Get documents about "Chapter 1 GHG Accounting and Reporting Principles (PDF)
Document Sample
Design Principles
CHAPTER 1
GHG Accounting and Reporting
Principles
s with financial reporting, generally ■ Transparency. Address all relevant issues in
A accepted GHG accounting and report-
ing principles are intended to
underpin and guide GHG accounting and
a factual and coherent manner, based on a
clear audit trail. Disclose any relevant
assumptions and make appropriate refer-
reporting to ensure that the reported informa- ences to the accounting and calculation
tion represents a faithful, true, and fair account methodologies and data sources used.
of an organization’s GHG emissions.
■ Accuracy. Ensure that the quantification of
GHG accounting and reporting practices are GHG emissions is systematically neither
evolving and are new to many businesses; how- over nor under true emissions, as far as can
ever the principles are derived in part from be judged, and that uncertainties are
generally accepted financial accounting and reduced as far as practicable. Achieve suffi-
reporting principles. The principles, listed cient accuracy to enable users to make
below and described in more detail in this decisions with reasonable assurance as to
chapter, reflect the outcome of a collaborative the integrity of the reported information.
process involving stakeholders from a wide
range of technical, environmental, and account-
Relevance
ing disciplines.
For an organization’s GHG report to be relevant
■ Relevance. Ensure the GHG inventory means that it contains the information that
appropriately reflects the GHG emissions of users—both internal and external to the com-
the company and serves the decision-mak- pany—need for their decision making. An
ing needs of users—both internal and important aspect of relevance is the selection
external to the company. of an appropriate inventory boundary that
reflects the substance and economic reality of
■ Completeness. Account for and report all
the company’s business relationships, not
GHG emissions sources and activities within
merely its legal form. The choice of the invento-
the chosen inventory boundary. Disclose
ry boundary is dependent on the
and justify any specific exclusions.
characteristics of the company, the intended
■ Consistency. Use consistent methodologies purpose of the information, and the needs of
to allow meaningful comparison of emis- the users. When choosing the inventory bound-
sions over time. Transparently document ary, a number of factors should be considered,
any changes to the data, inventory bound- such as:
ary, methods, or any other relevant factors
■ Organizational structures: control (opera-
in the time series.
tional and financial), ownership, legal
agreements, joint ventures, etc. Climate
C L I M AT E L E A D E R S G H G I N V E N TO RY P R OTO C O L ■ 1
CHAPTER 1 Design Principles
Leaders Partners inventory GHG emissions to as a materiality threshold) stating that a
from all U.S. operations, and have the option source not exceeding a certain size can be
of including international operations as well. omitted from the inventory. Technically, such a
threshold is simply a predefined and accepted
■ Operational boundaries: onsite and offsite negative bias in estimates (i.e., an underesti-
activities, processes, services, and impacts. mate). Although it appears useful in theory, the
The Core and Optional Modules of the practical implementation of such a threshold is
Climate Leaders program provide guidance on not compatible with the completeness principle
the types of operations that should be includ- of Climate Leaders. To utilize a materiality spec-
ed in your inventory. ification, the emissions from a particular source
or activity would have to be quantified to
■ Business context: Partners are creating corpo-
ensure that they were under the threshold.
rate inventories to design and achieve
However, once emissions are quantified, most
entity-wide GHG emissions reduction goals.
of the benefit of having a threshold is lost.
Partners may find that the consistency of the
Climate Leaders program with other GHG A threshold is often used to determine whether
management or tracking programs facilitates an error or omission is a material discrepancy.
