ISO 14064 Series

GHG Accounting
Lead Verifier Program

TUV SUD South Asia Pvt. Ltd. | ISO 14064 Series GHG Lead Verifier Program Ed 2023 Rev 0 18 January 2023
Training Objectives
▪ Climate change and its implications on businesses
▪ Importance of Carbon Footprint management with reference to global regulations and requirements
▪ Concept of a GHGs’ and related terminology, the causes and effects of global warming, and become acquainted with
various worldwide initiatives, standards and frameworks.
▪ Understanding the various GHG frameworks and standards families, as well as their interrelationships.
▪ Understanding the principles and standards for planning, creating, managing, reporting, and verifying the carbon footprint
of an organization.
▪ Knowledge of the principles and standards for establishing baselines, monitoring, quantifying, and reporting project
emissions
▪ Demonstrating the ability and expertise to organize and perform verification of the organization's carbon footprint.
▪ Exercises and case studies

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Agenda

Introduction to Climate Change, Global Warming & GHG

Climate Action, Related Bodies & Regulations
Basics of GHG Accounting
GHG Protocol
Scope 3 Emissions in detail
Decision tree methodology for GHG calculation
ISO 14064 standards
GHG Report Verification

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Agenda

✓Introduction to Climate Change, Global Warming & GHG

✓Climate Action, Related Bodies & Regulations
✓Basics of GHG Accounting
✓GHG Protocol
✓Scope 3 Emissions in detail
✓Decision tree methodology for GHG calculation
✓ISO 14064 standards
✓GHG Report Verification

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World Economic Forum Survey Results

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WHAT IS CLIMATE CHANGE?

▪ Climate is the pattern of variation in temperature, wind,

precipitation and other meteorological variables in a given region
over long periods
▪ Climate change is the altered patterns of variation in those
variables...temperature is just one of those.
▪ Climate of the Earth is dynamic & continues to change through
the Earth’s natural processes such as oceanic processes and
variations in solar radiation
▪ United Nations defines Climate Change as long-term shifts in
temperatures and weather patterns. These shifts may be natural,
but since the 1800s, human activities have been the main driver
of climate change, primarily due to the burning of fossil fuels (like
coal, oil, and gas), which produces heat-trapping gases.

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THE FACTS OF GLOBAL WARMING

▪ Vanishing Glaciers
▪ Photos of Alaska Portage glacier in 1914 and 2004

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THE FACTS OF GLOBAL WARMING

Aral Sea (Source: Wikipedia) http://worldviewofglobalwarming.org/

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GREENHOUSE GASES

Greenhouse Gases are gaseous constituents of the atmosphere, both natural and anthropogenic, that absorb and emit radiation at
specific wavelengths within the spectrum of infrared radiation emitted by the Earth’s surface, the atmosphere and clouds.

The 7 major GHGs are:

▪ Carbon dioxide (CO2)
▪ Methane (CH4)
▪ Nitrous oxide (N2O)
▪ Hydrofluorocarbons (HFCs)
▪ Perfluorocarbons (PFCs)
▪ Sulphur hexafluoride (SF6)
Source: World Meteorological Organization
▪ Nitrogen trifluoride (NF3)
Source: https://www.nrdc.org/stories/greenhouse-effect-101

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GREENHOUSE EFFECT

▪ The greenhouse effect has supported life on the earth for millions of years. Today, however, the greenhouse effect is growing stronger
as human activities such as deforestation and fossil fuel use release more and more greenhouse gases into the atmosphere. This traps
greater amounts of the sun’s radiation, which contributes to rising temperatures, also known as global warming.

Source: https://world101.cfr.org/global-era-issues/climate-change/greenhouse-effect

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 Source: https://world101.cfr.org/global-era-issues/climate-change/greenhouse-effect

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Source: https://world101.cfr.org/global-era-issues/climate-change/greenhouse-effect

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 Source: https://world101.cfr.org/global-era-issues/climate-change/greenhouse-effect

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▪ To have a better than two-thirds chance of limiting
warming to less than 2°C from pre-industrial levels, the
total cumulative CO2 emissions since the start of the
industrial era would need to be limited to 1,000
gigatonnes of carbon. About half of this amount had
already been emitted by 2011.

Source: University of Cambridge Summary of IPCC AR5

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Agenda

✓Introduction to Climate Change, Global Warming & GHG

✓Climate Action, Related Bodies & Regulations
✓Basics of GHG Accounting
✓GHG Protocol
✓Scope 3 Emissions in detail
✓Decision tree methodology for GHG calculation
✓ISO 14064 standards
✓GHG Report Verification

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REALIZATION OF CLIMATE ACTION: BIRTH OF UNFCCC
▪ The idea of all countries on board led to the
formation of the United Nations Framework for
Climate Change Convention (UNFCCC, also
known as ‘The Convention’) in 1992, at the
Earth Summit in Rio de Janeiro.

▪ The convention divided the countries on the

basis of their differing commitments: Annex I
and II consisted of industrialized and developed
countries and Non-Annex I comprised
developing countries.

▪ The Conference of Parties (CoP) is the supreme

decision-making body at the convention and
comprises states that are party to it.

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REALIZATION OF CLIMATE ACTION: BIRTH OF UNFCCC
▪ COP 1:
At CoP1 in Berlin 1995, the Convention highlighted the
shortcomings of UNFCCC — the voluntary nature of the
agreement. It stressed how no substantive action was taken to
address the cause against climate change, which in turn put
forward the need for “legally binding” actions.

▪ COP 21:
In 2015, the Paris agreement was finally adopted and the INDCs
were annexed to it. It was agreed that the Paris agreement would
start from 2021.

2015 was known as a year of multilateral agreements because, in

addition to the Paris agreement, sustainable development goals
and Sendai Framework was also adopted. 2015, therefore, came
out to be a successful year.

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REALIZATION OF CLIMATE ACTION: BIRTH OF UNFCCC

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Nationally Determined Contributions (NDC)
■ The national pledges by countries to cut emissions are
voluntary.
■ The Paris Agreement requires all Parties to put forward their
best efforts through “nationally determined contributions”
(NDCs) and to strengthen these efforts in the years ahead.
■ This includes requirements that all Parties report regularly on
their emissions and on their implementation efforts.
■ In 2018, Parties will take stock of the collective efforts in
relation to progress towards the goal set in the Paris
Agreement.
■ There will also be a global stock take every 5 years to assess
the collective progress towards achieving the purpose of the
Agreement and to inform further individual actions by Parties.

