Navigating the world of carbon assurance and greenhouse gas (GHG) inventories can be a complex task for any organization. However, with the guidance and expertise provided by Schellman, a trusted leader in assurance and auditing, preparing for a smooth GHG assurance becomes a manageable and essential endeavor.
In this article, we will explore how to prepare effectively for a GHG Assurance, shedding light on the crucial steps and insights that Schellman offers its clients in the process.
What's the Difference Between a GHG Audit, Verification, and Assurance?
A GHG audit results in a GHG inventory. It finds emissions sources and converts them to GHG emissions according to the Greenhouse Gas Protocol. It is normally conducted as an internal audit by a company or a consultant to prepare a report of an organization’s GHG emissions, whether direct or indirect.
GHG verification is the process under which a firm like Schellman confirms that the GHG inventory represents a true and accurate representation of the organization’s GHG emissions.
GHG assurance is the result of the verification process. It provides an external-facing opinion on the GHG inventory, typically through a publishable assurance statement.
Why Do You Need GHG Assurance?
Before getting into the preparation process, it's vital to understand the purpose of GHG assurance.
A GHG assurance is the result of a rigorous evaluation of a company's GHG emissions inventory. When conducted by a third party like Schellman, the aim is to provide a third-party opinion that the inventory is accurate, reliable, and adheres to recognized reporting standards and guidelines, such as the GHG Protocol.
Moreover, GHG assurance enhances accountability and transparency, instilling confidence in stakeholders, both internal and external, about the organization's commitment to managing and reducing its GHG emissions.
What to Expect from Third-Party GHG Assurance
Third-party GHG verifiers adhere to recognized standards such as ISO 14064, ISAE 3000, and ISAE 3410. These standards, while varying in requirements, follow a similar process:
- Planning: Collaboratively, the verifier and the client define the scope and objectives of the verification. A comprehensive plan is developed, outlining activities and timelines.
- Data Collection and Analysis: The verifier meticulously collects and analyzes data from the client's GHG inventory, ensuring accuracy and compliance with recognized standards.
- Report Preparation: The verifier compiles a GHG Verification Report and a, documenting the verification results, findings, and recommendations for improvement.
- Assurance: The verifier issues a publishable assurance statement summarizing the approach taken to reach an agreed level of assurance.
How to Prepare for Third-Party GHG Verification
Efficient preparation is key to a successful GHG verification. Here are three key steps to facilitate the process:
- Gather and Organize Data: Ensure easy access to underlying data sources, such as utility bills or fuel receipts, and keep them well-organized for timely responses to verifier requests.
- Develop a GHG Inventory Plan: Create a methodology document outlining inventory steps, data sources, estimation methods, and decision details.
- Conduct an Internal Audit: Review your GHG inventory comprehensively before the external verification to identify and correct common errors.
Using our thorough approach and deep understanding of recognized standards, we'll provide you with a streamlined and organized verification experience that will ensure you can confidently prepare for and undergo your GHG verification which will empower you to make a meaningful impact on reducing emissions while maintaining transparency and accountability.
Common Issues in GHG Emissions Verification
During a GHG verification, verifiers maintain an "issues log" documenting findings, which typically fall into four categories:
- Material Misstatements: These findings indicate significant errors or inconsistencies with recognized frameworks, necessitating corrective action.
- Nonconformities: Findings that indicate that criteria are not complied with, or there is insufficient evidence of implementation.
- Request for Clarification: Often stemming from a lack of understanding of the organization's model or industry, these findings require clarification and justification.
- Future Improvement: These non-material findings raise awareness of issues that could align more closely with recognized standards.
Material misstatements and nonconformities are findings that are broadly unintentional, and a root cause analysis often leads to an insufficient understanding of the criteria. Lack of documentation is another common issue, but this is typically categorized under Request for Clarification.
As a future improvement opportunity, many companies can do better in selecting material categories for their inventories. Inventories that are limited to Scope 1 and Scope 2 will become less credible and it’s recommended that companies prepare to justify their category selections.
Next Steps for Your GHG Assurance
Whether you are measuring your GHG emissions because a client requests it, or if you will be subject to emerging regulations, both the verification process and the resulting assurance opinion have clear business benefits. Going through verification with Schellman allows you to understand key elements that will help you define more precise and meaningful carbon reduction targets among other benefits.
The GHG Assurance Statement issued by Schellman also carries the credibility of a robust check on the accuracy and reliability of your carbon reporting to all stakeholders. It’s a critical validation of your efforts and quantifiably increases your ESG rating scores.
Interested in learning more? Contact us today!
About AVANI DESAI
Avani Desai is the CEO at Schellman. Avani has more than 15 years of experience in IT attestation, risk management, compliance and privacy. Avani’s primary focus is on emerging healthcare issues and privacy concerns for organizations. Named as one of the 2017 Global Leaders in Consulting by Consulting Magazine she has also been featured and published in the ISSA Journal, ITSP Magazine, ISACA Journal, Information Security Buzz, Healthcare Tech Outlook, and many more. Avani also sits on the board of Catalist, a not for profit that empowers women by supporting the creation, development and expansion of collective giving through informed grantmaking. In addition, she is co-chair of 100 Women Strong, a female only venture philanthropic fund to solve problems related to women and children in the community.