Tools · Scope 2
IFRS S2 does not let you choose between location-based and market-based.
It is put as a choice almost everywhere, and it is not one. Paragraph 29(a)(v) requires the location-based figure, and the application guidance repeats it for the avoidance of doubt. What varies is what else you have to disclose, and that depends on the contractual instruments you hold and the markets you hold them in.
Four questions. It runs entirely in your browser, there is no signup and no email gate, and the result has its own link you can send to whoever owns the methodology.
This is a reading of the requirements, not advice on your particular facts. The paragraph references are there so you can check it.
Why the tool starts there
The choice people think they are making was already made for them.
The location-based method uses average grid emission factors for the area where the electricity was consumed. The market-based method uses factors derived from the instruments you have contracted for. Both are legitimate ways of describing the same electricity, and they can produce very different numbers, which is precisely why the standard does not let the preparer pick one.
What paragraph 29(a)(v) asks for is the location-based figure and, separately, information about any contractual instruments you have entered into where that information would inform a reader. The application guidance adds that an entity might disclose market-based Scope 2 as part of that. Might. It is the normal way to satisfy the requirement, and it is not the requirement.
One consequence is easy to miss. Because market-based is not mandated by IFRS S2, the decision to present it is yours, which means it is a methodology decision you have to be able to defend and keep a record of. Choices the standard makes for you need no justification. Choices you make do.
Instruments
What counts, and what each one obliges you to keep.
The definition is deliberately wide: any contract for energy bundled with generation attributes, or for attribute claims sold separately from the energy. The evidence burden differs sharply by type, and it is usually heaviest where the commercial arrangement is most bespoke.
Scroll sideways →
| Instrument | What it is | What has to be evidenced |
|---|---|---|
| Unbundled certificates | RECs, GOs, I-RECs and equivalents, purchased separately from the electricity itself. | Retirement or cancellation on your behalf, vintage against the consumption period, and sourcing from the market where the electricity was used. |
| Power purchase agreements | A contract with a generator, physical or virtual, usually conveying attributes with the volume. | The contract terms that actually transfer the attributes, how contracted volumes were allocated to sites, and that the attributes were not also sold elsewhere. |
| Supplier-specific and green tariffs |
A factor or product from your electricity supplier rather than a grid average. | The supplier's calculation basis, and whether it reflects delivered electricity after attributes sold away to other customers. |
| On-site generation | Generation you own and consume behind the meter. | Whether the attributes were retained or sold. If sold, the electricity cannot also be claimed as zero-emission. |
| None held | Grid supply with no attribute claim. | The grid factors used with source and year, consumption reconciled by site, and a note that no instruments were held. |
The part that fails in assurance
Holding a certificate is not the same as being able to use it.
The GHG Protocol Scope 2 Guidance sets eight quality criteria that a contractual instrument has to satisfy before it can be used in a market-based total. They are not about whether the generation was worthwhile. They are about whether the instrument does what an accounting claim needs it to do: carry the emission rate attribute, carry it exclusively, be retired on your behalf, line up with the right period, and come from the right market.
An instrument that fails them does not simply weaken the claim. It cannot be used in the market-based calculation at all, and you fall back to other data for that volume. The commercial deal can be entirely sound and the accounting claim still fail, most often on exclusivity or on the market boundary.
This is the single most common place a Scope 2 figure comes apart under review, and it comes apart late, because the certificates are usually bought by a procurement or energy team and the retirement evidence is not something finance has ever been asked for. The criteria are set out in full in the Scope 2 Guidance; the tool above turns them into the evidence list rather than restating them.
The version question nobody asks
IFRS S2 ties measurement to the GHG Protocol Corporate Standard of 2004. The Scope 2 Guidance is from 2015. So the dual-reporting requirement is not automatically imported by IFRS S2 on its own — it binds you where a jurisdiction requires it, or where you have said in your own methodology that you follow the Guidance. Saying so is usually the right call. Just notice that you said it, because it is then a commitment a reviewer can hold you to.
After the answer
The decision is the easy half.
Working out what to report takes an afternoon. Being able to show, a year later, why that was the right reading and that the underlying instruments held up is the part that takes a system. The record above is what an assurance provider will ask to see, and it is much cheaper to write while you are deciding than to reconstruct afterwards.
Score your evidence position →Six minutes, no signup. Or check your climate targets against paragraph 33, read the paragraph map of IFRS S2, or see what it takes to reproduce a figure.