The New Rules of Scope 2: What SBTi V2.0 Means for Corporate Renewable Energy Strategy

For more than a decade, corporate Scope 2 strategy has relied heavily on renewable electricity procurement, market-based instruments, and annual matching to support emissions reduction claims. This has never been simple. Energy markets vary widely by geography, regulations, supply availability, and buyer risk tolerance, which means that effective Scope 2 management has always required more than a certificate-purchasing exercise. 

The SBTi Corporate Net-Zero Standard V2.0 builds on that reality rather than replacing it. The standard does not require every company to move to hourly matching or completely redesign its renewable energy strategy. Instead, it introduces a more structured framework for how electricity decarbonization actions are evaluated, implemented, and reported. The most relevant changes include: 

• The introduction of an implementation hierarchy for emissions reduction actions 
• Low-carbon electricity (LCE) target pathways 
• This is a target-setting option that allows companies to set a target to increase the percentage of LCE in their portfolio on a linear trajectory in line with an eligible net-zero pathway 
• Considerations related to activity-pool boundaries and project eligibility 
• Electricity demand forecasting requirements for certain companies 
• Companies forecasting annual electricity consumption growth higher than 20% over the target cycle must set an emissions target and can choose to set an additional LCE alignment target 
• A voluntary recognition framework for hourly matching  

Together, these changes provide additional criteria for evaluating how electricity procurement supports target achievement and how market-based instruments fit within a broader corporate decarbonization strategy, while positioning hourly matching as a leadership opportunity rather than a universal requirement. 

For clean energy buyers, the key question is not whether today’s procurement approaches remain valid, as in most cases, they do. The more important question is whether current strategies are aligned with the evolving framework for target-setting, implementation, reporting, and recognition under V2.0. 

The Foundation of V2.0: an implementation hierarchy for electricity decarbonization 

One of the most significant changes in V2.0 is the introduction of an implementation hierarchy. Rather than treating all renewable electricity procurement the same, the hierarchy distinguishes between actions that directly reduce a company’s physical electricity-related emissions, actions within the company’s defined activity pool, and the broader sector-level actions where direct or deliverable options are limited. 

For Scope 2, this provides a clearer framework for understanding how different clean energy actions contribute to decarbonization. Examples may include: 

• Direct actions (activity), such as energy efficiency improvements, electrification, or onsite generation 
• Activity-pool actions, such as many forms of renewable electricity procurement that operate within broader electricity systems 
• Sector-level actions, where companies operate in markets with technological, regulatory, or infrastructure constraints that limit direct procurement options 

The implementation hierarchy should not be viewed as a ranking of “good” vs “bad” procurement approaches. Rather, it provides a framework for explaining how actions support progress towards a company’s targets, and how procurement decisions fit within the electricity systems from which companies consume power. 

Testing the waters: is the clean energy local, newer, and time-aligned? 

V2.0 identifies several concepts that may dictate how companies evaluate future procurements, particularly around activity-pool boundaries, project vintage, and optional hourly matching recognition. These considerations may not fundamentally change procurement strategies for most buyers, but they may influence how companies assess the long-term fit of future transactions.  

When evaluating future clean energy procurements, consider the following questions:   

1. Deliverability 
   
   Is clean energy being procured in the relevant activity pool or deliverability region associated with the electricity we consume? Activity-pool boundaries become an important consideration under the V2.0 framework. 
    
2. Project Vintage 
   
   Do current and planned contracts align with V2.0’s 15-year generator age threshold throughout the target period? 
    
3. Temporal Matching 
   
   Would our company benefit from hourly matching recognition? While annual matching remains a viable strategy, V2.0 recognizes hourly matching as a leading approach.
    

Why the 2027 Transition Window Matters 

Companies can continue to use the current V1.3.1 standard through December 31, 2027. Targets that have already been validated under that standard are expected to remain valid until their target end date while V2.0 becomes required for new target submissions beginning in 2028.  

This transition period creates an important planning window for clean energy buyers to better understand several new elements within V2.0, including: 

• Implementation hierarchy requirements 
• Low-carbon electricity alignment targets 
• Electricity demand forecasting requirements 
• Project vintage considerations 
• Optional hourly matching recognition pathways 
• Progress reporting expectations 

Importantly, companies should distinguish between changes contained within SBTi V2.0 and broader discussions regarding the future evolution of GHG Protocol Scope 2 guidance. While the topics are related, they are not the same discussion.  

What clean energy buyers should consider now 

One of the more meaningful Scope 2 developments in V2.0 is the introduction of low-carbon electricity (LCE) as a defined target-setting pathway. This expands the conversation beyond renewable electricity alone and creates additional flexibility for companies operating in markets where a broader set of low-carbon resources may be available. 

As clean energy buyers evaluate their next generation of clean energy strategy, the following questions should be considered: 

• Does our current procurement portfolio align with V2.0's implementation hierarchy? 
• Have we evaluated whether a low-carbon electricity alignment target may be appropriate for our organization? 
• Do we understand how future electricity demand growth may inf00luence procurement needs? 
• Have we reviewed long-term contracts against project vintage and eligibility requirements? 
• Does pursuing hourly matching recognition align with our corporate objectives and available resources? 
• Can we clearly explain how our clean energy actions support target achievement and broader decarbonization goals? 

The Bottom Line 

SBTi V2.0 should not be viewed as a mandate to overhaul corporate renewable energy strategies. Most of the tools companies are relying on today, including PPAs, VPPAs, utility programs, and EAC procurement remain viable components of a Scope 2 strategy under the V2.0 standard.  

What V2.0 does provide is a more structured framework for evaluating and communicating electricity decarbonization actions. Through concepts such as the implementation hierarchy, low-carbon electricity targets, project eligibility considerations, and optional hourly matching, the standard encourages companies to think more deliberately about how clean energy procurement supports long-term target achievement. 

For most companies, the challenge is not developing a completely different clean energy strategy. It is ensuring that the strategy they already have can be clearly explained, effectively implemented, and aligned with the next generation of corporate climate target-setting.