely to change decisions benchmarks) * e. Not sure / no basis to assess

[No TAC response]

135. Please provide additional context for your answer to question 134.

The TAC is broadly supportive of intention behind the proposed revisions, notably to improve the reliability of the market-based Scope 2 data. However, the TAC has significant concerns that the cost to implement the proposed revisions to the market-based approach would outweigh the benefits. Some UK stakeholders we spoke to, including an asset manager/owner, questioned whether the proposed revisions would ultimately improve the decision-usefulness of the information.

Some UK stakeholders believe that the proposed revisions would not present a disproportionate cost for UK companies. However, many of the UK stakeholders we spoke to were concerned about the high-cost implementation due to the granularity of data required and the need to collect data from third parties. The TAC would like to emphasise that if the proposed revisions are finalised, then the GHG Protocol should consider an adequate transition period to allow companies to be able to change their systems accordingly.

136. Considering investor and assurance needs, how do the proposed market-based revisions change the comparability of information relative to incremental cost and complexity for users? * a. No meaningful improvement (unlikely to change comparability/interpretations) * b. Minor improvement (noticeable but unlikely to change comparability) * c. Moderate improvement (could change some comparability/assessments) * d. Substantial improvement (likely to change comparability benchmarks) * e. Not sure / no basis to assess

[No TAC response]

137. Please provide additional context for your answer to question 136.

UK stakeholders that we spoke to were concerned that the flexibility provided by the feasibility mechanisms could impact comparability.

The TAC recognises that comparability will likely come from transparent disclosure of the approach taken, so that users of this information are able to interpret and compare data from different companies being cognisant of the different approaches used. Currently, the ISSB Standards require companies to disclose the methodology used to calculate GHG emissions, but in practice this disclosure can be limited and vary by entity. For example, some companies disclose their methodology by referencing the GHG Protocol with no further information about how they apply the methodologies. Given the proposed revisions in this consultation on how Scope 2 emissions are calculated, it could be helpful for users to have further, and standardised, information about how GHG emissions were calculated. In this regard, it is important that the GHG Protocol, alongside the ISSB, continue to improve the transparency of the methodology applied by companies and provide suitable technical guidance on methodology disclosure.

138. For questions 134-137, please provide the basis for your assessment (select all that apply). * a. Direct empirical analysis (e.g., back-testing with hourly factors) * b. Operational experience applying hourly MBM * c. Professional judgment informed by literature/briefings * d. General awareness (no direct analysis) * e. Prefer not to say

c. Professional judgment informed by literature/briefings

139. Please estimate the anticipated change in procurement cost (i.e., price paid) for hourly-matched, deliverable EACs and/or PPAs relative to your current sourcing strategy. Assume 3 is your current external cost. * a. Scale of 1 (much less) – 5 (much more)

[No TAC response]

140. What are the assumed main drivers affecting procurement price differences for hourly/deliverable EACs/PPAs relative to your current sourcing strategy (select all that apply): * a. Hourly matching and deliverability requirements may change prices due to supply available at specific times and locations of demand * b. Shaping/firming or storage products required to align hourly supply with load * c. Contract tenor or credit/collateral requirements that increase all-in price * d. Need to structure multiple smaller PPAs instead of one large, aggregated contract, reducing economies of scale and increasing fixed transaction and development costs * e. If an entity elects to self-supply hourly matched, deliverable EACs exclusively via PPAs (and not use secondary/spot EAC markets), over-procurement may be needed to ensure full hourly coverage across deliverable sites and periods * f. Procurement costs to purchase EACs in secondary/spot markets to cover residual hours * g. Other (please explain) * h. None

[No TAC response]

141. Please provide any additional comments on the anticipated change in costs for hourly-matched, deliverable EACs, PPAs, etc. relative to current practices. If applicable, please include comments if and how this would impact your procurement strategy for carbon free electricity?

