Learning Outcomes 

By the end of this lesson, you should be able to:

• Be able to make an effective plan for monitoring and reporting your emissions​
• Be able to plan evidence-based activities, and be able to identify the sources of information and type of testing to use​
• Understand the framework for carrying out a carbon audit​
• Be able to carry out successful data collection on site for the emissions report​
• Be able to review the scope and boundaries of carbon reporting

Video Duration: 25 minutes approximately

Lesson Notes 

Planning​

Strategic analysis: Will ensure that you have a clear understanding of the activities, structure and complexities of the organisation​

Risk assessment: Helps to identify where errors of a material nature may be likely to occur or where nonconformance of the criteria is likely​

Planning evidence gathering: The level of evidence required depends on the potential impact of the emissions source on the overall inventory

Understanding the Organisation​

 

Risk Assessment​

Considerations:​

• Relative effect of each emissions source on overall GHG emissions​
• Whether there are any significant emissions that appear unusual​
• Any changes from prior periods​
• Likelihood of non-compliance with applicable laws and regulations​
• Any significant economic or regulatory changes​
• Selection, quality and sources of GHG data
• Level of detail of the available documentation​
• Nature and complexity of quantification methods​
• Any significant estimates and the data on which they are based​
• Any controls used to monitor and report of GHG data

What could possible go wrong?

• Intentional misstatement
• Omissions of a significant emission source
• Subjectivity in quantification of emissions
• Complexity in determining organisational boundaries
• Whether related parties are involved
• Limited capability of personnel
• Data management information system/controls

Documenting Risks​

Gathering Evidence​

Sources to check:

• Tertiary review of small sources
• Secondary review of medium sources
• Primary review of largest sources e.g. 70% of inventory

Plan to do more review when:​

• Emissions sources are large in the context of the inventory​
• Identified risk is poor​
• Data controls are poor

Evidence gathering plan:

• Based on the results of risk assessment
• designed to reduce the risk to an acceptable level
• Specifies the type and extent of evidence gathering activities
• Is not shared with the client

Types of Testing​

Analytical testing:​

• Will the analytical test reduce the risk?​
• How reliable is the data?​
• Will the testing identify material misstatements?​

Control testing:​

• Test the effectiveness of controls​
• Do identified deviations affect the reliability of controls?​

Estimate testing:​

• Is the estimate methodology appropriate?​
• Are inherent assumptions reasonable?​
• How good is the data used in the estimate?

Carrying out the Emissions Inventory

Types of Evidence​:

• Observation​
• Inquiry​
• Computation​
• Physical inspection

Audit Evidence:

• Client data used to develop the inventory
• Supplier data
• Financial systems (e.g. GL)
• Conversations with relevant staff
• Site visits
• Data information or system information

Sampling

• Must be:​
  • Representative​
  • Sufficient​
• Sample size must reflect risk assessment

Is the Evidence Sufficient?​

Factors that influence sufficiency of evidence include:​

• Materiality (the more material an item, the more evidence is gathered)​
• Verifier risk assessment (the greater the assessed risk, the more evidence that is required)​
• Audit objective (the level of evidence to be assessed depends on the audit objective)

Reductions and Removals​

Things to check if you have removals in your inventory:​

• If they are owned by the organisation, or have operational control​
• If the organisation has the right to report them​
• If the rights of removals have been on sold

Site Visits​

• Purpose and what to look for:​
  • Gain an understanding of the activities undertaken​
  • Identify sites that might contribute to an increased risk of material error​
  • Emissions sources that may have been omitted (e.g. LPG or diesel tanks used for back up energy)​
  • Assets such as company cars, large cooling systems​
  • Opportunities to improve data collection​
• A site visit is not needed in a surveillance year if there have been no operational or boundary changes

Conclusion

• How to systematically analyse and understand the organisation​
• How to conduct and document a risk assessment, and things to look out for​
• How to gather evidence, and take a representative sample size​
  • Observation, inquiry, computation, physical inspection are all methods of evidence gathering​
• How to conduct a successful site visit, things to look out for​
• Reporting removals