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INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE (IPCC)
▪ Established by the United Nations Environment Programme (UNEP) and the World
Meteorological Organization (WMO)

▪ Scientific Body with 195 members countries:

a. reviews and assesses the most recent scientific, technical and socio- economic
information.
b. 1000’s of scientists contribute to work of IPCC
▪ Made up of 3 Working Groups and Task Force
a. WG I: The Physical Science Basis of Climate Change
b. WG II: Climate Change Impacts, Adaptation and Vulnerability
c. WG III: Mitigation of Climate Change
d. Task Force on National Greenhouse Gas Inventories
e. The IPCC is now in its sixth assessment cycle, in which the IPCC is producing the
Sixth Assessment Report (AR6) with contributions by its three Working Groups and
a Synthesis Report, three Special Reports, and a refinement to its latest
Methodology Report.
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Global Carbon Price

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EUROPEAN CBAM

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CAN WE REDUCE EMISSIONS AND STILL GROW?

▪ An emissions reduction strategy requires action on three fronts:

a) Raising energy efficiency to reduce the total energy requirement of GDP: This will help emissions to some extent,
but cannot eliminate them

b) Switching from fossil fuels to electricity wherever possible combined with generating electricity from
renewable sources. Electrification alone doesn’t help.

c) Removing emissions from the atmosphere. This can take care of unavoidable use of fossil fuel where
electrification is not possible.

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SCOPE FOR EMISSIONS REDUCTION IN INDIA
We reviewed several studies estimating the possibilities of decarbonization in India

▪ TERI/Shell (2021): Looks at the energy sector only and concludes that it is “possible but highly challenging” for the sector to become
net zero by 2050.

▪ IEA (2021): Shows that GDP growth of 5.4% plus a combination of efficiency gains and shift to RE can lead to net
zero by around 2065.

▪ BP (2020): Models 6% growth rate of GDP, and net zero by 2070.

▪ CEEW study (Chaturvedi and Malyan, under review): Presents alternative scenarios that are “technically feasible”. Assumes
GDP growth at 6.2% between 2020 and 2050 (slowing down thereafter). One of the simulations shows emissions peaking by
2040 and reaching net zero by 2070.

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CARBON PRICING MAKES RE MUCH MORE COMPETITIVE

150
US$/M

100
Solar + 25% storage Solar Wind
New range
WH

of coal LCOE
50

Upward shift due to $25/tonne-CO2 price

0
2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

▪ The recent G20 Finance Ministers meeting (where India participated) has endorsed carbon pricing.
▪ An IMF staff paper has proposed a carbon price floor of $75/tonne-CO2 for the US and EU, $50 for China and $25 for India.
▪ At $25/tonne-CO2, RE will be competitive with all coal-based power plants even today.
▪ Introducing carbon pricing on coal will justify accelerated retirement of coal plants. Petrol & diesel already have a high tax incidence and need not
require a carbon tax.

Source: IRENA 2021 for historical LCOE; Several sources for battery prices; Authors’ projections

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Agenda

✓Introduction to Climate Change, Global Warming & GHG

✓Climate Action, Related Bodies & Regulations
✓Basics of GHG Accounting
✓GHG Protocol
✓Scope 3 Emissions in detail
✓Decision tree methodology for GHG calculation
✓ISO 14064 standards
✓GHG Report Verification

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WHY GHG ACCOUNTING
▪ Monitoring & reporting of GHG emissions can be undertaken at different levels

✓ Countries: National Inventories

✓ Organisational: Corporate Inventories
✓ Single installations
✓ Products and services: Life cycle footprints
✓ Projects
✓ Buildings
✓ Events
✓ Individuals

▪ Regulated or voluntary reporting

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WHY GHG ACCOUNTING

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ORGANISATIONAL GHG INVENTORY

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PRODUCT CARBON FOOTPRINT

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PRODUCT CARBON FOOTPRINT

■ Measured in CO2e per unit of product

1.2 t CO2e/
tonne croissants

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PRODUCT CARBON FOOTPRINT

Source: http://images.apple.com/environment/reports/docs/iPad2_Product_Environmental_Report_2012.pdf accessed 25/9/12

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GHG PROJECTS

▪ Activity or set of activities intended to reduce GHG emissions, increase the storage of
carbon, or enhance GHG removals from the atmosphere

▪ Key Issues: Additionality, Permanance, Leakage

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CARBON NEUTRALITY
▪ ‘condition in which there is no net increase in the global emission of greenhouse gases associated with the subject’

MEASURE

REDUCE

OFFSET

DECLARE

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GHG REPORTING – VERIFICATION
▪ Provides credibility & assurance to GHG claims
▪ Requirement for some schemes
▪ Increase in demand in third party verification

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CARBON FOOTPRINT STRATEGY

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RELATIONSHIP AMONG THE ISO 14060 FAMILY OF GHG
STANDARDS

ISO 14064-1 - Specification with guidance

at the organizational level for quantification
and reporting of greenhouse gas emissions
and removals

Source: https://www.iso.org/obp/ui/#iso:std:iso:14064:-1:ed-2:v1:en

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GHG VERIFICATION AND ACCREDITATION

▪ Use ISO 14065 and ISO 14064-3 to verify against:

• Any GHG standard (e.g. PAS 2050)

• Any Methodology (e.g. company defined methodology)

• Schemes (e.g. Country Specific Schemes)

• Accredited/Non-accredited verification

▪ Accreditation
• Ensures consistency and quality of verification services

• SGS ISO14065 accreditation

• Sector / Scheme Accreditation

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GHG ORGANISATIONAL AND OPERATIONAL BOUNDARIES
▪ The following figure illustrates the organisational boundaries and operational boundaries for a
sample company
▪ Organisational Boundaries dependent on scheme/standard rules e.g.:
• ISO 14064-1/GHG Protocol - Corporate
• EU Emission Trading Scheme – Facility specific

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ORGANISATIONAL BOUNDARIES
▪ Approaches to setting boundaries under Corporate Inventory such as ISO 14064-1:
▪ Equity share approach
The organisation accounts for its portion of GHG emissions and/or removals from respective facilities according to its equity
share

