Climate Change Verification Comes Of Age: ISO 14064

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Courtesy of SGS North America Inc

Since the mid 90’s SGS has been providing Greenhouse Gas Verification services for our clients, and now, with the rise in prominence of Climate Change and the release of ISO 14064, this service is coming into its prime. SGS is accredited for, and active in, all the credible schemes around the globe. From Kyoto Projects to the EU Emissions Trading Scheme, from the California Climate Action Registry to the Chicago Climate Exchange.

With foresight, SGS recognized the importance of greenhouse gas (GHG) verification to our client base and set about developing scientifically based audit protocols to meet these needs.  As its central tenet, the SGS Climate Change Program supports market based and therefore business friendly solutions to the climate issue. To this end our efforts have sought to standardize the rigor applied to GHG verification, such that a verified ton of CO2 or CO2 equivalent anywhere in the world is the same as any other. This is the basis of a functioning commodities market and must be realized in order for carbon trading to be effective, the preferred option for all our customers that have expressed an opinion.  Until now organizations, projects and programs have been exposed to multiple sets of criteria and requirements in relation to GHG’s.

ISO 14064 – what is it?
ISO 14064 is provides an umbrella standard that is of special importance for the emerging voluntary approaches to GHG declarations by companies. Parts one and two of the standard define a standardized approach to GHG measuring and monitoring at the organizational and project levels respectively. Part three of the standard provides guidance on the validation and verification of GHG assertions. ISO 14064 was developed with the aim of being applicable across all the existing schemes, from the EU Emissions Trading Scheme to the Clean Development Mechanism under Kyoto. ISO 14064 is GHG program neutral, but if a program is applicable, requirements of that program are additional to the requirements of ISO 14064. It is important to note that where contradictions occur, the requirements of the program takes precedence. It is to be hoped that as GHG reporting and trading programs develop, and as more legislation is passed, the ISO 14064 standards will be widely utilized. 

However, as it is only providing an umbrella, the application of ISO 14064 relies in many instances on detail provided by the underlying scheme/regulation or individual company’s approaches. One example is the quantification methodologies for the calculation or measurement of GHG activity data. This includes the setting/calculation of, for example, net calorific value of fuel, emission factors, oxidation factors and density conversion factors. If no underlying scheme exists, the emitting installation has to develop its own methodology in accordance with the standard. In both cases it is the role of the Validator/Verifier to assure that the GHG assertions made are complete, accurate, consistent and without material discrepancies.

Increasing voluntary commitments to combat climate change
SGS observes that more and more companies that are not covered by mandatory regulation to measure and reduce their GHG emissions, want to take responsibility and commit voluntarily. Senior management is aware of the potential impact of a carbon constrained economy on their business. SGS is pleased that we now have a recognized standard that addresses Greenhouse Gas management, but we are also keenly aware that the process of management, measurement and monitoring is only half the story.  In this new business reality GHG emissions carry not only a liability but also a potential asset value.  We recognize that our customers need assurance that their assessments are accurate and the numbers and values in terms of CO2e tons can be trusted. 

SGS increases the credibility of your efforts
SGS Climate Change Program verification is designed to deliver the highest degree of certainty and increases credibility to your efforts.  Verifications utilize a scientifically based verification methodology, which draws on four fundamental skill sets;

• Management system auditing,
• Financial auditing principles,
• Technological expertise, 
• Knowledge of the local regulatory requirements.

In many cases our existing clients are seeking to protect their emissions reductions and efficiency actions and get recognition for these, ahead of expected legislative controls. Through Sarbanes Oxley the requirement to divulge environmental impacts is already on the SEC books and this applies particularly to GHG’s.  For others the future carbon markets presents opportunity. But whatever the rationale you cannot have confidence without third party verification. 

Of the hundreds of GHG verifications SGS has now undertaken, for sophisticated carbon players to novices and from small companies to multinationals, we have yet to find an emissions inventory to be without error.

Robert Dornau is Director of the SGS Climate Change Programme. From 2004-2005 Robert was independent carbon market consultant, clients included the Endesa Climate Initiative, the trading platform new values and the World Bank for which Robert worked as conference director of CARBON EXPO. Between 2001-2004 Robert was manager of the International Emissions Trading Association, IETA, gaining a broad understanding of all aspects of the carbon market. Before working for IETA he worked as Project Manager for Deutsche Börse Group. He has a Master’s Degree in economics from the University of Konstanz, Germany. Robert has several publications in refereed journals and participated in numerous conferences as speaker or chair.

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