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The climate crisis has brought carbon reporting and accounting to the forefront of many businesses’ sustainability plans. As companies strive to minimize their environmental impact, understanding and accurately measuring carbon emissions is essential. Specifically, Scope 2 emissions play a pivotal role in realizing sustainability goals.  

Carbon reporting refers to the process of measuring and disclosing the carbon emissions associated with a company’s operations. This can be a complex and time-consuming task, but it is crucial for tracking and reducing the carbon footprint of a business. There are three scopes of carbon reporting, which are defined by the Greenhouse Gas (GHG) Protocol: Scope 1, Scope 2, and Scope 3.

Why is Scope 2 Emissions Reporting Important? 

Measuring Scope 2 emissions enables businesses to identify strategies to reduce energy consumption, minimize carbon emissions, and contribute to global climate goals. Accurate reporting offers a competitive advantage, as companies demonstrate commitment to sustainability and transparency alongside regulatory compliance. 

Figuring out where to get started can be confusing but we have six easy steps to get started with Scope 2 carbon reporting and accounting. 

Step 1: Calculating Scope 2 Emissions for Carbon Reporting

The United States Environmental Protection Agency (EPA) defines Scope 2 emissions as: “indirect GHG emissions associated with the purchase of electricity, steam, heat, cooling.” So, in essence, they are a result of a building’s energy usage.   

Now that we know what causes scope 2 emissions, let’s unpack how they are calculated. 

Scope 2 emissions are reported in metric tons of carbon dioxide equivalent (CO2e) and can be calculated using a variety of methods, including market-based and location-based approaches. 

Market-based accounting captures the emissions stemming from deliberate contractual energy purchases made by companies. This encompasses various instances such as participation in green power purchase programs, utilization of supplier-specific labeling or delivery metrics, and engagement in fossil fuel contracts. Location-based reporting is based on the actual emissions of the grid where the company is located. Understanding the diverse approaches and their impact on your company’s carbon footprint is critical for accurate carbon accounting. 

Step 2: Establish a Scope 2 Inventory

The next step in carbon reporting scope 2 is to determine the reporting requirements for your company. Depending on the size and type of your building, there may be different reporting frameworks or regulations that apply. For example, the Global Reporting Initiative (GRI) provides a widely recognized framework for sustainability reporting that includes requirements for carbon reporting. 

Using the reporting framework gives companies a way to understand the extent of their emissions problems before taking costly steps towards mitigating them. For example, companies that have access to accurate and real-time insights into their energy usage often find that they are wasting a significant amount of energy and emitting scope 2 emissions. Using the reporting framework allows for companies to implement the right controls and procedures to significantly reduce their carbon footprint by reducing their energy usage, without the need for expensive investments in renewable assets.  

TIP: GridPoint’s Energy Management System (EMS) helps facility managers effectively eliminate energy waste. This strategically positions companies to seamlessly incorporate carbon accounting into their sustainability initiatives. By doing so, they not only realize significant cost savings but also gain an accurate means of quantifying the carbon reductions resulting from their energy-saving endeavors. 

The integration of carbon accounting within the Gridpoint EMS empowers customers to precisely measure both their Scope 2 emissions and the avoided emissions attributed to the energy savings generated. This level of accuracy enhances your business’s ability to track and report on their carbon footprint reduction progress more comprehensively. 

By prioritizing the elimination of energy waste, GridPoint’s approach is more beneficial and saves companies money compared to simply purchasing Renewable Energy Certificates (RECs) to offset existing carbon footprints. GridPoint is dedicated to supporting customers in achieving their sustainability goals by providing the necessary tools and expertise to optimize energy efficiency, accurately measure emissions, and generate tangible energy savings. 

Step 3: Collect and Analyze Data

Once you have determined the reporting requirements, the next step is to collect the data needed for carbon reporting. This can include energy bills, emissions data from utility companies, and data from any renewable energy sources used by your building. Collecting data is the single most prevalent challenge businesses face when taking steps to begin carbon reporting. It is vital to evaluate how your company will gather accurate data, as it will be the foundation for carbon benchmarking and reporting.  

It is also important to consider any data gaps or inconsistencies that may exist. For example, if your company purchases energy from multiple providers, it may be necessary to reconcile the data from each provider to ensure that the carbon reporting is accurate. GridPoint’s EMS is the ultimate tool for data collection and makes it easy for companies to gather accurate and auditable data.  

Many companies take a simplistic approach to carbon reporting by using a constant value of CO2e/kWh to convert total energy usage to an annual average of carbon emissions. However, this approach is highly inaccurate as the carbon per unit of energy varies based on the location and time of day of each facility.  

