This week we cover Compliance audit. An audit is an evaluation of a person, organisation, system, process, project or product. Audits traditionally assessed financial systems, but can now be used for environmental performance, with environmental audits.
The Australian Department of Climate Change issued a Draft National Carbon Offset Standard, 19 December 2008, along with a Discussion Paper. This is intended to apply to the cap and trade scheme proposed by the Australian Government. The draft standard covers calculating the greenhouse gas emissions associated with an organisation's activities, product or service. It also includes the general principles of acquisition and retirement of carbon offsets.
The draft standard is based on:
Procedures for domestic offsets are derived from the Clean Development Mechanism of the United Nations Framework Convention on Climate Change (UNFCCC).
The Standard comprises:
The calculation of the carbon footprint is based on the principles in the Greenhouse Gas Protocol:
The steps for calculating the greenhouse gas emissions for an organisation are designed to be consistent with the NGER Act.
The boundary of an organisation defines the activities that an organisation should include in its carbon footprint calculation. This includes all corporate group members; and all facilities under the operational control of corporate group members.
Scope 1 and Scope 2 emissions are defined as in the 1996 IPCC (Intergovernmental Panel on Climate Change) Guidelines for National Greenhouse Inventories:
Scope 1 emission sources:
Scope 2 emissions sources: activities that generate electricity, heating, cooling or steam that is consumed by a facility but do not form part of the facility.
Scope 3 emissions are not defined in the draft standards and are not required to be included. Scope 3 emissions are indirect emissions caused by the organisation, such as from business travel.
The draft standards requires the use of Life Cycle Analysis (LCA) in accordance with ISO 14040, reporting:
scope;
system boundary;
greenhouse gas emissions sources within the system boundary;
greenhouse gas emissions factors and calculation methodology;
inventory analysis; and
calculated greenhouse gas emissions attributable to each stage of the life cycle of the product or service.
The draft standard cites the ISO 14064 series for verification and auditing and requires independent verification and review an entity accredited under ISO 14065.
Units accepted for carbon offsetting are:
Domestic abatement projects may also be applied.
A publicly available annual report is required, detailing: total greenhouse gas emissions generated, records of abatement and quantity and the type of credits purchased.
Organisations can make public statements, such as:
"The greenhouse gas emissions generated from this product have been calculated and offset in accordance with the National Carbon Offset Standard";
"We are committed to offsetting our carbon footprint consistent with the National Carbon Offset Standard"; and
"This offset meets the National Carbon Offset Standard".
The Australian Government issued an External Audit Consultation Paper (October 2008) on the development of external auditor regulations and guidelines for the Carbon Pollution Reduction Scheme. Third-party assurance providers are to be accredited. The Greenhouse and Energy Data Officer will monitor compliance, with powers to review audits of emissions up to four years after its submission, except in the case of fraud, where the period would be unlimited.
Organisations with emissions of 125 kilotonnes of CO2-e or more would be obliged to have their annual emissions report independently assured prior to submission.
It is likely that a multi-disciplinary team with individuals from different professions, including ICT, would be appointed by the organisation or the regulator. The team would include a ‘lead auditor’ and ‘technical’ staff with skills and experience in financial accounting/auditing, engineering and science, including ICT.
The consultation paper points out that accreditation against ISO 14065:2007 is not directly suited to the needs of the NGER Act or the Carbon Pollution Reduction Scheme. However, ISO accreditation could support an individual’s claims to be an external auditor.
The GHG Protocol Corporate Standard provides guidance on the entire inventory development process. The standard covers: GHG Accounting and Reporting Principles, Business Goals and Inventory Design, Setting Organizational Boundaries, Setting Operational Boundaries, Tracking Emissions Over Time, Identifying and Calculating GHG Emissions, Managing Inventory Quality, Accounting for GHG Reductions, Reporting GHG Emissions, Verification of GHG Emissions, and Setting GHG Targets.
The standard details the internal processes needed and preparing for an independent verifier (auditor). The information needed by an auditor are similar to that detailed in the Australian Draft National Carbon Offset Standard. This is information about the company activities, GHG emissions and company structure, assurance processes, data used for calculating GHG emissions and quality control procedures.
GHG provide sector and industry-specific toolkits for calculating greenhouse gas emissions. No toolkit is provided for ICT based industries, apart from semiconductor manufacture. However, a toolkit is provided for offices and the service-sector and for use by small office-based organisations: "Working 9 to 5 on Climate Change".
Three researchers from NTT have carried out an environmental impact assessment of fibre optic and wireless broadband and claim CO2e emmissions reduction of 46% (wired) and 79% (wireless) per subscriber per year. ICT is assumed to reduce the environmental load by making the movement of people and things more efficient and replacing physical media, such as paper and compact discs with online transmission. The researchers then calculated the energy consumed by the network to replace physical goods.
The researchers carried out their calculations for NTT's B-FLET optical fiber service and FOMA mobile communication service (provided by NTT DoCoMo). The total reduction in CO2 emissions of all users in 2005 was calculated to be 3.14 million tons.
The amount of CO2 emitted in the acquisition of raw materials, manufacture, use, and disposal were calculated. Users were surveyed as to their use of the internet services. ICT services and actions were classified into nineteen categories and thier energy use evaluated.
Daily Internet usage time for the optic fibre service was estimated at 27.53 minutes per person per day and 36.54 minutes per person per day for the wireless service.
An example of the energy use estimates is a music-downloading service. The energy used by the data centre holding the music, the network and the terminal the user uses much be considered. The corresponding purchase of CDs at a retail store involves CO2 emissions from CD manufacture, distribution, and disposal, as well as the purchaser's trip to the store.
However, for wired services it was information services, including government web pages and social networking which were found to have the largest environmental savings, not e-commerce. 79% (120 kg-CO2/year). For wireless service it was telephone, videophone, email, and accessing national and local government information which had the greatest effect. It should be noted that NTT included voice telephone calls as a broadband service, although it could be argued that a non-broadband, or even analogue phone service would give similar results.
Now read
Which activities are in Scope?: Which activities of your organisation produce Scope 1, 2 or 3 greenhouse gas emission sources, as defined in the Draft National Carbon Offset Standard.
Five principles for calculating a carbon footprint: The five principles in the Greenhouse Gas Protocol for calculating a carbon footprint are: Relevance, Completeness, Consistency, Transparency, and Accuracy. How would you suggest using ICT to assist your organisation convince an independent auditor that these principles has been complied with?
Does broadband reduce carbon emissions?: Three researchers from NTT have claimed CO2e emissions reductions from the use of broadband of 46% (wired) and 79% (wireless) per subscriber per year. They include savings from the use of email in place of paper mail and music downloads instead of buying CDs from a store. How would you use the Draft National Carbon Offset Standard to show this actually reduced emissions?