Sustainability reporting & GHG reductions: the verification gap

This is the first in series of three articles discussing the findings and implications of a survey of corporate sustainability, climate change, and environmental management professionals in North America that was conducted by Nima Hunter Inc., with support from the sustainability and environmental services consulting firms Cameron-Cole, LLC. and WSource Group, LLC. This article discusses the implications of a significant gap identified between greenhouse gas (GHG) emissions reporting and GHG emissions verification. The goal of the survey was to assess the current state of sustainability, energy efficiency and GHG reporting and to identify trends associated with GHG management and GHG inventory verification in North America.

Perceptions of risk in a warming world have increased calls for reporting of corporate sustainability performance, climate risk and greenhouse gas management performance. As a result, insurers, investors, regulators and supply-chain managers are not only increasingly “doing the math” attributable to climate change, they also are looking for more assurance that GHG emissions levels, emission-reduction targets and other sustainability data are accurate and reliable. Accurate GHG emissions data plays a crucial role in identifying opportunities for energy reduction and energy-efficiency cost savings, planning for exposure to climate-related operational supply-chain and brand image risks, as well as long-term costs such as potential taxes on emissions.

Nima Hunter Inc.’s survey of sustainability and environmental professionals in North America (download here) was completed in February by 130 respondents from more than 20 industry sectors, with half representing companies operating in carbon-intensive sectors, including oil and gas extraction, utilities, manufacturing, mining and quarrying.

In keeping with the growing demand for sustainability and GHG reporting, the survey found that 80 percent of the organizations reported GHG emissions. Also in keeping with growing interest in energy reduction and energy-efficiency cost savings, the survey found that 89 percent of respondents have implemented energy-efficiency projects and 76 percent percent of the responding organizations reported that they have established GHG emission reduction goals. However, only 51 percent of the GHG emissions inventory reports were verified, meaning that up to 25 percent of the responding companies are basing reduction targets on unverified GHG emissions totals. (See figure below.)

Next page: Why verify your GHG emissions?

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