▪ Control approach
The organisation accounts for all quantified GHG emissions and/or removals from facilities over which it has control

▪ Financial Control
▪ Operational Control

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OPERATIONAL BOUNDARIES

▪ Scopes 1 to 3 - commonly used classification in Carbon accounting

▪ Scope 1: Direct GHG emissions

From owned or operated activities

▪ Scope 2: Energy indirect GHG emissions

Purchased energy

▪ Scope 3: Other indirect GHG emissions

Other emissions related to activities of the organisation but not under their control

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GHG INVENTORY - SCOPE

▪ Scopes 1 to 3 - commonly used classification in Carbon accounting

▪ Scope 1: Direct GHG emissions

From owned or operated activities

▪ Scope 2: Energy indirect GHG emissions

Purchased energy

▪ Scope 3: Other indirect GHG emissions

Other emissions related to activities of the organisation but not under their control

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SCOPE – ORGANISATIONAL INVENTORY

▪ Scopes 1 to 3 - commonly used classification in Carbon accounting

▪ Scope 1: Direct GHG emissions

From owned or operated activities

▪ Scope 2: Energy indirect GHG emissions

Purchased energy

▪ Scope 3: Other indirect GHG emissions

Other emissions related to activities of the organisation but not under their control

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SCOPES – ORGANISATIONAL INVENTORY
Scope 3 – Other Indirect Emissions
Third Party Distribution
Packaging End of Life
Optional Employee Travel
Supplier’s Emissions Use of Product

Raw Materials
Scope 2 – Energy Indirect Emissions
Purchased Steam
Purchased Heat/Cooling
Purchased Electricity

Mandatory Scope 1 – Direct Emissions

Fuel – own Process Emissions

Fuel -
Fugitive transport
facilities

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SCOPES – PRODUCT FOOTPRINT
Scope 3 – Other Indirect Emissions
Third Party Distribution
Packaging End of Life
Employee Travel
Supplier’s Emissions Use of Product
Include
emissions Raw Materials
from all Scope 2 – Energy Indirect Emissions
scopes,
Purchased Steam
although Purchased Heat/Cooling
product Purchased Electricity
specific and
certain
Scope 1 – Direct Emissions
exclusions

Fuel – own Process Emissions

Fuel -
Fugitive transport
facilities

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SOURCES OF EMISSIONS
▪ Stationary combustion
Combustion of fuels in stationary equipment such as boilers, furnaces, burners, turbines, heaters, incinerators,
engines, flares, etc.
▪ Mobile combustion
Combustion of fuels in transportation devices such as automobiles, trucks, buses, trains, airplanes, boats, ships,
barges, vessels, etc.
▪ Process emissions
Emissions from physical or chemical processes such as CO2 from the calcination step in cement manufacturing,
CO2 from catalytic cracking in petrochemical processing, PFC emissions from aluminum smelting, etc.
▪ Fugitive emissions
Intentional and unintentional releases such as equipment leaks from joints, seals, packing, gaskets, as well as
fugitive emissions from coal piles, wastewater treatment, pits, cooling towers, gas processing facilities, etc.

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GHG GASES COVERED BY THE KYOTO PROTOCOL
▪ Carbon Dioxide (CO2) ▪ NF3 produced in the
▪ Methane (CH4) manufacture of
semiconductors and
▪ Nitrous Oxide (N2O) LCD (Liquid Crystal
Display) panels, and
▪ Sulphur hexafluoride (SF6)
certain types of solar
▪ Hydrofluorcarbon (HFCs) panels and chemical
lasers
▪ Perfluorocarbons (PFCs)
▪ Chlorofluorocarbons
▪ Note, Nitrogen Triflouride (NF3)
(CFCs) not included in
now required to be included in
the Kyoto Protocol as
national inventories by UNFCCC,
they were included in the
and GHG Protocol amended to
Montreal Protocol to
include this – may need to report
address depletion of the
depending on which standard
ozone layer
followed

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GLOBAL WARMING POTENTIAL
▪ Global warming potential
(GWP) is a measure of how GHGs GWPs
much a given mass of IPCC
IPCC TAR IPCC AR4
greenhouse gas is estimated to Origin SAR
(2001) (2007)
contribute to global warming. It is (1996)
a relative scale which CO2 1 1 1
compares the gas in question to CH4 21 23 25
that of the same mass of carbon N2 O 310 296 298
dioxide (whose GWP is by
convention equal to 1) HFCs 140~11,700 120 ~ 12,000 140 ~ 14,800

5,700 ~ 7,390 ~
▪ In GHG reporting, convert non- PFCs 7,000~9,200
11,900 17,200
CO2 gases to CO2 equivalent
SF6 23,900 22,200 22,800
(CO2e)

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QUANTIFICATION METHODOLOGIES
▪ Quantification methodologies can be classified into the following types
▪ Calculation based on
✓ GHG activity data multiplied by GHG emission or removal factors
✓ e.g. 1000 m3 of gasoline x 2.24 CO2 tonnes/m3
✓ the use of models
✓ Emissions of PFCi = (PFCi)(1-h)[(1-Ci)(1-Ai)(GWPi)+(Bi)(1-ACF4)(GWPCF4)] (IPCC Guideline 2006)
✓ facility-specific correlations
✓ Use Plant A’s assumptions to calculate Plant B’s emissions assuming the two plants are identical or similar
✓ mass balance approach
✓ e.g. CaCO3 CO2 + CaO
▪ Measurement, either
✓ Continuous or intermittent
✓ e.g. Continuous Emission Monitoring System (CEMS)
▪ Combination of measurement and calculation

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WHERE TO FIND METHODOLOGIES FOR INVENTORIES
▪ IPCC Guidelines for National Greenhouse Gas Inventory (2006)
▪ GHG Protocol http://www.ghgprotocol.org/
▪ UK Government guidance https://www.gov.uk/government/publications/guidance-on-how-to- measure-and-report-your-
greenhouse-gas-emissions
▪ Sector specific tools e.g. ENCORD, CORSIA etc.
▪ Industry associations
✓ Steel
✓ Cement
✓ Semi-conductor
✓ Petrochemical…
▪ Scheme-specific
✓ EUETS

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Agenda

✓Introduction to Climate Change, Global Warming & GHG

✓Climate Action, Related Bodies & Regulations
✓Basics of GHG Accounting
✓GHG Protocol
✓Scope 3 Emissions in detail
✓Decision tree methodology for GHG calculation
✓ISO 14064 standards
✓GHG Report Verification

