Issue link: https://resources.tangoanalytics.com/i/1508312
VOLUNTARY ANNUAL REPORTING FRAMEWORKS/STANDARDS The most widely used and industry standard reporting frameworks all strongly recommend, if not require the inclusion of scope II data in reports. Companies would choose to report data aligned with the Science Based Targets, SASB, GRI, and/or TCFD when crafting their annual ESG/CSR/ sustainability reports. While Scope II guidance has been out for a while, as investor and regulatory pressure to report GHG emissions increases, it is important for companies new to GHG accounting to understand, given its implications in tracking progress towards emission reduction goals. Whether it is voluntary frameworks, or mandated reporting regulation, all will require scope I and II emissions data, while scope III is what is typically voluntary. Even if you are unconcerned with pending regulation or market pressure, it is good practice to have verified scope II information ready for climate risk reports that may be requested of you from your board of directors, current investors, future investors, and other stakeholders. Sustainability & Energy Management Simplified WHY SHOULD AN ORGANIZATION MEASURE ITS SCOPE II EMISSIONS? Energy Generation is responsible for approximately 40% of global emissions and is considered one of the simplest avenues to reduce overall emissions through energy efficiency measures and the adoption of renewable energy. The integration of energy and sustainability here is key, as emissions are largely derivative of energy consumption. By this reasoning, Scope II, dealing with energy generation is incredibly important for companies who want to make quick, significant reductions to their emissions. Examples of reduction opportunities include implementing energy efficiency measures, participating in green power markets, installing onsite renewables, procuring unbundled RECS/EACs, and utility voluntary renewable programs. REPORTING PLATFORMS For actual reporting platforms, companies are required to submit their scope I and II data as part of the data criteria to CDP, and the real estate- focused GRESB. REGULATIONS The EU CSRD and SFDR, the global ISSB standards, and pending legislation from the SEC will all require scope II emissions data. Scope III is the only emissions category that may be subject to leniency or omitted in reporting regulation. In addition, mandatory building performance standards such as NYC LL97 will mandate scope II accounting.