Global expectations for carbon reporting
On December 12, 2015, 196 nations represented at the 21st United Nations Framework Convention on Climate Change (UNFCCC) Conference of Parties (COP21) in Paris, gave their support to what is now known as the ‘Paris Agreement’.
The Paris Agreement has 5 key elements which are centred on the monitoring, recording, and reduction of greenhouse gas emissions. The Agreement promotes:
A long term goal for emission reductions;
Access to climate finance for those countries most impacted by climate change such as small island developing states (SIDS);
Adaptation measures for those countries which are most vulnerable;
Developed countries setting, reviewing and reporting on emissions targets every five years; and
Improved transparency around reporting of emission generation.
To achieve the targets set in Paris, countries, the private sector, and civil society will need to work together to design and implement clean energy technologies in all aspects of the economy.
Companies contributing to the COP21 dialogue have committed to changing their reporting processes to include climate related data, to work responsibly with climate relevant policies, and commit to reductions in greenhouse gas emissions.
What does this mean for EarthCheck clients?
To achieve the required reduction in emissions put forward by COP21, countries will be looking to reduce or eliminate fossil fuel use, moving to alternatives such as solar and wind. Countries will be looking to their partners in the private sector to do the same. They will also be asking for companies to provide data on what they produce annually. Countries will sign on to providing reports to the UNFCCC every five years on national emission generation.
As tourism is a contributor to global emissions, there is every chance that your business or group (sooner or later) will be asked to provide evidence of your own carbon footprint.
EarthCheck has for many years offered our members the opportunity to track their greenhouse gas emissions as part of our science based approach to sustainability certification. Members using EarthCheck can monitor Scope 1, 2 and 3 emissions in what is now regarded as one of world’s leading cloud based online measurement tools.
The carbon reporting methodology used in EarthCheck’s Company and Destination Standards complies with the Intergovernmental Panel for Climate Change (IPCC) Guidelines for National Greenhouse Gas Inventories, the World Business Council for Sustainable Development (WBCSD) Greenhouse Gas Protocol, the International Organisation for Standardization (ISO) 14064 range of standards for greenhouse gas accounting, the Carbon Disclosure Project (CDP) and the HCMI.
Key points from COP21 relevant to your business
In simple terms the COP21 Paris Agreement is driving a focus on four key areas:
Technology innovation – achieving the 2 degree goal will require a total transformation of global power production, transport and industrial processes over the next few decades. This has provided a huge signal to business that the low-carbon revolution has begun.
Capacity building – the transfer of knowledge and skills to your staff on climate related opportunities is paramount to the shared responsibility in tackling climate change and ensuring all companies are on a robust, low carbon pathway.
Risk and compliance - COP21 and the many government and industry sponsored programs are likely to result in increased investor scrutiny of companies current reporting standards, the quality and accuracy of data collected and the broader risks associated with ‘green wash’.
Industry Leadership – Significantly, 450 CEOs from 65 countries have committed to set targets, report on progress and work with policymakers to drive climate action in pursuit of more ambitious Nationally Determined Contributions.
Other Government and Industry based carbon reporting programs to watch out for
HCMI (Hotel Carbon Measurement Initiative) - This methodology was recently developed by the International Tourism Partnership (ITP). Scope 1 and 2 emissions are included however ‘Scope 3 emissions’ (referred to in the GHG Protocol)as coming from activities such as travel (guests’ travel to and from the hotel and employees’ business travel), production of purchased materials and consumables in the hotel, waste disposal, product use, and other outsourced activities (except laundry) are excluded from the calculations.The EarthCheck Programmes allow calculation and inclusion of Scope 1, 2 and 3 emissions. EarthCheck, unlike HCMI, also includes the intensity measure of a guest night within its reporting.
What Government reporting expectations you can expect to see more of?
The European Union Energy Efficiency Directive has established a set of binding measures to help the EU reach its 20% energy efficiency target by 2020. To accomplish this target a new law on energy services specifies obligatory and regular energy audits (at least every 4 years) for all businesses that are not deemed to be small or medium-sized enterprises (enterprises with more than 250 employees and an annual turnover of more than 50 million euros.)
The rules apply to businesses from all areas – from manufacturing through to hospitality businesses. Only companies which have either a certified energy management system (EnMS) according to ISO 50001 or an environmental management system according to EMAS are exempted from the rules. Fines for non-compliance vary from country to country but can be very high (i.e. 2% of annual turnover in France; or 50,000 Euro in Germany).
EarthCheck has mapped and aligned its reporting methodology to ISO 50001 and is helping our clients in Europe to meet these new reporting requirements. Expect to see other countries following suit in the next year.
In the Asia/Pacific, five regional stock exchanges have in the past twelve months commenced a consultation process to consider implementation of ESG (environment, social, and governance) reporting in their exchanges. One of these is the Singapore Stock Exchange (SGX). Singapore provided voluntary reporting guidelines in 2011. The recent work is focused on mandatory ESG reporting guidelines for the more than 800 listed companies. The SGX plans to implement the approved guidelines for sustainability reporting in 2018. EarthCheck will be working with SGX to ensure that our Standard is aligned to their new guidelines.
Want more information?
Inner Circle – EarthCheck’s annual R&D forum will be held on April 21st and 22nd in Bali, Indonesia. A dedicated session on carbon reporting and compliance to global reporting platforms will be provided by Professor Becken from Griffith University. Please mark Inner Circle on your April 2016 calendar.
Please feel free to reach out to us directly if you need clarification on any aspect of this update.
Image courtesy of carbonprotocol.org
Some additional sources for information: