The GHG Protocol and ISO are jointly rewriting the foundational rules for corporate electricity emissions accounting, with a draft unified standard now expected for public consultation in the second quarter of 2027 and a separate consequential accounting module for power purchases slated for release later this year. The overhaul shifts focus from attributional methods — which assign emissions based on grid averages or contractual instruments — toward consequential approaches that measure the actual system-wide impact of a company’s electricity procurement and climate investments, a change that could materially alter reported Scope 2 footprints for heavy industrial buyers and data-center operators.
The timing reflects mounting pressure from regulators and investors for comparable, decision-useful climate data. Since the Corporate Accounting and Reporting Standard debuted in 2001, voluntary markets have layered Scope 2 guidance, market-based instruments, and value-chain interventions onto a framework never designed to handle them. The International Sustainability Standards Board’s parallel effort to integrate SASB sector metrics into its disclosure baseline adds another convergence vector, signaling that the era of fragmented, choose-your-own-methodology carbon accounting is closing.
For energy-intensive sectors, the stakes are immediate. Consequential accounting for “insets” — supply-chain decarbonization investments that fall outside traditional offset markets — would let companies claim emissions reductions from actions like financing renewable capacity additions or efficiency upgrades at supplier facilities. But the methodology remains contested: critics warn it risks double-counting and weak additionality tests, while proponents argue attributional methods already obscure the real climate impact of procurement choices. The GHG Protocol’s January consultation on electricity consequential accounting drew sharp divisions along exactly these lines.
Companies tracking science-based targets or preparing for CSRD and SEC climate disclosures should treat the 2027 unified standard as the new compliance horizon, but the interim consequential draft due this quarter will force earlier strategic decisions. Power purchase agreement structures, renewable energy certificate strategies, and supply-chain engagement models all face re-evaluation once the final rules land. The standards bodies have promised alignment with ISO 14064, but until the text is public, scenario planning around multiple accounting outcomes remains the prudent path.
Read the full report at GreenBiz.