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GHG PROTOCOL

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GHG PROTOCOL

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GHG PROTOCOL
▪ Other Guidance / methodologies available for
specific regions, sectors, types of emissions

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QUANTIFICATION METHODOLOGIES

▪ Main Approach used:

▪ GHG emissions = (AD x EF)

Quantity
Intensity

Where
▪ AD = activity data
▪ EF = emission factor

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SELECTION AND COLLECTION OF GHG ACTIVITY DATA
▪ Select and collect GHG activity data consistent with the requirements of the selected quantification methodology
▪ Scope 1 (Direct GHG emissions):

✓ Consumption of fuel, raw material, gasoline and refrigerant

✓ e.g. 10 m3 diesel, 1 tonne clinker, and 500 liter gasoline

▪ Scope 2 (Energy indirect GHG emissions):

✓ e.g. Electricity bill

▪ Scope 3 (Other indirect GHG emissions):

✓ e.g. Waste disposal (quanitity of waste disposed), outsourcing transportation (km or tkm)

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COMMON APPROACHES FOR ACTIVITY DATA

▪ Invoice consumption data

▪ Start & end of period meter readings

E.g. 31st Dec 2012 meter reading - 1st Jan 2012 meter reading = 2012 consumption

▪ Mass Balance taking account of start & end stock, and deliveries & transfers – e.g. for fuel oil stored on site
E.g Oil consumption = start stock + deliveries + transfers – end stock

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EMISSION FACTORS

ISO 14064-1 requirements on EFs:

1. Derived from recognized sources
▪ Electricity and energy suppliers
▪ Government
▪ Academic
▪ LCA software – Eco-invent, SimaPro
▪ Other appropriate sources – WRI GHG Protocol
.2. Appropriate for the source concerned
▪ Check appropriateness of the calculation
3. Current at time of quantification
▪ The latest EF including the GWP
4. Accurate, reproducible and uncertainty accounted
5. Consistent with intended use
▪ E.g. is it for internal purposes or regulated scheme with
requirements on accuracy

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REPORTING EMISSIONS

▪ Dependent on type of reporting and standard

▪ Corporate inventories expressed in absolute emissions and can be broken down by scopes

▪ Life Cycle Footprints expressed per functional unit

e.g. x tonnes CO2e/ tonne of product

▪ GHG projects report reductions in emissions or increased removals resulting from the project

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STEPS IN IDENTIFYING & CALCULATION GHG EMISSIONS

Source: https://www.era-environmental.com/blog/ghg-compliance-and-
sustainability-reporting

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GHG INVENTORY BOUNDARIES
The GHG inventory development process
consists of four key steps:
1. Start by reviewing accounting
standards and methods, determining
organizational and operational
boundaries, and choosing a base year.
2. Collect data and quantify GHG
emissions.
3. Develop a GHG Inventory Management
Plan to formalize data collection
procedures.
4. Set a GHG emission reduction target Source: https://www.epa.gov/climateleadership/ghg-inventory-development-process-and-guidance#step1

and track and report progress.

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ORGANIZATIONAL BOUNDARIES
▪ Control: The organization
accounts for all GHG emissions
and/or removals from facilities over
which it has financial or operational
control
▪ Equity Share: The organization
accounts for its portion of GHG
emissions and/or removals from
respective facilities

Source: Business Travel GHG Emissions Analysis: Factors, Tools, and Cases for Calculating GHG Emissions and Setting Science-
Based Targets for Organizations

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REPORTING BOUNDARIES
▪ The organization shall establish and
document reporting boundaries,
including the identification of direct and
indirect GHG emissions and removals
associated with the organization’s
operations.

Source: https://www.savemoneycutcarbon.com/learn-save/what-is-the-difference-between-scope-1-2-and-3-emissions/

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SCOPE 1

1. Generation of electricity, heat, or steam - These emissions result from combustion of fuels in stationary sources, e.g.,
boilers, furnaces, turbines

2. Physical or Chemical Processing - Most of these emissions result from manufacture or processing of chemicals and
materials, e.g., cement, aluminum, adipic acid, ammonia manufacture, and waste processing

3. Transportation of Materials, Products, Waste, and Employees - These emissions result from the combustion of fuels in
company owned/controlled mobile combustion sources (e.g., trucks, trains, ships, airplanes, buses, and cars)

4. Fugitive emissions - These emissions result from intentional or unintentional releases, e.g., equipment leaks from joints,
seals, packing, and gaskets; methane emissions from coal mines and venting; hydrofluorocarbon (HFC) emissions during
the use of refrigeration and air conditioning equipment; and methane leakages from gas transport.

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SCOPE 2

1. Electricity - This type of energy is used by almost all companies. It is used to operate machines, lighting, electric vehicle
charging, and certain types of heat and cooling systems.
2. Steam - Formed when water boils, steam is a valuable energy source for industrial processes. It is used for mechanical
work, heat, or directly as a process medium. Combined heat and power (CHP) facilities (also called cogeneration or
trigeneration) may produce multiple energy outputs from a single combustion process.
3. Heat - Most commercial or industrial buildings require heat to control interior climates and heat water. Many industrial
processes also require heat for specific equipment. That heat may either be produced from electricity or through a non-
electrical process such as solar thermal heat or thermal combustion processes (as with a boiler or a thermal power plant)
outside the company’s operational control
4. Cooling - Like heat, cooling may be produced from electricity or through the distribution of cooled air or water.

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SCOPE 2 APPROACHES

Market-Based Method - GHG emissions emitted by the generators from which the reporter contractually purchases electricity bundled
with contractual instruments, or contractual instruments on their own
• Individual corporate procurement actions
• Opportunities to influence electricity suppliers and supply
• Risks/opportunities conveyed by contractual relationships, including sometimes legally enforceable claims rules
Location-Based Method - A method to quantify scope 2 GHG emissions based on average energy generation emission factors for
defined geographic locations, including local, subnational, or national boundaries
• GHG intensity of grids where operations occur, regardless of market type
• The aggregate GHG performance of energy intensive sectors (for example, comparing electric train transportation with gasoline or diesel
vehicle transit)
• Risks/opportunities aligned with local grid resources and emissions

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Agenda

✓Introduction to Climate Change, Global Warming & GHG

✓Climate Action, Related Bodies & Regulations
✓Basics of GHG Accounting
✓GHG Protocol
✓Scope 3 Emissions in detail
✓Decision tree methodology for GHG calculation
✓ISO 14064 standards
✓GHG Report Verification

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SCOPE 3

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SCOPE 3 SCOPE 3 CATEGORIES
Upstream Activities

All other indirect emissions that occur

throughout a company’s value chain,
which are split into 15 different
categories.