A few of the UK stakeholders we spoke to were generally supportive of the changes to the deliverability criteria but were concerned about the anticipated costs to implement the hourly matching criteria. In addition to the significant implementation costs, stakeholders were concerned about the ongoing cost of obtaining the necessary information from data suppliers and noted that these suppliers may not have this information readily available. The GHG Protocol should be cognisant of the impact of the proposed revisions on the wider system of data providers, energy companies and registries that will be required to provide certain information to the companies.

It would also be appropriate for the GHG Protocol to recognise that contractual agreements, like EACs and PPAs, have dual objectives for companies. Although some may enter into these agreements to minimise Scope 2 emissions, there are also financial benefits that influence the procurement strategy for these agreements. The GHG Protocol’s ambition should be cognisant of these financial objectives and the implications of the proposed revisions on financial reporting.

142. Beyond scope 2 reporting, do the proposed MBM criteria (hourly matching, deliverability, inclusive of feasibility & transition design) pose material IFRS/GAAP financial-reporting impacts for PPAs or similar instruments (e.g., IFRS 9 own-use/hedge accounting, IAS 37 onerous contracts)? * a. Scale of 1 (No impacts) – 5 (Significant impacts)

[The TAC has not selected an option but has provided some comments in the following question.]

143. Please briefly explain your rating: identify which accounting areas could be affected and why (for example, IFRS 9 own-use eligibility, hedge accounting, IAS 37 onerous-contract risk), and note the main factors driving the impact (for example, hourly matching, deliverability, contract terms such as tenor, penalties, or close-out provisions).

Although we have not provided a rating in the previous question, the TAC would like to highlight the possible impacts to financial accounting, including IFRS 9 Financial Instruments (IFRS 9) own-use eligibility, hedge accounting and IAS 37 Provisions, Contingent Liabilities, and Contingent Assets (IAS 37) onerous contracts.

Given the short timeline for this consultation, the TAC has been unable to obtain detailed stakeholder views on these questions but recognises that this is an important area for consideration in relation to connectivity between the sustainability disclosures and the financial statements.

The proposed revisions to Quality Criteria 4 and 5 might lead to unintended consequences for the selling of Renewable Energy Certificates (RECs) and therefore the ‘own use’ exemptions in IFRS 9. This could have the effect of causing the contracts to be classified as derivatives instead and then be required to be measured at fair value. This could lead to additional costs, and income statement volatility.

We also note that the proposed revisions could change the underlying economics of existing contractual agreements. The proposed revisions could lead to entities with long term commitments purchasing significant numbers of RECs which they may be unable to use, and which may have limited resale value. This could result in the unintended consequence of the recognition of onerous contract provisions under IAS 37.

These changes could also have an impact on the valuation of existing contracts. This unintended consequence could create additional complexity for those wishing to apply hedge accounting using Power Purchase Agreements (PPAs) as a hedging instrument.

Although an appropriate legacy clause may resolve some of these potential issues, the GHG Protocol should consider any long-term implications of these proposed revisions on financial accounting.

The TAC highly recommends that the GHG Protocol engage with both the ISSB and IASB technical staff to avoid any overlaps or conflicts. In particular, the GHG Protocol technical team should discuss the recent IASB work on nature-dependent electricity contracts to fully assess any potential consequences of the revisions in this consultation.

144. If mid-high impacts: select affected areas (select all that apply): * a. Own-use * b. Hedge accounting * c. IAS 37 * d. Other (please explain)

[No TAC response]

145. For each area selected in question 144, briefly note key drivers (e.g., main contract or accounting features driving the impact).

[No TAC response]

The following section of questions focuses on principle-based considerations for the reporting of emissions associated with electricity within and outside of the scope 2 inventory.

146. Considering the full set of proposed revisions to the market-based method as discussed previously in this consultation, would the existence of a separate metric outside of scope 2 to quantify the emissions impact of electricity-related actions change your perspective on the proposed revisions? * a. Yes * b. Somewhat * c. No * d. I do not support the development of impact metrics outside the scope 2 inventory

c. No

147. If you answer “yes” or “somewhat” to question 146, which of the following rationale captures your views (select all that apply). * a. Allows for continued investment in electricity projects outside of my deliverable market boundary * b. Provides a complementary metric to quantify actions such as energy storage or demand response * c. Causes less disruption of existing electricity procurement practices * d. Provides additional relevant information for users of GHG data * e. Provides additional approaches for target setting * f. Other (please specify)

[No TAC response]

148. Please provide comments regarding your selected choices in question 147.

[No TAC response]

149. If you answered “no” to question 146, please explain why a separate impact metric for electricity projects does not change your view of the proposed market-based inventory revisions.

