Managing Scope 2 Emissions

Article by Constellation

As businesses work to reduce their carbon footprint and meet sustainability goals, addressing Scope 2 emissions has become a critical part of their environmental strategy. Businesses can implement a variety of immediate and long-term solutions to reduce Scope 2 emissions and meet their sustainability goals.

Understanding Scope 2 Emissions

These indirect greenhouse gas emissions come from purchased energy used to power company operations. Although they physically occur at the facility where the energy is generated, they are included in an organization’s GHG inventory because they stem from the organization’s energy use.

When accounting for Scope 2 emissions from purchased electricity, businesses have two primary approaches:

• Location-Based Method: Assesses average emission factors for regional utility grids supplying a company’s facilities. It provides insights into the general carbon intensity of electricity where a company operates.
• Market-Based Method: Reflects emissions from electricity that companies have purposefully chosen. It inventories emissions via contractual instruments, which include any type of contract between two parties for the sale and purchase of energy bundled with attributes about the energy generation, or for unbundled attributes.

While understanding the distinction between location-based and market-based methods is crucial, businesses should also consider the impact of their chosen solutions. To effectively reduce emissions, it’s important to consider strategies based on their timeframes. At Constellation, we have a variety of Scope 2 products categorized by their immediate and long-term impact.

Solutions for Reducing Scope 2 Emissions

Reducing Scope 2 emissions is essential for demonstrating a commitment to environmental sustainability. This can be achieved through carbon-free power generation, energy efficiency measures, on-site generation, purchasing renewable energy certificates (RECs) or emission-free energy certificates (EFECs), and improving grid integration.

When choosing the optimal solutions, businesses should consider several factors including urgency, budget constraints and sustainability goals. Immediate impact solutions provide quick, measurable results for urgent emissions reduction, while long-term solutions involve direct actions and commitments, supporting the development of new renewable energy projects.

Immediate Impact Solutions

Customers can make a cost-effective investment to support the production of electric power from generation sources that do not directly emit greenhouse gases (GHG) by purchasing carbon-free or renewable electricity. Both are easy to implement, significantly impact emissions reduction and help meet sustainability goals.

• Emission-Free Energy Certificates (EFECs) represent the emission-free attributes of generation sources like solar, wind, nuclear and hydropower. Available in both regulated and competitive energy markets, this low-cost solution supports emission-free energy generation sources and may assist your company in meeting goals for lowering emissions associated with its annual electricity consumption.^{1, 2} 
• Renewable Energy Certificates (RECs) support sustainability goals by representing the environmental benefits of renewable energy. Sourced from renewable generating facilities within the continental U.S., each REC represents proof that energy has been generated from renewable sources and is retired on behalf of a company’s environmental commitment.
• Project-Specific RECs offer location-specific benefits by sourcing RECs from specific offsite renewable projects. Available in both competitive and regulated energy markets, businesses that purchase project RECs are supporting renewable energy projects that can lower their Scope 2 emissions.²

Long-Term Solutions

Businesses looking for longer-term solutions can choose between solutions that provide substantial benefits and significantly reduce carbon emissions.

• Constellation Offsite Renewables (CORe) integrates renewable energy purchases from existing or new build renewable generation assets into a load-following energy supply agreement. Constellation provides customers energy and project RECs from the renewable project.
• Hourly Carbon-Free Energy Matching (HCFE) aligns a company’s electricity consumption with local, emission-free energy sources on an hourly basis, helping eliminate carbon impact so businesses can reach net-zero goals.

Charting a Path Towards Sustainability

Businesses can leverage any of these immediate impact or long-term solutions to find the optimal strategy that aligns with their needs. Connect with a Constellation expert today to identify a custom strategy and move towards a more sustainable future.

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¹ Check your GHG reporting protocols to confirm.

² Based on current World Resources Institute (WRI) guidance. Scope 2 reporting claims of this product may be affected by future changes.

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