▪ To include based on: Size Influence Downstream Activities

Risk Stakeholders Outsourcing

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THE ROLE OF SCOPE 3 EMISSIONS
▪ Environmental Impacts: Proportion from supply chain, by industry

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SCOPE 3 EMISSIONS MEASUREMENT

01 02
Identify emission Conduct Scope 3
reduction actions screening
Scope 3

Emissions
04 03
Set ambitious but Measure and track
realistic targets impact

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 06
SCOPE 3 EMISSIONS MEASUREMENT
Work towards
05 coverage and
high- quality
Ensure alignment data.
04 with frameworks.

Gather the
03 data.

Engage with
02 suppliers (if small
no of suppliers –
Define materiality
01 of suppliers (with
consider events).

Define biggest impact).

relevant
categories.

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1. PURCHASED GOODS AND SERVICES
▪ This category includes all upstream (i.e., cradle-to-gate) emissions from the production of
products purchased or acquired by the reporting company.

Calculating Emissions from Purchased Goods and Services

1. Supplier-specific method – collects product-level cradle-to-gate GHG inventory data

Collect data

suppliers
from
from goods or services suppliers.
2. Hybrid method – uses a combination of supplier-specific activity data (where available)
and secondary data to fill the gaps.
3. Average-data method – estimates emissions for goods and services by collecting data
on the mass (e.g., kilograms or pounds), or other relevant units of goods or services

Use secondary
purchased.

data
4. Spend-based method – estimates emissions for goods and services by collecting data
on the economic value of goods and services purchased.
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2. CAPITAL GOODS

▪ This category includes all upstream (i.e., cradle-to-gate) emissions from the production of capital goods purchased or acquired by the
reporting company in the reporting year.
▪ Capital goods are final products that have an extended life and are used by the company to manufacture a product; provide a service;
or sell, store, and deliver merchandise. In financial accounting, capital goods are treated as fixed assets or as plant, property, and
equipment (PP&E). Examples of capital goods include equipment, machinery, buildings, facilities, and vehicles.

Calculating Emissions from Capital Goods

The calculation methods for category 1 (Purchased goods and services) and category 2 (Capital goods) are the same.

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3. FUEL- AND ENERGY-RELATED ACTIVITIES NOT INCLUDED IN
SCOPE 1 OR SCOPE 2
▪ This category includes emissions related to the production of fuels and energy purchased and consumed by the reporting
company in the reporting year that are not included in scope 1 or scope 2.
Activities included in category 3
(Fuel- and energy-related emissions not included in scope 1 or scope 2)

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4. UPSTREAM TRANSPORTATION AND DISTRIBUTION

▪ Transportation and distribution of products purchased in the reporting year in Calculating Emissions from Transportation
vehicles not owned or operated by the reporting company
▪ Third-party transportation and distribution services purchased (either directly Distance-based method - determining the mass,
or through an intermediary), including inbound logistics, outbound logistics distance, and mode of each shipment, then
(e.g., of sold products), and third-party transportation and distribution applying the appropriate mass-distance emission
between a company’s own facilities. factor for the vehicle used
▪ Emissions may arise from the following transportation and distribution Fuel-based method - determining the amount
activities throughout the value chain of fuel consumed (i.e., scope 1 and scope 2
▪ Air transport emissions of transport providers) and applying
▪ Rail transport the appropriate emission factor for that fuel
▪ Road transport
▪ Marine transport Spend-based method - determining the amount
▪ Storage of purchased products in warehouses, distribution centers, and retail of money spent on each mode of business travel
facilities. transport and applying secondary (EEIO)
emission factors.

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5. WASTE GENERATED IN OPERATIONS
Calculating Emissions from Waste
▪ Category 5 includes emissions from third-party disposal and Generated in Operations
treatment of waste generated in the reporting company’s owned CO2 CH4 HFCs
or controlled operations in the reporting year. This category From From From the
includes emissions from disposal of both solid waste and degradation of
both fossil and
decomposition of
biogenic materials
disposal of
refrigeration
wastewater. biogenic in landfill or WTE and air
carbon technologies conditioning
▪ Waste treatment activities may include: contained in units
waste)

1. Supplier-specific method - collecting waste-specific

scope 1 and scope 2 emissions data directly from waste
treatment companies (e.g., for incineration, recovery for
Landfill Recycling Composting
recycling)
2. Waste-type-specific method - using emission factors
for specific waste types and waste treatment methods
3. Average-data method - estimating emissions based on
total waste going to each disposal method (e.g., landfill)
and average emission factors for each disposal method
Incineration Wastewater

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6. BUSINESS TRAVEL
This category includes emissions from the transportation of employees for business related activities in vehicles owned or operated by
third parties, such as aircraft, trains, buses, and passenger cars.
Emissions from business travel may arise from:
• Air travel
• Rail travel
• Bus travel
• Automobile travel (e.g., business travel in rental cars or employee-owned vehicles other than employee commuting to and from work)
• Other modes of travel
Calculating Emissions from Business Travel

1. Fuel-based method 2. Distance-based method 3. Spend-based method

Determining the amount of fuel Determining the distance and mode of Determining the amount of money
consumed during business travel (i.e., business trips, then applying the spent on each mode of business travel
scope 1 and scope 2 emissions of appropriate emission factor for the transport and applying secondary
transport providers) and applying the mode used (EEIO) emission factors.
appropriate emission factor for that fuel

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7. EMPLOYEE COMMUTING
This category includes emissions from the transportation of employees between their homes and their worksites.
Emissions from employee commuting may arise from:
• Automobile travel
• Bus travel
• Rail travel
• Air travel
• Other modes of transportation
• (e.g., subway, bicycling, walking).