While noting we responded ‘no’ to question 146, the TAC believes that changes to Quality Criteria 5 will likely improve the accuracy of market-based emissions and prevent companies from offsetting their Scope 2 emissions with contractual instruments in a different market boundary. The TAC recognises that a separate impact metric for electricity projects may therefore be helpful but does not have any specific comments on this approach.

150. If you answered “I do not support the development of impact metrics outside the scope 2 inventory” to question 146, which of the following rationale captures your views (select all that apply). * a. There is no agreed-on methodology for calculating these impact metrics * b. The existence of impact metrics would divert investment from time-matched and deliverable electricity procurement * c. These metrics are not currently required in mandatory disclosure frameworks * d. These metrics are not currently part of target setting programs * e. These metrics may not be appropriately auditable * f. These metrics could result in greenwashing * g. Other (please specify)

[No TAC response]

151. Please provide comments regarding your selected choices in question 150.

152. In your view, balancing scientific integrity, climate impact, and feasibility, what scope 2 revisions or combination of revisions are most appropriate? Please address each of the three core decision-making criteria: integrity, impact, and feasibility in your answer, and describe how the approach satisfies each criterion.

[No TAC response]

Exemptions – hourly matching exemption threshold

153. On a scale of 1-5 do you support allowing for exemptions to hourly matching using one of the options (1-4) described above? Scale of 1 (no support) – 5 (fully support)

[No TAC response]

154. Please provide your reasons for support, if any (select all that apply). * a. Reflects a reasonable balance of integrity, impact and feasibility as organizations under a threshold collectively contribute to fewer scope 2 emissions than the largest consumers * b. Encourages organizations under a threshold to continue to engage in voluntary procurement using an annual procurement approach * c. Provides a more equitable approach for reporting as hourly matching could be more challenging for organizations under a threshold * d. Reduces transition strain on the electricity market and hourly matching infrastructure. * e. Other (please provide)

151. Please provide comments regarding your selected choices in question 150.

[No TAC response]

152. In your view, balancing scientific integrity, climate impact, and feasibility, what scope 2 revisions or combination of revisions are most appropriate? Please address each of the three core decision-making criteria: integrity, impact, and feasibility in your answer, and describe how the approach satisfies each criterion.

[No TAC response]

Exemptions – hourly matching exemption threshold

153. On a scale of 1-5 do you support allowing for exemptions to hourly matching using one of the options (1-4) described above?

Scale of 1 (no support) – 5 (fully support)

[No TAC response]

154. Please provide your reasons for support, if any (select all that apply).

1. Reflects a reasonable balance of integrity, impact and feasibility as organizations under a threshold collectively contribute to fewer scope 2 emissions than the largest consumers
2. Encourages organizations under a threshold to continue to engage in voluntary procurement using an annual procurement approach
3. Provides a more equitable approach for reporting as hourly matching could be more challenging for organizations under a threshold
4. Reduces transition strain on the electricity market and hourly matching infrastructure.
5. Other (please provide)

[No TAC response]

155. Please provide any additional comments regarding your reasons for support.

[No TAC response]

156. Please provide your concerns or reasons for why you are not supporting, if any (select all that apply).

1. Reduces accuracy and relevance of MBM reporting
2. Introduces inconsistencies across companies, reducing transparency and comparability for users
3. Creates reputational risk and increases skepticism about MBM claims.
4. Fragments the voluntary market and may slow the transition to wider availability/use of hourly data
5. Feasibility is better addressed via temporary measures (e.g., phase-ins/legacy) rather than ongoing exemptions
6. Tools and infrastructure are improving rapidly, making broad exemptions increasingly unnecessary
7. Support an exemption, but a different criterion should be used for defining eligibility.
8. Other (please provide)

[The TAC has not selected an option but has provided some comments in the following question.]

