As sustainability becomes a central focus for businesses worldwide, understanding and reporting greenhouse gas (GHG) emissions accurately is crucial. One of the core components of carbon accounting is Scope 2 emissions—indirect emissions from purchased energy. Companies like QuikESG play a pivotal role in helping organizations manage their Environmental, Social, and Governance (ESG) reporting, making it easier to measure, monitor, and reduce Scope 2 emissions with precision and compliance.

What Are Scope 2 Emissions?

Scope 2 emissions are the indirect GHG emissions generated from the consumption of purchased electricity, steam, heating, and cooling. While these emissions occur at the facility where the energy is produced (e.g., a power plant), they are accounted for in a company’s carbon footprint because the organization is responsible for the energy usage.

In simpler terms, if your company uses electricity from a local utility company, the emissions from generating that electricity are counted as your Scope 2 emissions.

Scope 2 is one of three categories defined by the Greenhouse Gas Protocol:

• Scope 1: Direct emissions from owned or controlled sources.

• Scope 2: Indirect emissions from the generation of purchased energy.

• Scope 3: All other indirect emissions that occur in a company’s value chain.

Why Is Scope 2 Important?

Scope 2 is critical for several reasons:

• Energy Efficiency Focus: It highlights how efficiently a company uses energy, prompting improvements in infrastructure and operations.

• Influence on the Grid: Companies can influence utilities to switch to renewable sources through demand and procurement choices.

• Stakeholder Transparency: Investors, customers, and regulators increasingly expect detailed ESG disclosures, and Scope 2 is a major component of that transparency.

How Are Scope 2 Emissions Calculated?

Scope 2 emissions are typically calculated using one of two methods:

1. Location-based method: Reflects the average emissions intensity of the grids where energy consumption occurs.

2. Market-based method: Reflects emissions from electricity a company has purposefully chosen (e.g., through green energy contracts or certificates).

Organizations often report both methods to provide a complete picture of their energy impact.

Reducing Scope 2 Emissions

Companies can reduce their Scope 2 footprint by:

• Switching to Renewable Energy: Purchasing renewable energy certificates (RECs) or entering power purchase agreements (PPAs).

• Improving Energy Efficiency: Upgrading equipment, improving insulation, or automating systems to reduce energy use.

• Green Building Initiatives: Designing energy-efficient buildings and facilities.

The Role of ESG Reporting and QuikESG

As governments and stakeholders continue to raise expectations around sustainability, robust ESG reporting is no longer optional. Tools and platforms provided by QuikESG help businesses streamline their ESG data collection, automate Scope 2 emissions calculations, and generate reports aligned with global standards such as GRI, SASB, and TCFD. Whether you are just starting your sustainability journey or seeking to improve transparency, QuikESG empowers organizations to take control of their indirect emissions and contribute meaningfully to global climate goals.