Calculating Emissions from Employee Commuting

Distance-based method - Fuel-based method - determining Spend-based method -

determining the mass, distance, the amount of fuel consumed (i.e., determining the amount of money
and mode of each shipment, then scope 1 and scope 2 emissions of spent on each mode of business
applying the appropriate mass- transport providers) and applying travel transport and applying
distance emission factor for the the appropriate emission factor for secondary (EEIO) emission
vehicle used that fuel factors.

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8. UPSTREAM LEASED ASSETS
▪ Category 8 includes emissions from the operation of assets that are leased by the reporting company in the reporting year and not
already included in the reporting company’s scope 1 or scope 2 inventories. This category is applicable only to companies that operate
leased assets (i.e., lessees).

Calculating Emissions from Leased Assets

1. Asset-specific method - collecting asset-specific (e.g., site-specific) fuel and energy use data and process and fugitive emissions data
or scope 1 and scope 2 emissions data from individual leased assets
2. Lessor-specific method - collecting the scope 1 and scope 2 emissions from lessor(s) and allocating emissions to the relevant leased
asset(s)
3. Average data method - estimating emissions for each leased asset, or groups of leased assets, based on average data, such as
average emissions per asset type or floor space.
▪ Companies may also calculate the life cycle emissions associated with manufacturing or constructing leased assets.

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9. DOWNSTREAM TRANSPORTATION AND DISTRIBUTION
This category includes emissions that occur in the reporting year from transportation and
Calculating Emissions from
distribution of sold products in vehicles and facilities not owned or controlled by the Transportation (Downstream)
reporting company. The emissions from downstream
Emissions from downstream transportation and distribution can arise from transportation should follow the calculation
transportation/storage of sold products in vehicles/facilities not owned by the reporting methods described in category 4, i.e.,
company. For example: companies may use either the fuel-based,
▪ Warehouses and distribution centers distance-based or spend-based method.
▪ Retail facilities
▪ Air transport
▪ Rail transport
▪ Road transport
▪ Marine transport

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10. USE OF SOLD PRODUCTS
▪ This category includes emissions from the use of goods and services sold by the reporting company in the reporting year. A
reporting company’s scope 3 emissions from use of sold products include the scope 1 and scope 2 emissions of end users. End
users include both consumers and business customers that use final products.

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11. USE OF SOLD PRODUCTS
Calculating Emissions from Use of Sold Products

Direct Use-phase Emissions Indirect Use-phase Emissions

Products that directly consume energy (fuels or electricity) during use Calculation method for indirect use-phase emissions from products that
Involves breaking down the use phase, measuring emissions per product, and indirectly consume energy (fuels or electricity) during use. For products
aggregating emissions that indirectly consume energy or emit GHGs, the reporting company

Fuels and feedstocks should calculate emissions by creating or obtaining a typical use-phase

Involves collecting fuel use data and multiplying them by representative fuel profile over the lifetime of the product and multiplying by relevant emission
emission factors factors.

Greenhouse gases and products that contain or form greenhouse gases that
are emitted during use
Involves collecting data on the GHG contained in the product and multiplying
them by the percent of GHGs released and GHG emission factors.

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12. END-OF-LIFE TREATMENT OF SOLD PRODUCTS
Category 12 includes emissions from the waste disposal and treatment of products sold by the reporting company (in the
reporting year) at the end of their life. This category includes the total expected end-of-life emissions from all products sold in
the reporting year.

Calculating Emissions from End-of-Life Treatment of Sold Products

1. Like the calculation methods in category 5 (Waste generated in operations) - collect data on total mass of sold products
(and packaging) from the point of sale by the reporting company through the end of life after use by consumers.

2. If the reporting company sells intermediate products, it is required to account for emissions from disposing of the sold
intermediate products at the end of their life

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13. DOWNSTREAM LEASED ASSETS
▪ This category includes emissions from the operation of assets that are owned by the reporting company (acting as lessor)
and leased to other entities in the reporting year that are not already included in scope 1 or scope 2. This category is
applicable to lessors (i.e., companies that receive payments from lessees).

Calculating Emissions from Leased Assets

1. The calculation methods for upstream and downstream leased assets do not differ.
2. The availability and access to information depends on the type of asset leased. For example, a company that leases
vehicles may need to request fuel or mileage data from lessees in order to calculate emissions.
3. Companies requesting scope 1 and scope 2 data from lessees using the asset-specific method in category 8 (Upstream
leased assets) may need to request additional information from the lessee in order to properly allocate emissions to the
reporting company’s leased assets.

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14. FRANCHISES
▪ Category 14 includes emissions from the operation of franchises not included in scope 1 or scope 2. A franchise is a
business operating under a license to sell or distribute another company’s goods or services within a certain location. This
category is applicable to franchisors (i.e., companies that grant licenses to other entities to sell or distribute its goods or
services in return for payments). Franchisors should account for emissions that occur from the operation of franchises (i.e.,
the scope 1 and scope 2 emissions of franchisees) in this category.

Calculating Emissions from Franchises

1. Franchise-specific method - collecting site-specific activity data or scope 1 and scope 2 emissions data from franchisees
2. Average-data method - estimating emissions for each franchise, or groups of franchises, based on average statistics,
such as average emissions per franchise type or floor space.

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15. INVESTMENTS
▪ This category includes scope 3 emissions associated with the reporting company’s investments in the reporting year (not already
included in scope 1 or scope 2). This category is applicable to investors and companies that provide financial services. This category
also applies to investors that are not profit driven (e.g. multilateral development banks). Investments are categorized as a downstream
scope 3 category because providing capital or financing is a service provided by the reporting company

Calculating Emissions from Investments

Debt Investments
Equity Investments Corporate debt holdings, including corporate debt instruments (such as
Subsidiaries, Associate/affiliated companies, bonds or convertible bonds prior to conversion) or commercial loans,
Joint ventures and own capital and balance sheet with known use of proceeds, General corporate purposes debt
holdings (such as bonds or loans)
Managed Investments and Client Services
Project Finance
Investments managed by the reporting company on behalf of clients
Long-term financing of projects - equity investor
(using clients’ capital), or services provided by the reporting company
(sponsor) or debt investor (financier)
to clients

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Agenda

✓Introduction to Climate Change, Global Warming & GHG

✓Climate Action, Related Bodies & Regulations
✓Basics of GHG Accounting
✓GHG Protocol
✓Scope 3 Emissions in detail
✓Decision tree methodology for GHG calculation
✓ISO 14064 standards
✓GHG Report Verification

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15. DECISION TREE – TRAVEL

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15. DECISION TREE – TRAVEL

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15. DECISION TREE – PROCUREMENT

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15. DECISION TREE – PROCUREMENT

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15. DECISION TREE – WATER

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15. DECISION TREE – WATER

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SUMMARY

▪ Various drivers for GHG reporting

▪ Global efforts to address emissions – Kyoto Protocol

▪ Increasing number of national/regional schemes

▪ Different types of reporting and GHG standards– corporate, products, projects, etc.