157. Please provide any additional comments regarding your concerns or reasons for why you are not supporting.

It is not clear what the purpose of the proposed exemption thresholds is. For example, are the exemptions attempting to identify companies that might not be able to apply the proposed revisions, or are they attempting to scope out companies for whom these revisions are not relevant? The GHG Protocol should clearly identify why they think exemption thresholds are necessary.

Exemption thresholds can become complicated, especially if they interact with jurisdictional thresholds that do not match. It is usually the responsibility of the jurisdiction to set appropriate exemption thresholds.

The TAC also questions whether exemption thresholds are the most effective approach, or whether the GHG Protocol can achieve its objective by setting out options for when variations in the approach might be necessary. For example, some stakeholders noted that companies with large energy consumption (not necessarily large companies) may already have access to hourly data, whereas a variation in approach might be appropriate for companies with small consumption.

158. What evidence and/or reasoned rationale supports the need for exemptions (e.g., data access, costs, feasibility)?

[No TAC response]

159. Options 1, 3, and 4 introduce a GWh load threshold applied within a defined boundary. In section 5.3.1 question 70 you selected an exemption threshold of either of 5, 10, or 50 GWh per deliverable market boundary. If you prefer a GWh load threshold based on a different amount, propose a single threshold amount in GWh per boundary and explain why.

1. Threshold [enter number] GWh per [deliverable market boundary/site/other]
2. Preferred option selected in section 5.3.1, question 70

[No TAC response]

160. If you provided a different threshold amount in (a), how does your proposed threshold better fit the intent of the exemption (reducing reporting burden while maintaining MBM integrity and impact)? How would this exemption threshold impact the administrative and cost burden of the proposed MBM requirements compared to an exemption threshold of 5, 10, or 50 GWh per deliverable market boundary?

[No TAC response]

161. Exemption options 2, 3, and 4 introduce a criterion based on a reporter meeting the small and medium company categorization. This categorization framework is being developed by the Corporate Standard Technical Working Group. What specific criteria should be considered to define Small and Medium Companies? (select all that apply)

1. Number of employees
2. Net annual turnover
3. Balance sheet
4. Emissions (scope 1 + LBM scope 2)
5. Company location (high and upper-middle income countries and low- and lower-middle income countries)
6. Other (please explain)

[The TAC has not selected an option but has provided some comments in the following question.]

162. Please provide any additional comments regarding the criteria to define Small and Medium Companies.

The TAC does not think that the GHG Protocol should set a definition for Small and Medium Companies, especially if this definition is based on an existing definition used in a singular jurisdiction. Exemption thresholds, and the variety of approaches that can be taken to set definitions, can lead to unnecessary complexity and could clash with national requirements that already exist. It is also not appropriate for an international standard setter to set any definition based on a singular jurisdiction. The TAC believes that it is for a jurisdictional regulator to provide a definition for exemption thresholds so that they align with other jurisdictional approaches.

The TAC also believes that if the GHG Protocol wants to set exemption thresholds, these should be based on consumption rather than size of the company. We recognise that some large companies have limited consumption whereas some smaller companies have large consumption. It is our understanding that those with larger consumption are more likely to be able to access the temporal and spatial data, regardless of the size of the company. Information from companies with large consumption is also likely to be more material for investors.

163. Which of the four draft eligibility options for an exemption to hourly matching reflect the most reasonable balance of integrity, impact and feasibility of the MBM? Apply the exemption threshold selected in question 159.

1. Option 1
2. Option 2
3. Option 3
4. Option 4
5. None of the above (please explain)

[No TAC response]

164. If you selected “None of the above” in question 163, please describe your preferred eligibility conditions to apply an exemption to hourly matching and outline how this reflects a reasonable balance of integrity, impact and feasibility of the MBM.

Please see our response to question 162.

