Wilson Ricks is a manager in the Clean Air Task Force’s electricity program.
Over the past decade, corporate electricity procurement has undeniably helped catalyze a meaningful amount of clean energy development. But the stories companies tell in their sustainability reports, of having completely shed their dependence on fossil-fired electricity, consistently outrun the more modest reality of what those purchases have actually achieved. Increasingly common claims of 100% reliance on intermittent wind and solar power are clearly at odds with the physical reality of any company’s electricity supply. Yet under the current rules of the Greenhouse Gas Protocol, the de-facto global standard for corporate emissions accounting, these claims are entirely legitimate. That may be about to change.
The protocol’s guidance on electricity emissions accounting, first published in 2015, has become the basis for nearly every voluntary or government-mandated emissions reporting program worldwide. It acts as a key incentive for corporate climate action, allowing companies to claim clean power consumption via purchases of “energy attribute certificates” associated with actual units of clean electricity generation.
Crucially, the current guidance allows companies to claim the use of clean power generated at any time and nearly any location, regardless of where and when they actually consume electricity. For example, a company can operate a data center in Virginia and claim that it runs exclusively on solar power from California. While unrealistic, this approach was intended to enable easier participation in clean energy markets at a time when wind and solar were still expensive and difficult to access.
But as renewable energy costs have fallen and deployment has skyrocketed over the last decade, the protocol’s lenient approach has begun to show its downsides — not least of which is increasing public skepticism of corporate emissions reporting. As companies have moved on from smaller-scale clean power purchases toward purported achievement of “100% renewable” targets in recent years, the physical impossibility of their claims has become increasingly obvious. Growth in AI electricity demand has brought this dissonance even more to the fore, as large tech companies visibly turn to unabated gas and coal to meet their data centers’ local, 24/7 power needs.
Meanwhile, the clean certificate purchases backing up these claims are likely not as impactful as hoped. Current Greenhouse Gas Protocol guidance allows and incentivizes companies to source certificates from only the lowest-cost wind and solar projects nationwide — the projects most likely to have found other buyers based on the value of their power alone. As a result, academic research has shown that even when companies procure 100% wind and solar power under current protocol rules, their actions can have little impact on overall electricity system emissions.
Finally, the current protocol fails to incentivize investments in critical technologies that can help deliver clean power at all times and in all places. To enable greater reliance on wind and solar power, energy storage and demand-side flexibility will be needed to better align electricity demand with their availability. Likewise, studies of low-carbon power systems consistently show the need for “clean firm” resources like nuclear, geothermal, and natural gas paired with carbon capture that can provide round-the-clock clean generation regardless of the weather. Unfortunately, these technologies’ capabilities are useless to companies seeking to reduce their reported emissions under the current protocol rules.
In response to mounting criticism and broad consensus on the inadequacy of the current approach, the Greenhouse Gas Protocol has proposed an update to its electricity sector standard. Among other reforms, the proposal would allow large companies to claim consumption of clean power only when it is generated at the same time as their electricity demand and is physically deliverable to their location via the grid.
These requirements would align emissions accounting with the realities of physical electricity systems and power markets, which are constrained by transmission availability and must precisely balance supply and demand at all times. Instead of simply buying the single cheapest renewable energy option available, companies aiming to make zero-emissions claims would need to procure the full range of clean resources necessary to meet their electricity needs in all times and places. Not only would this reduce reliance on the unabated fossil fuels that currently fill gaps in renewable output, it would also provide key emerging technologies with the same early support that propelled wind and solar toward market competitiveness over the last several decades.
The proposed update is already receiving pushback from some large corporations whose “100% clean” status it threatens, but Greenhouse Gas Protocol leadership must stay the course. Legitimate concerns, including feasibility of participation for small businesses, protections for existing long-term contracts, and impacts on early-stage climate technologies, can be addressed through prudent implementation of exemptions and phase-ins already included in the proposal.
If the protocol can push through the noise and deliver on the more realistic accounting methodology it has proposed, it can restore trust in climate reporting while aligning corporate energy procurement with the needs of tomorrow’s grid.