▪ Boundaries for reporting important to understand

▪ Non-CO2 GHGs included under many schemes

▪ Various methodologies for calculation

▪ Activity data x Emission factor most common approach

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Agenda

✓Introduction to Climate Change, Global Warming & GHG

✓Climate Action, Related Bodies & Regulations
✓Basics of GHG Accounting
✓GHG Protocol
✓Scope 3 Emissions in detail
✓Decision tree methodology for GHG calculation
✓ISO 14064 standards
✓GHG Report Verification

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ISO 14064-1: 2018
▪ At the organization level for quantification and reporting of GHG emissions and removals

▪ Greenhouse gases — Part 1: Specification with guidance at the organization level for quantification and reporting of
greenhouse gas emissions and removals

▪ The 1st edition was published in March 2006.

▪ The 2nd edition was published in December 2018.

▪ cancels and replaces the 1st edition
▪ has been technically revised

▪ 3-year transition period

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ISO 14064-1 – MAJOR CHANGE 1
▪ A new approach of reporting boundaries - facilitating the inclusion and expansion of indirect emissions

• ISO 14064-1: 2006 Mandatory

➢ Scope 1 - Direct GHG emissions and removals
➢ Scope 2 - Energy indirect GHG emissions
➢ Scope 3 - Other indirect GHG emissions
Optional
• ISO 14064-1: 2018 Mandatory
➢ Scope 1 Category 1
➢ Scope 2 Category 2
➢ Scope 3 Categories 3, 4, 5 and 6
Mandatory if significant

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ISO 14064-1 – CATEGORY 1
• Category 1: Direct GHG emissions and removals
➢ Mandatory
➢ Separately for CO2, CH4, N2O, NF3, SF6 and other appropriate GHG groups (HFCs, PFCs, etc.)

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ISO 14064-1 – CATEGORY 2
• Category 2: Indirect GHG emissions from imported energy
➢ Mandatory if significant

Electricity

Others

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ISO 14064-1 – CATEGORY 3, 4

Category 3: Indirect GHG emissions from transportation

▪ Mandatory if significant

▪ Mobile source mostly due to fuel burnt in transport equipment

Category 4: Indirect GHG emissions from products used by an organisation

▪ Mandatory if significant

▪ “Cradle to supplier output gate” approach

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ISO 14064-1 – CATEGORY 5,6
Category 5: Indirect GHG emissions associated with the use of products from an organisation
▪ Mandatory if significant
▪ Use (and disposal) of products supplied by an organisation during its life stage

Category 6: Indirect GHG emissions from other sources

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ISO 14064-1 – INDIRECT SOURCES

Setting pre-determined criteria for significance of indirect GHG emissions, e.g.

▪ Magnitude / volume of the emissions

▪ Level of influence on sources / sinks

▪ Access to information

▪ Level of accuracy of associated data

▪ Buyer requirements

▪ Regulatory requirements

▪ Concern of interested parties

▪ Scale of operation

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ISO 14064-1 – CATEGORIES

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ISO 14064-1
This standard allows companies to

1. assess their entire value chain emissions impact, and

2. identify where to focus reduction activities.

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ISO 14064-1

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ISO 14064-1 – MAJOR CHANGE 2
Relating to mitigation activities – reduce or prevent GHG emissions, or enhance GHG removals

➢ GHG emission reduction and removal enhancement initiatives (if implemented, the organization should quantify
and report)

➢ GHG emission reduction or removal enhancement projects

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ISO 14064-1 – MAJOR CHANGE 2
▪ (NEW) GHG emission reduction or removal targets
➢ Setting targets to reduce GHG emissions (optional)
➢ If report, a list of information shall be specified and GHG

GHG Intensity or
Absolute?

Period GHG

GHG
Amount

Category

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ISO 14064-1 – MAJOR CHANGE 3
GHG related data and information to be documented, explained and justified

➢ “Document” – capturing and storing the information in writing

➢ “Explain” – describing how approaches were used or decisions taken, and why approaches were chosen or
decision made
➢ “Justify” – explaining why alternative approaches were not chosen, and providing supporting data or analysis

How to manage GHG data and information?

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ISO 14064-1 – MAJOR CHANGE 3

Cl. 5.2.3 – Indirect GHG emissions

➢ Apply and document a process to determine which indirect emissions to include in the GHG inventory

➢ Define and explain the pre-determined criteria for significance of indirect emissions

➢ Justify the exclusions of significant indirect emissions

➢ Retain documented information (records) when the pre-determine criteria is changed

Cl. 5.2.4 – GHG inventory categories

➢ (should) document each category of GHG emission separately at the facility level

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ISO 14064-1 – MAJOR CHANGE 3
▪ Cl. 6 – Quantification of GHG To identify GHG ➔ To document
all relevant GHG sources and sinks
emissions and removals sources and sinks

➔To explain and document

To determine
quantification the quantification approach (i.e. process of obtaining GHG
approach data)

➔ To identify and document

To select and the data for each source and sink
collect GHG data

To select or develop ➔ To explain and document the justification

GHG quantification for the selection or development of the model
model

To calculate GHG ➔ To justify

emissions and if the latest IPCC’s GWP is not used
removals

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ISO 14064-1 – MAJOR CHANGE 3
Cl. 8 – GHG inventory quality management

➢ document the required considerations of setting the quality management system

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ISO 14064-1 – MAJOR CHANGE 4
New term – GHG statement

➢ Factual and objective declaration that provides the subject matter for the verification or validation
➢ Replace the old term “GHG assertion”
➢ Could be provided in a GHG report

ABC Company
ABC Company Address: ABC Building, Hong Kong Reporting
GHG Report 2020 Period: 1 Jan – 31 Dec 2020 GHG Emissions:
Cat. 1: XX tonnes of CO2e Cat.
2: YY tonnes of CO2e Cat. 5:
ZZ tonnes of CO2e
…………………….