165. Please provide additional comments regarding your answer to question 164, including the main reasons why it is the most appropriate and any geographic or industry specific considerations that influenced your response. (≤300 words).

[No TAC response]

166. Should exemptions be time-limited (i.e. phased-out over time) or ongoing?

1. Time-limited (i.e. phased out over time)
2. Ongoing
3. Unsure
4. Do not support exemptions

[No TAC response]

167. If you selected that exemptions should be time-limited in question 166, please explain how this phaseout should be implemented and why this suggestion fits the intent of the exemption (i.e., reducing reporting burden while maintaining integrity and impact of the MBM).

[No TAC response]

168. Aside from any suggestions provided in question 167, please describe any safeguards needed to ensure exemptions are not misused and that comparability across reporting organisations is maintained?

[No TAC response]

169. In exercising the exemption, should the organization be considered in conformance with the Corporate Standard and Scope 2 Standard?

1. Yes, organizations using the hourly matching exemption should be considered in conformance
2. No, organizations using the hourly matching exemption should NOT be considered in conformance
3. A separate conformance level should be defined for companies exercising the exemption
4. Unsure
5. Other (please explain)

a. Yes, organizations using the hourly matching exemption should be considered in conformance

170. Please provide any additional comments regarding your response to question 169.

Exemptions are generally provided within a standard or in regulation to acknowledge that the cost and effort of providing certain information may outweigh the benefit to users. Additionally, exemptions might be used to scope out certain companies if it is determined that the requirement is not relevant to them. Given the general reason why exemptions might be offered, it would be unreasonable to provide an exemption which would prevent a company from stating compliance with the standards as a whole. The GHG Protocol could take the same approach as the ISSB and allow companies that use any exemption (or any other feasibility measure) to state compliance but also to disclose that they have used the exemption.

Legacy clause

171. On a scale of 1-5 do you support introduction of a Legacy Clause to exempt existing long-term contracts that comply with the current Scope 2 Quality Criteria from being required to meet updated Quality Criterion 4 (hourly matching) and Quality Criterion 5 (deliverability)?

Scale of 1 (no support) – 5 (fully support)

[No TAC response]

172. Please provide your reasons for support, if any (select all that apply).

1. Reflects a reasonable balance of integrity, impact and feasibility as existing long-term contracts reflect significant financial and operational commitments to energy resources
2. Encourages organizations with legacy contracts to continue to engage in voluntary procurement using an annual procurement approach
3. Provides a more equitable approach by ensuring that early adopters of Scope 2 guidance are not disadvantaged
4. Helps maintain trust and market confidence in long-term contracts
5. Provides a pragmatic pathway for organizations to transition to updated Quality Criteria
6. Other (please provide)

[The TAC has not selected an option but has provided some comments in the following question.]

173. Please provide any additional comments regarding your reasons for support.

The TAC supports the introduction of a legacy clause for existing long-term contracts. In many cases, these contracts were entered into in good faith, and it would be unreasonable to disadvantage companies who have existing long-term contracts. Not allowing companies to continue to use existing long-term contracts would have significant financial implications for companies, and therefore the legacy clause is crucial.

As noted in our response to question 180, the TAC believes that any use of a legacy clause should be disclosed as part of a company's methodology.

174. Please provide your concerns or reasons for why you are not supporting, if any (select all that apply).

1. Reduces overall accuracy and relevance of MBM reporting
2. Introduces inconsistencies across companies, reducing transparency and comparability for users
3. Not aligned with MBM's purpose, weakens credible market signals and abatement planning, and may conflict with regulatory expectations
4. Creates reputational risk and increases skepticism about MBM claims
5. Fragments the voluntary market and may slow the transition to wider availability/use of hourly data
6. Other (please provide)

[No TAC response]

175. Please provide any additional comments regarding your concerns or reasons for why you are not supporting.

[No TAC response]

176. Which date should determine a contract's eligibility under a Legacy Clause?

1. Contract signed prior to implementation date of the Scope 2 Standard (post phase-in period)
2. Contract signed prior to publication date of the Scope 2 Standard
3. Other (please explain)
4. Do not support Legacy Clause

[No TAC response]

177. Please provide any additional comments regarding your response to question 176.

[No TAC response]

178. If a Legacy Clause is included, please provide comments on the following design elements to balance integrity, impact, and feasibility of the MBM. Respond only to items relevant to your context.

