Atomically precise Au nanoclusters, stabilized by organic ligands, exhibit well-defined structure (size/shape), but the accessibility of reactants to the metal is limited by the ligands. Experiments show that these nanoclusters are active for CO2 electroreduction, but the catalytic active sites are elusive. In this work, we apply first principles calculations to assess the CO2 reduction to CO on thiolate protected Au-based nanoclusters. We demonstrate that partial ligand loss from the nanocluster under electrochemical conditions generates active sites, significantly stabilizing the COOH intermediate. Interestingly, the reaction intermediates act as stabilizing ligands on the nanocluster. Importantly, heterometal doping can alter the electronic properties of the nanoclusters and tune the electrocatalytic activity and selectivity. This work highlights the importance of the electronic state of ligand-protected nanoclusters and the generation of catalytically active sites for CO2 electroreduction. Our computational findings rationalize experimental observations and demonstrate paths for designing active and tunable electrocatalysts.