Difference between revisions of "GHG Accounting"
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=== Relevance === | === Relevance === | ||
| − | Ensure the [[GHG Inventory]] appropriately reflects the [[GHG Emissions]] of the company and serves the decision-making needs of users - both internal and external to the company. | + | '''Ensure the [[GHG Inventory]] appropriately reflects the [[GHG Emissions]] of the company and serves the decision-making needs of users - both internal and external to the company'''. |
For an organization's [[GHG Report]] to be relevant means that it contains the information that users —both internal and external to the company—need for their decision making. An important aspect of relevance is the selection of an appropriate [[GHG Inventory Boundary]] that reflects the substance and economic reality of the company’s business relationships, not merely its legal form. The choice of the inventory boundary is dependent on the characteristics of the company, the intended purpose of information, and the needs of the users. When choosing the inventory boundary, a number of factors should be considered, such as: | For an organization's [[GHG Report]] to be relevant means that it contains the information that users —both internal and external to the company—need for their decision making. An important aspect of relevance is the selection of an appropriate [[GHG Inventory Boundary]] that reflects the substance and economic reality of the company’s business relationships, not merely its legal form. The choice of the inventory boundary is dependent on the characteristics of the company, the intended purpose of information, and the needs of the users. When choosing the inventory boundary, a number of factors should be considered, such as: | ||
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=== Completeness === | === Completeness === | ||
| − | Account for and report on all GHG | + | '''Account for and report on all [[GHG Emission Sources]] and activities within the inventory boundary. Disclose and justify any specific exclusions.''' |
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| + | All relevant emissions sources within the chosen inventory boundary need to be accounted for so that a comprehensive and meaningful inventory is compiled. In practice, a lack of data or the cost of gathering data may be a limiting factor. Sometimes it is tempting to define a minimum emissions accounting threshold (often referred to as a [[GHG Materiality Threshold]]) stating that a source not exceeding a certain size can be omitted from the inventory. Technically, such a threshold is simply a predefined and accepted negative bias in estimates (i.e., an underestimate). | ||
| + | |||
| + | Although it appears useful in theory, the practical implementation of such a threshold is not compatible with the completeness principle of the GHG Protocol Corporate Standard. In order to utilize a materiality specification, the emissions from a particular source or activity would have to be quantified to ensure they were under the threshold. However, once emissions are quantified, most of the benefit of having a threshold is lost. | ||
| + | |||
| + | A threshold is often used to determine whether an error or omission is a material discrepancy or not. This is not the same as a de minimis for defining a complete inventory. Instead companies need to make a good faith effort to provide a complete, accurate, and consistent accounting of their GHG emissions. For cases where emissions have not been estimated, or estimated at an insufficient level of quality, it is important that this is transparently documented and justified. [[GHG Verification]] can determine the potential impact and relevance of the exclusion, or lack of quality, on the overall inventory report. | ||
=== Consistency === | === Consistency === | ||
Revision as of 21:54, 25 October 2021
Contents
Definition
GHG Accounting. A means of measuring the direct and indirect emissions to the Earth’s Biosphere of CO2 and its equivalent gases from industrial activities
Principles
The GHG Protocol[1] Principles stipulate:
Relevance
Ensure the GHG Inventory appropriately reflects the GHG Emissions of the company and serves the decision-making needs of users - both internal and external to the company.
For an organization's GHG Report to be relevant means that it contains the information that users —both internal and external to the company—need for their decision making. An important aspect of relevance is the selection of an appropriate GHG Inventory Boundary that reflects the substance and economic reality of the company’s business relationships, not merely its legal form. The choice of the inventory boundary is dependent on the characteristics of the company, the intended purpose of information, and the needs of the users. When choosing the inventory boundary, a number of factors should be considered, such as:
- Organizational structures: control (operational and financial), ownership, legal agreements, joint ventures, etc.
- Operational boundaries: on-site and off-site activities, processes, services, and impacts
- Business context: nature of activities, geographic locations, industry sector(s), purposes of information, and users of information
Completeness
Account for and report on all GHG Emission Sources and activities within the inventory boundary. Disclose and justify any specific exclusions.
All relevant emissions sources within the chosen inventory boundary need to be accounted for so that a comprehensive and meaningful inventory is compiled. In practice, a lack of data or the cost of gathering data may be a limiting factor. Sometimes it is tempting to define a minimum emissions accounting threshold (often referred to as a GHG Materiality Threshold) stating that a source not exceeding a certain size can be omitted from the inventory. Technically, such a threshold is simply a predefined and accepted negative bias in estimates (i.e., an underestimate).
Although it appears useful in theory, the practical implementation of such a threshold is not compatible with the completeness principle of the GHG Protocol Corporate Standard. In order to utilize a materiality specification, the emissions from a particular source or activity would have to be quantified to ensure they were under the threshold. However, once emissions are quantified, most of the benefit of having a threshold is lost.
A threshold is often used to determine whether an error or omission is a material discrepancy or not. This is not the same as a de minimis for defining a complete inventory. Instead companies need to make a good faith effort to provide a complete, accurate, and consistent accounting of their GHG emissions. For cases where emissions have not been estimated, or estimated at an insufficient level of quality, it is important that this is transparently documented and justified. GHG Verification can determine the potential impact and relevance of the exclusion, or lack of quality, on the overall inventory report.
Consistency
Use consistent methodologies to allow for meaningful performance tracking of emissions over time. Transparently document any changes to the data, inventory boundary, methods, or any other relevant factors in the time series.
Transparency
Address all relevant issues in a factual and coherent manner, based on a clear audit trail. Disclose any relevant assumptions and make appropriate references to the accounting and calculation methodologies and data sources used.
Accuracy
Ensure that the quantification of GHG emissions is systematically neither over nor under actual emissions, as far as can be judged, and that uncertainties are reduced as far as practicable. Achieve sufficient accuracy to enable users to make decisions with reasonable confidence as to the integrity of the reported information.