1. Eligibility by instrument type and term: Define which instruments qualify (e.g., PPAs, utility green tariffs, supplier-specific contracts, unbundled certificates) and any minimum original term, including treatment or eligibility of perpetual or undefined-term contracts.
2. Duration of legacy treatment: Specify the time limit or maximum remaining term after which updated Scope 2 Quality Criteria apply to all contracts.
3. Allocation rules to prevent legacy contractual instruments being used to target the most challenging hours or locations.
4. Transfers and resale requirements when legacy instruments are sold or transferred to third parties.
5. Extensions and amendments: Define how contract extensions or material amendments after the cutoff affect eligibility (e.g., whether the extended or modified portion is treated as a new contract subject to updated Scope 2 Quality Criteria).
6. Disclosures: Scope and granularity of disclosures for any use of a Legacy Clause (for example separate presentation of MBM results with and without legacy-treated instruments, percentage of contracts covered, share of load covered, expected end date of legacy status).
7. Pre-effective-date guardrails: Approaches to discourage contracting intended solely to expand legacy eligibility before the cutoff (for example, disclosure of execution date and negotiation timeline).
8. Global equity: Approaches to address regional concentration of eligible contracts and related equity considerations.

[No TAC response]

179. Does a legacy clause pose material implications for users of climate-related financial risk disclosure programs?

Scale of 1 (No material implications) – 5 (Significant implications)

[The TAC has not selected an option but has provided some comments in the following question.]

180. Please briefly explain your rating: identify what the potential impacts could be and the main factors driving the impact (for example, comparability, transparency etc).

The use of a legacy clause will pose material implications for users of climate-related risk disclosure if there is not sufficient disclosure to describe the approach taken by the company. The TAC believes that the legacy clause is beneficial, but companies that use this clause should disclose that fact.

For example, long-term contracts offer some protection from market price risks. It would be useful for users to understand the nature of the contractual instruments being used, but also the length of the term of these instruments. The GHG Protocol and/or the ISSB could include a disclosure requirement that would provide users with sufficient information to understand the contractual instrument, but also if the legacy clause is being used by the company.

Some stakeholders have outlined a preference for transition tools other than a legacy clause as a way to balance continuity and comparability for the scope 2 MBM.

181. Which transition approach best balances continuity and comparability for the scope 2 MBM whilst maintaining integrity, impact, and feasibility?

1. Legacy clause: allow existing contracts that meet the current Scope 2 Quality Criteria to continue to be reported under the MBM as described in your response to Question 178.
2. Uniform effective date: rather than using a legacy clause, instead apply the updated quality criteria to all contractual instruments from a specific date following a defined lead time. The lead time would seek to facilitate companies having time to consider changes to existing contracts. Contracts executed before the effective date could continue to be used during the lead time, with separate, clearly labelled disclosure identifying results affected by those contracts.
3. Other (please specify)

a. Legacy clause: allow existing contracts that meet the current Scope 2 Quality Criteria to continue to be reported under the MBM as described in your response to Question 178.

182. If you selected “Other” in question 181 please provide details of an alternative transition approach that better balances continuity and comparability for the scope 2 MBM whilst maintaining integrity impact and feasibility.

In addition to the legacy clause, the GHG Protocol could also consider phased implementation together with guidance about how a company should disclose its approach (including whether it has used the legacy clause).

183. If a uniform effective date was applied rather than a legacy clause, what would be an appropriate date for organizations to be required to apply the updated quality criteria to all contractual instruments? (enter in 20XX).

The TAC does not agree with a uniform effective date.

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Name TAC Public Meeting January 2026 Paper 3: GHGP Scope 2 Consultation Final Draft Response

Publication date 09 January 2026

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