Third Party verification of GhG Emissions The benefits of international standards

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Third Party verification of GhG EmissionsThe
benefits of international standards

• Milan - March 1, 2002
• Laurent Segalen

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Before the GhG Protocol

• International GhG transaction needs international
  standards
• Difficulties in auditing of GHG emissions
• absence of generally accepted accounting and
  reporting international standards
• Numerous different methodologies developed
  in-house
• considerable audit risk due to inconsistencies
• Audit / verification of GHG gases requires
• analysis and assessment of the company's
  individual methodology.

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GHG Protocol is internationally recognised

• GHG Protocol is
• a global framework
• been developed, since 1999, by a unique
  multi-stakeholder partnership
• GHG Protocol has been endorsed by US EPA and
  European Union
• GHG Protocol has become the international
  standards

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GHG Protocol improves the audit process and gives
confidence to markets

• Common standard benefits
• improving data quality
• streamlined audit process
• cost effective for both verifiers and business.
• Common standard help mitigate risks
• lower risk of misstatement due to standardised
  methodologies
• guidance now available on some challenging
  accounting issues such as organisational and
  operational boundaries, measurement and
  calculation of emissions.

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PwC experience in verification at the service of
the GhGProtocol

• PwC consistent policy to assist any communities
  in building robust accounting standards. (IASB
  International Accounting Standard Board)
• PwC jointly with major clients such as Shell, has
  been developing auditing methodologies and
  standards since the early 90's
• PwC now in fourth year of collaboration with
  WRI/WBCSD
• In 2001, PwC has been named "core advisor" to the
  GhGProtocol

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PwC approach to audit GhG Emission (excerpt from
UK DEFRA)
Exclude sources if no man. control
Emissions data for 1998-2000
Confirm scope of gases
Exclude sources under threshold
10,000 tonnes CO2e or 1 (whichever is less)
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Next steps

• Accreditation PwC plans to be accredited
• towards EU trading scheme
• World Bank ERUPT
• PwC has applied for being named Operational
  Entity under UNFCCC
• Continuous work with GhGProtocol
• Continuous work on improving data quality and
  inventory effectiveness with leading clients

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Conclusion

• GhG Protocol is based on Best Practises of
  Financial Reporting
• Need a dual expertise to audit verify
  emissions
• technical and environmental skills
• accounting and financial skills
• CO2 allowances and credits will be accounted for
  in Financial Statements
• GhG accounting has more to do with Financial
  accounting than with Sustainability Reporting
• GhG Audit methodology not different from
  Financial auditing

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Europelaurent.segalen_at_fr.pwcglobal.com Italy
emanuele.seva_at_it.pwcglobal.comgiancarlo.pireddu_at_i
t.pwcglobal.comwww.climatechangeservices.com
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