GridPoint solves this problem by using main load metering devices to accurately measure energy consumption on-site, eliminating the need to hunt down energy bills and build custom reports. With a robust CO2 database featuring location and time-specific carbon conversion factors obtained through real-time integrations with utilities across the country, GridPoint can produce highly sophisticated, accurate, and auditable reports of a company’s emissions from energy use.  

Additionally, GridPoint advises companies on how to shift consumption to avoid peak carbon hours of the day, further reducing their carbon footprint.

Step 4: Set a Scope 2 Reduction Target

When setting Scope 2 reduction targets it is crucial to establish goals that are both realistic and achievable. To effectively establish and achieve realistic Scope 2 reduction targets, it is important to consider several factors. GridPoint offers a range of tools that can assist in reaching these targets. With GridPoint’s Energy Management System (EMS), companies can gain access to comprehensive data from step three, enabling them to analyze energy usage patterns within their buildings. This information allows them to identify areas where reductions can be effectively implemented. 

Additionally, GridPoint provides demand response capabilities, enabling buildings to participate in demand response programs and optimize their energy consumption during peak demand periods. By actively managing peak loads through GridPoint’s EMS, buildings can further reduce their energy consumption and contribute to their Scope 2 reduction targets. 

GridPoint’s suite of tools empowers companies to monitor and evaluate their progress regularly. This allows them to make necessary adjustments along the way and continually strive for improvement, ensuring their sustainability objectives are aligned and their reduction goals remain achievable. 

Step 5: Choose a Reporting Methodology

After collecting the necessary data, the next step is to choose a reporting methodology. As mentioned earlier, there are different approaches to calculating Scope 2 emissions, including market-based and location-based reporting. Companies must choose the methodology that best aligns with their sustainability goals and reporting requirements. 

Market-based reporting is often preferred by companies that prioritize the use of renewable energy sources and want to show their support for the development of clean energy. Location-based reporting is often preferred by companies that want to report on the actual emissions associated with their energy use. 

Tools and resources for measures Scope 2 Emissions  

Accurately measuring Scope 2 emissions requires more than just a simple calculation of energy usage multiplied by a single CO2e/kWh factor. To avoid overpaying for RECs and other emissions-reduction initiatives, companies need access to location and time-specific factors provided by utilities.  

Fortunately, there are tools and resources available that can help companies collect and organize this data into a single reporting suite. When it comes to measuring Scope 2 emissions, several tools and resources are available, and an energy management system (EMS) plays a crucial role in the process. An EMS is a software solution designed to monitor and manage energy consumption within an organization. It collects data from various sources such as utility meters, sensors, and equipment, providing real-time insights into energy usage. By integrating with utility billing systems, an EMS can track and analyze electricity consumption, enabling organizations to measure their indirect emissions associated with purchased electricity.  

An EMS can generate comprehensive reports, visualizations, and analytics to help organizations identify energy-saving opportunities, optimize energy usage, and ultimately reduce their carbon footprint. GridPoint’s real-time energy meters, in combination with our real-time emissions data, provide the ultimate solution for ensuring unparalleled accuracy. By leveraging this powerful combination, businesses can confidently measure and manage their energy usage and emissions in real-time, enabling precise tracking and optimization of their environmental performance.

Step 6: Calculate Emissions and Report

Once you have chosen a reporting methodology, the final step is to calculate the Scope 2 emissions and report them. This involves combining energy consumption data with emissions data to calculate scope 2 emissions using the methodology of choice.  The resulting emissions data can be included in a sustainability report or disclosed to stakeholders using reporting standards outlined by The Greenhouse Gas Protocol.  

It is important to note that carbon reporting is an ongoing process, and companies should regularly review and update their emissions data to ensure accuracy and identify opportunities for improvement. By tracking Scope 2 emissions and implementing strategies to reduce them, companies can make progress toward their sustainability goals and demonstrate their commitment.

Get Started Today

Setting Scope 2 reduction targets is a key step in a company’s sustainability journey. By establishing an accurate Scope 2 inventory, setting achievable and ambitious targets, and implementing strategies to reduce emissions, companies can improve their environmental impact, reduce energy usage, and save money. 

GridPoint’s EMS makes carbon reporting, accounting, and reduction easy. GridPoint provides clear guidance on determining reporting requirements and assists in collecting the necessary data, including energy bills, emissions data from utility companies, and information from renewable energy sources. By leveraging GridPoint’s EMS platform, businesses can overcome common challenges such as data gaps and inconsistencies. GridPoint ensures that the data collection process is efficient and accurate, laying a solid foundation for precise carbon reporting. With GridPoint, businesses can confidently initiate their carbon reporting efforts, empowering them to measure, track, and manage their carbon footprint effectively. 

Get started today with a free energy analysis. Our energy experts will perform a no-cost site evaluation for your property and determine ways your building can lower overall energy usage and carbon emissions.