BQF Carbon Reporting LRQA

Carbon Reporting- the present, the limitations,and the futureMadlen KingGlobal Head of Climate Change &SustainabilityLRQA Ltd

Content• Who we are & What we do• The importance of carbon reporting• Existing carbon reporting requirements• Limitations of existing requirements• Potential future direction

The Lloyd’s Register Group at a glance • Provide independent assurance services to enhance the safety of life, property and the environment • Completely independent and impartial • Founded in 1760, we celebrated our 250 year anniversary in 2010 • 7,600 employees operating in 246 locations and 186 countries world-wide • Four business divisions: • Marine • Energy • Transportation • Management systems (LRQA)

LRQA, the world leader in business assurance• A leading independent provider of Business Assurance services including assessment, certification, validation, verification and training• A unique approach - LRQA Business Assurance – to get the most from your business systems• Independently accredited by more than 50 accreditation bodies LRQA Key Business Centers Sweden UK Benelux Germany France Poland China Italy Greece Spain Japan Korea USA Dubai Taiwan Hong Kong India Singapore Brazil Durban Australia

Our Climate Change Services• Assessment, Validation, Verification and Training • Technical committees that improve and develop relating to GHG emission reduction projects and standards including ISO, IETA, WRI, WBCSD and the organisational carbon reports against numerous legal ETG and voluntary standards and schemes around the • Provided the verifiers perspective for the EU ETS world: Commission Decision on Monitoring and Reporting • EU Emissions Trading Scheme (incl Aviation) • Part of the European Co-operation for Accreditation • Clean Development Mechanism drafting accreditation requirements for verifiers • Joint Implementation • Represents UK on development of ISO 14064 standards • ISO 14064 for GHG validation, verification and monitoring • Carbon Disclosure Project • Member of Japan Operational Entities Association (JOEA) • PAS 2050 • One of only four strategic verification partners of the • The Climate Registry Carbon Disclosure Project (CDP) • National/state-wide schemes incl US, Japan, South • Vice President of the Association of DOE’s under the Korea, Australia CDM - DIA

The Importance of GHG Monitoring & Reporting• “Warming of the climate system is unequivocal”• “Most of the observed increase in globally averaged temperatures since the mid-20th century is very likely due to the observed increase in human greenhouse gas concentrations”• “During the 21st century • world temperatures could rise by between 1.1 and 6.4 °C • Sea levels will probably rise by 18 to 59 cm • There will be more frequent warm spells, heat waves, and heavy rainfall. • There will be an increase in droughts, tropical cyclones, and extreme high tides” The Intergovernmental Panel on Climate Change (IPCC), 2007

Abnormal Weather Events

Global Climate Change Policy Development International National Level • UK ETS1992 - Agreed the United Nations Framework Convention on Climate Change (UNFCCC) • CARB - To stabilise GHG concentrations in the • NGERS atmosphere at a level that would prevent • JVETS dangerous anthropogenic interference with the climate system • EU ETS1997 - Kyoto Protocol adopted • S Korean Act • JI2001 - Flexible Mechanisms of International Emissions Trading (IET), Clean Development Mechanism • CDM (CDM) and Joint Implementation (JI) agreed • China ETS • ISO 14064 • GHG Protocol • CDP

Monitoring & reporting - the Same but Different • Same aims • Monitoring and reporting GHG emissions to achieve reduction • By placing a price on carbon • Delivering accurate and trustworthy data through independent 3rd party verification • Different Detail • Boundaries (organisational) • Sectors • Gases • Types of emissions (largely direct only, not energy indirect, not other indirect) • Calculation approaches (acceptable uncertainty) • Resultant allowances and/or credits

Verification – the Same but Different• Differing • Level of Assurance – reasonable or limited? • Materiality level • The accreditation requirements placed on the verification bodies • Means of addressing errors

The Results• Alphabet Soup of allowance and credit types • AAU, ACCU, CCA, CCER, CER, CRT, EUA, ERU, NZU, VCU, VER• Uncertainty, lack of confidence and lack of trust that 1 tonne from 1 scheme = 1 tonne from another• Complex practices for global organisations

Case Study Example Solution – Repsol • Repsol has a requirement for its GHG emissions to be monitored, reported and verified within the EUETS and also has operations in a number of countries outside Europe – operations in 29 countries • Repsol’s objective is to be able to adopt common procedures internally to manage this irrespective of location. • Their expectation that both stakeholder requirements and regulatory demands would increasingly demand greater rigour and transparency in GHG reporting. • Repsol therefore uses ISO 14064 to verify installations for all GHGs.

The Limitations of the Existing Systems • Emissions • Climate Risks • Emission Reductions • Response to Risks • Accurate data • Impact of Risks to Organisational Viability NOR • Complete picture • Other Indirect Emissions • Global reduction of emissions• Results in a Decrease in emissions in developed countries - Annex I parties reduced aggregate emissionsby 3.3% between 1990 and 2004, despite a growth in GDP of 36.2%. (Source UNFCCC)• And an increase in emissions globally - Global GHG emissions grew by 39% between 1990 and 2008.(Source Le Quere C)• i.e. an export of emissions generating activities - 30% of consumption-based emissions were importedin Switzerland, UK & France and 22% produced in China were exported.

What the Future May Bring1. Greater consistency of emissions trading scheme monitoring, reporting and verification requirements2. Greater facility for global trade, but potentially with exchange rates3. Greater accountability for climate change risks and adaptation4. Moves towards accounting for emissions generated as a result of demand/consumption

For more information, please contact:Madlen KingGlobal Head of Climate Change and SustainabilityLloyd’s Register Quality Assurance LimitedHiramford, Middlemarch Office VillageSiskin Drive, Coventry CV3 4FJ, United KingdomT +44 (0)20 7688 2373E madlen.king@lr.orgw www.lrqa.co.ukServices are provided by LRQA and other members of the Lloyd’sRegister Group. For further information visit www.lr.org/entities

BQF Carbon Reporting LRQA

by LRQA SlideShare on Jun 21, 2012

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