How do Big Corporates Report Green House Gas Emissions?

The Ethical Corporation Institute in the UK has launched a report assessing how big corporates report Green House Gas (GHG) Emissions – and found a great deal of inconsistency.

Called "Corporate Greenhouse Gas Emissions Reporting 2008," the report offers insights into how leading brands report their emissions.

The report says although there are a number of organisations striving to advance the current state of corporate greenhouse gas (GHG) emissions reporting, there is still a great deal of inconsistency and therefore a lack of comparability between corporations’ reports on their GHG emissions and emissions-reduction targets.

There are a total of 34 protocols and guidelines for reporting emissions in the responses of FT500 companies to the 5th Carbon Disclosure Project request (CDP5), of which the most widely used is the WBCSD//WRI GHG Protocol.

As anticipated, the GHG Protocol is by far the guideline most commonly-used by companies in measuring their emissions but the region in which a company is headquartered seems to have the strongest influence on selection of the guidelines used to measure GHG emissions.

It says there is no correlation between the use of general, cross-industry reporting guidelines (e.g. the GHG Protocol and the IPCC guidelines) and industry sectors.

Just over half of the companies using standards verify them, and less than half of the companies using the GHG Protocol have their emissions data externally verified.

Estimated costs of collecting data and calculating GHG Protocol Scope 1 GHG emissions for the companies questioned varied between €75,000 and €800,000. The lowest and highest verification costs were €50,000 and €500,000 respectively.

The majority of the companies in the research sample report both emissions intensity and absolute emissions. There is a great deal of variation in the nature of emissions-intensity indicators used by companies. While in some sectors there is a strong tendency for companies to use the same emissions-intensity indicators, there are industry sectors in which there is definitely scope for harmonising the indicators used.

All investors surveyed about emission reporting suggested that the current standards available to companies are inadequate. Suggestions given as to what would improve corporate emissions-reporting standards included a greater link between carbon-performance reporting and financials.

Twice as many companies report having set an absolute emissions reduction target as report setting an emissions intensity reduction target. There is considerable inconsistency in the way in which companies report their targets.

In general, timeframes for absolute emissions reductions are set for 5-20 years. Only five companies set reduction timeframes over 20 years.

Australia, Canada, and the UK are the only countries in which it is or will soon be mandatory for companies with emissions levels over a certain threshold (or meeting other specific criteria) to report on their emissions. China, India, and South Afica do not currently have central schemes encouraging companies to report on their emissions.

The conclusions of this report include that:
– National governments appear to have an influence on how companies report on their GHG emissions, even when reporting is not mandatory.
– There is a need for increased scrutiny and standardisation of the extent to which companies comply with specific protocols and guidelines.
– There is a lack of benchmarks for assessing individual corporations’ targets and their performance in meeting them.

For more information go to http://www.ethicalcorporationinstitute.com/reports/ghgreporting/overview.asp