In this article, let's explore some more concepts of the process involved in a GHG Project, the concept of ESG within organizations and also an overview of ISO 14065 e 14066 that complement the GHG Protocol.
The concepts of Confidence Level and Materiality
The trust level is the degree of credibility that stakeholders require from a verification process. It is used to determine the depth of detail a verifier projects into their verification plan, the existence of errors, material omissions or misstatements. There are two levels of trust, which result in different verification statements:
- Reasonable Confidence: Statements of reasonable confidence are typically worded positively; the verification body provides reasonable confidence that a GHG emissions report is materially correct, is a fair representation of GHG data and information and has been prepared in accordance with EPB. An opinion of reasonable confidence is generally understood to be one that generates the highest possible degree of reliability.
- Limited Trust: Limited reliance statements are typically worded negatively; the verification body declares that there is no evidence that the GHG emissions report is not materially correct, is not a fair representation of GHG data and information and has not been prepared in accordance with EPB. Results with limited confidence give less credibility to reported data than results with reasonable confidence.
OVs use the concept of materiality to determine whether omitted or distorted GHG emissions information could cause a material deviation from an OI's emissions information., thus influencing the conclusions or decisions made by stakeholders based on this information.
Material diversion: An error is considered material if the total magnitude of calculation errors in an organization's GHG emissions report changes the emissions reported in the scope 1 or in scope 2 in 5% or more, more or less.
The Brazilian Program defines the quantitative limit of materiality in 5% (both for more and for less) of the scope 1 and the scope 2 of the organization's inventory, separately. An organization's emissions for each scope must be considered accurate (within the limit of 5%) so that a verification body can issue a positive verification statement for the OI.
The Main Verification Activities
Assessment of compliance with Brazilian Program Specifications (EPB): OVs must determine whether the EPB has been followed. For so much, should refer to the EPB and take into account the following:
- The completeness of the emissions report;
- The principles of accounting and developing inventories;
- Inventory limits: geographical, organizational and operational;
- The adequacy of the processes for identifying sources of emissions and collecting data;
- The appropriate use of simplified methods for estimating emissions.
Assessment of activity and GHG data
The OV must start evaluating the GHG data by obtaining evidence, whether to compare them to inputs to control systems and verify emissions estimates, whether to ensure that established procedures were followed. The specific clues to be obtained can, normally, be classified into three categories:
a) Physical clues, which can be obtained through direct observation of equipment (for example, fuel gauges and calibration equipment during facility visits);
b) Documentary evidence (for example, control and procedure manuals, invoices, log books, laboratory test results etc.); e
c) Testimonial evidence, obtained through interviews with the organization's team.
Checking results against verification criteria
Having evaluated the emissions calculations for the facilities and emission sources included in the sample, the OV must determine whether any material errors have been identified, consider whether these errors are systemic and compare these results with emissions at the organizational level. The verifier may analyze other sources of GHG emissions with similar characteristics and/or potential for the same distortions to determine whether the same inconsistency is evident in a broader data sample and may require the organization to provide evidence of correcting systemic errors..
If several non-material errors are found, the compilation of these errors must be compared to the originally reported emissions estimates to determine whether the aggregate errors exceed the materiality threshold. Differences can be classified as material or immaterial, depending on whether the errors represent more or less than 5% of total scope emissions 1 and scope 2, separately. When there are no material deviations (both qualitative and quantitative), the OV must declare that the OI report is in accordance with the EPB.
The Concept of ESG (Environmental, Social and Governance)
Aenvironmental governance, social and corporate (from English, Environmental, social, and corporate governance – ESG) is an approach that evaluates how a corporation incorporates social aspects into its decision-making process, Environmental and Governance. ESG is focused on reducing risks, specific and measurable actions and practices, linked to internal practices, what relates (but it is not the same) that Corporate Sustainability, more focused on broad opportunities for society, broader actions with long-term reach, linked to external practices and relations.
An example of ESG in business practice, is the recent incorporation of the need to include non-financial information related to sustainability in financial statements, in the new IFRS regulations(IFRS S1 e IFRS S2).
A variety of government organizations and financial institutions have developed ways to measure the extent to which a specific corporation is aligned with ESG goals., existing, inclusive, business software focused on this type of activity
The ISO Standards 14065 e 14066
These standards complement ABNT NBR ISO 14064 and were recently published in line with European environmental standards, but have not yet been fully translated and validated for ABNT NBR standards, So let's touch on some points that are already more common and used in the GHG Protocol standards and that expand to other areas.
ISO 14065 (Greenhouse Gases – Requirements for greenhouse gas validation and verification bodies for use in reconnaissance and other forms of recognition)
ISO 14066 (Greenhouse Gases – Greenhouse Gas Competency Requirements and Validation Teams / verification teams)
The Validation and Verification Body must:
a) to establish, implement and document a method to assess the competence of Validation/Verification Team Personnel against the requirements outlined in ISO 14065:2013, ISO 14066:2011 and this guidance; e
b) maintain records to demonstrate the competence of the Validation/Verification team and personnel in accordance with this guidance.
Environmental information is increasingly used for decision-making by individuals and organizations. Environmental information can be viewed in several ways, including, but not limited to:
- greenhouse gas statements;
- environmental footprints (for example, carbon and water);
- environmental performance;
- environmental labeling claims, including environmental product declarations;
- environmental information as part of sustainability reports;
- calculations associated with the valorization of environmental resources;
- environmental information related to “green bonds”, “climate finance” and other financial instruments.
Users of environmental information want to know that the information is accurate and reliable. They seek assurance in statements of historical information and validation that forecast information is based on reasonable assumptions and methods. These standards identify principles and define requirements for validation and verification bodies that meet these needs..
Audit planning
In addition to sampling plan requirements, validation and verification stated in ISO 14065:2013 and ISO 14064-3:2006, and team VV (Validation and Verification) You should include and document the following in your planning process:
a. Sampling plan – The sampling plan must include an assessment of all sources of uncertainty measured and assessment of the uncertainty of the estimate of emission reductions. The risk assessment used to develop the sampling plan must clearly document the risk (inherent, the control, detection) for each element of the project and how the sampling plan was developed to address the(s) amazon(s) and types of risk. The sampling plan must be the document by which the(s) member(s) of the validation/verification team are responsible for evaluating each element of the project.
b. Validation plan – Validation plans must include a detailed list of program components that will be evaluated and will include an assessment of the processes and systems designed to support the development of the ERPD. The validation schedule should reflect the estimated time required to complete the sampling plan.
c. Verification plan – The verification plan must include a detailed list of program components that will be evaluated, including the estimation of uncertainty and the propagation of uncertainty through ER estimates. The verification schedule should reflect the estimated time required to complete the sampling plan.
Changes to sampling and validation/verification plans, including justification for the change must be documented. All versions (for example, original approved plan and any revisions) must be saved as different versions. The final version of the plans will be documentary in nature and will be revised to reflect the process at completion of validation or verification.
For more information see the website of Brazilian program, and also more publications on here e on here.