use of the inventory for other purposes as This is not the same as a de minimus for defin-
well. ing a complete inventory. Instead, Partners need
to make a good faith effort to provide a com-
More information on setting appropriate bound-
plete, accurate, and consistent accounting of
aries is provided in:
their GHG emissions. For cases where emis-
■ Chapter 3: Setting Organizational Boundaries sions cannot be estimated, or are estimated at
an insufficient level of quality, it is important
■ Chapter 4: Setting Operational Boundaries that this is transparently documented and justi-
fied. Under the Climate Leaders Program, this
Completeness doesn’t necessarily require a rigorous quantifica-
tion of all sources, but, at a minimum, an
All relevant emissions sources within the cho- estimate based on available data should be
sen inventory boundary need to be included so developed for all sources. Verifiers can deter-
that a comprehensive and meaningful inventory mine the potential impact and relevance of the
is compiled. In practice, a lack of data or the exclusion, or lack of quality, on the overall
cost of gathering data may be a limiting factor. inventory report. It is important to include as
An essential component of a complete inventory much information as possible so that the process
is a description of which greenhouse gases are of gathering quality data can be refined in later
included. Partners include CO2, CH4, N2O, SF6, years. To facilitate completeness, consistency,
PFCs, and HFCs to the extent that these gases and transparency in the data gathering process,
exist in their operations. part of the Climate Leaders program includes the
development an Inventory Management Plan.
Sometimes it is tempting to define a minimum
Development of this plan facilitates better moni-
emissions accounting threshold (often referred
toring and data gathering of GHG emissions
2 ■ C L I M AT E L E A D E R S G H G I N V E N TO RY P R OTO C O L
Design Principles
CHAPTER 1
sources. More information on completeness is Transparency
provided in:
Transparency relates to the degree to which
■ Chapter 6: Identifying and Calculating GHG information on the processes, procedures,
Emissions assumptions, and limitations of the GHG inven-
tory are disclosed in a clear, factual, neutral
■ Chapter 7: Managing Inventory Quality and understandable manner based on clear
documentation and archives (i.e., an audit
■ Chapter 10: Verification of GHG emissions
trail). Information needs to be recorded, com-
piled, and analyzed in a way that would enable
Consistency internal reviewers and external verifiers to
Users of GHG information will want to track and attest to its credibility. Specific exclusions or
compare GHG emissions over time to identify inclusions need to be clearly identified and jus-
trends and assess the performance of the tified, assumptions disclosed, and appropriate
reporting company. The consistent application references provided for the methodologies
of accounting approaches, inventory boundary, applied and the data sources used. The infor-
and calculation methodologies is essential to mation should be sufficient to enable a third
producing comparable GHG emissions data party to derive the same results if provided
over time. The GHG information for all opera- with the same source data. A ”transparent “
tions within an organization’s inventory report will provide a clear understanding of the
boundary needs to be compiled in a manner issues in the context of the reporting company
that ensures that the aggregate information is and a meaningful assessment of performance.
internally consistent and comparable over time. An independent external verification is a good
If there are changes in the inventory boundary, way of ensuring transparency and determining
methods, data or any other factors affecting that an appropriate audit trail has been estab-
emission estimates, they need to be transpar- lished and documentation provided. The
ently documented and justified. A specific Climate Leaders program provides an Inventory
format for reporting the corporate emissions sum- Management Plan checklist to guide Partners
mary is required for Climate Leaders’ Partners so towards construction of a Inventory Management
that data reporting consistency can be main- Plan, which in turn, provides for a transparent,
tained. Partners who choose to voluntarily report verifiable inventory.
their facility level data to the Climate Leaders
More information on this is provided in:
program may do so using any format they
choose. ■ Chapter 9: Reporting GHG Emissions
More information on this is provided in: ■ Chapter 10: Verification of GHG Emissions
■ Chapter 5: Tracking Emissions Over Time
■ Chapter 9: Reporting GHG Emissions
C L I M AT E L E A D E R S G H G I N V E N TO RY P R OTO C O L ■ 3
CHAPTER 1 Design Principles
Accuracy
Data should be sufficiently precise to enable
intended users to make decisions with reason-
able assurance that the reported information is
credible. GHG measurements, estimates, or cal-
culations should be systematically neither over
nor under the actual emissions value, as far as
can be judged, and that uncertainties are
reduced as far as practicable. The quantifica-
tion process should be conducted in a manner
that minimizes uncertainty. Use of the calcula-
tion guidance provided in the Climate Leaders
Core Modules, coupled with development of the
Climate Leaders Inventory Management Plan, can
significantly enhance data accuracy and trans-
parency as well as promote credibility.
More information on how to increase your
inventory’s accuracy and on how to minimize
data uncertainties is provided in:
■ Chapter 7: Managing Inventory Quality
4 ■ C L I M AT E L E A D E R S G H G I N V E N TO RY P R OTO C O L
Related docs
