A guide to assuring greenhouse gas emissions

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Key Points

  • The Institute has released its sixth audit committee guide on the benefits of assuring greenhouse gas (GHG) emissions
  • With various monetary penalties and benefits being introduced around the world that are linked to reported GHG emissions, obtaining assurance is becoming increasingly important
  • This is a guide for directors on what to consider in relation to assurance and is also useful for practices that provide assurance or advisory services.

The carbon market is growing, heightening the focus on organisations’ reporting and assurance of greenhouse gas (GHG) emissions. A government study on Australian companies’ reporting of GHG emissions found that in 2009–2010 nearly 75% of reports contained misstatements, with significant errors in 17% of reports.

With this in mind, the Institute has released a new guide, The benefits of assuring greenhouse gas emissions: Why it is important and how to get the most value from it.

It is intended to assist directors in understanding the factors to consider when deciding on and assessing the value of assurance for reported GHG emissions.

Institute Head of Business Policy and Sustainability Karen McWilliams FCA says the past few years have seen an increased focus on GHG emissions reporting.

‘Globally we’ve seen the introduction of emissions trading schemes and reporting mechanisms, increasing the importance of integrity in an organisation’s reporting of GHG emissions. In Australia, the federal government’s Direct Action Plan could provide monetary benefits or penalties to organisations depending on their emissions levels.

‘This is a useful guide to help directors consider what to look for in relation to assurance. It also includes a timeline of legislative developments in GHG emissions reporting,’ she says.

The guidance covers:

  • The drivers for assuring GHG emissions
  • Who carries out GHG emissions assurance
  • If assurance is already carried out, is it valuable?

This is the sixth guide in the Institute’s audit committee series, developed as plain English guidance for the director community on a range of business issues. This guide is also useful for practices that provide assurance or advisory services.

Article last updated 19 February 2014

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