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ISO 14064-1 – INTERPRETING ISO STANDARDS

▪ ‘Shall’

Mandatory requirements

▪ ‘Should’

Preferable but not necessarily mandatory

▪ Those clauses with “shall” must be fulfilled for third party verification

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FIVE ACCOUNTING PRINCIPLES
The application of principles is fundamental to ensure that GHG-related information is a true and fair account. The
principles are the basis for, and will guide the application of, requirements in this part of ISO 14064
▪ Relevance
▪ Completeness
▪ Consistency
▪ Accuracy
▪ Transparency
Use principles as fallback position wherever standard or methodology requirements are unclear

WORKSHOP

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OPERATIONAL BOUNDARIES
GHG emissions are principally the result of the following types of activities:
▪ Stationary combustion
Combustion of fuels in stationary equipment e.g. boilers, furnaces, etc.
▪ Mobile combustion
Combustion of fuels in transportation devices.
▪ Process emissions
Emissions from physical or chemical processes such as CO2 from the calcination step in cement
manufacturing, PFC emissions from aluminum smelting
▪ Fugitive emissions
Intentional and unintentional releases such as equipment leaks, fugitive emissions from coal piles, wastewater
treatment, etc.

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QUANTIFICATION STEPS
Identify Sources (and sinks)
▪ Within its organisational
boundaries, the organisation shall
quantify and document GHG Select Quantification
emissions and removals Methods

Collect Activity Data

Select Emissions Factors

/ GWPs

Calculate Emissions (and

Removals)

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IDENTIFICATION OF GHG SOURCES AND SINKS
▪ The organization shall identify and document GHG sources contributing to its direct GHG emissions
▪ The organisation should separately document suppliers imported electricity, heat or steam consumed by the
organisation
▪ The organisation shall as appropriate, categorize identified GHG sources and sinks
▪ GHG Protocol Appendix D lists typical sources by sector
▪ Sector specific guidance also available e.g. WRI sector toolsets

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EXAMPLE OF GHG SOURCES

TUV SUD South Asia Pvt. Ltd. | ISO 14064 Series GHG Lead Verifier Program Ed 2023 Rev 0 18 January 2023 121
SINKS AND REMOVALS
▪ Sink - physical unit or process that removes a GHG from the atmosphere
▪ Biological/non-biological sinks – e.g. carbon sequestration in forestry, carbon capture and storage
▪ Removals – the quantity of GHGs removed in a sink
▪ To include in inventory, must be within organisational and operational boundaries of organisation

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EXCLUSIONS
▪ The organisation may exclude from quantification direct or indirect GHG sources or sinks whose contribution to GHG
emissions or removals is not material or whose quantification would not be technically feasible or cost effective
1. Still must identify sources
2. Relationship with completeness principle
3. Suggest ato report and quantify (or estimate) every source in the first time inventory, then decide which
emission is material or not
4. Classify very small sources – typically <1% - estimation methodology
▪ The organisation shall explain why certain GHG sources or sinks are excluded from quantification

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SELECTION OF QUANTIFICATION METHODOLOGIES
▪ The organisation shall select and use quantification methodologies that will reasonably minimize uncertainty and
yield accurate, consistent and reproducible results
▪ Two approaches: Calculation or Measurement
▪ Comparisons of Accuracy
• Measurement>Mass balance>Activity factor*Emission factor
• However consideration given to practicalities
▪ The organisation shall explain any changes to quantification methodologies previously used by the
organisation

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SELECTION AND COLLECTION OF GHG ACTIVITY DATA
▪ The organisation shall select and collect GHG activity data consistent with the requirements of the selected
quantification methodology
▪ In multiple facility organisations, standard reporting procedures can help consistency in approach and reduce risk of
errors
▪ Which source of data is most accurate?
▪ Examples of Activity data:

Source: Defra

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SELECTION OR DEVELOPMENT OF GHG EMISSION OR REMOVAL
FACTORS
Priority to select GHG emission factors
▪ Organisation-specific GHG emission factors
▪ Regional/Country published GHG emission factors
▪ Relative international business associations or organisations published GHG emission factors
Practical Issues:
▪ In reality organisation specific factors rarely used – certain sectors where data readily available or required for regulatory
reasons
▪ Country specific factors most commonly used

Sources of EFs e.g.:

▪ DEFRA
▪ GHG Protocol tools
▪ National Government Data
▪ US Registry Data – TCR / CCAR

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ACCOUNTING FOR RENEWABLE ENERGY

▪ Issues with how to account in inventories where green tariff purchases, renewable energy certificates

▪ If green electricity tariff incorporates renewable electricity that has been accounted for in a grid electricity factor, then
for company to claim benefits of that would be double counting (e.g. situation in the UK)

▪ Possible to claim renewable electricity emissions factor where not included in grid factor (e..g issuing of RECs in US)

▪ Different if renewable energy purchased directly from a supplier

▪ Draft guidance from GHG protocol available:

http://www.ghgprotocol.org/feature/ghg-protocol-power-accounting- guidelines

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GHG INVENTORY COMPONENTS
A GHG inventory is detailed list of sources, sinks, emissions and removals, but not necessarily what you include in a
GHG report for public disclosure

Shall be included in inventory:

▪ GHG emissions and removals
▪ Base-year GHG inventory

May be included in inventory:

▪ Organisational activities to increase GHG removals

Should be included in inventory:

▪ an uncertainty assessment for GHG emissions and removals, including the uncertainty associated with emission and
removal factors

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EXPORTED ENERGY

▪ For electricity, heat and steam generated on site and exported, emissions may be reported separately

▪ But should not be deducted from total direct emissions

▪ i.e. include in total scope 1 emissions, but can also be reported separately from other direct emissions in more

detailed reporting

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ILLUSTRATION OF GHG INVENTORY
Note: CO2 from
▪ This must be done for each facility and the organisation as a whole Biomass combustion
reported separately
▪ Would also include removals + scope 3 where appropriate
Emissions of
Direct Energy Indirect CO2 from
Emissions Emissions Total (Scopes 1 Biomass
(Scope 1) (Scope 2) and 2) Combustion

(tonnes (tonnes (tonnes (tonnes

CO2e/year) CO2e/year) CO2e/year) CO2e/year)
Emission Source

Stationary Combustion 2730 6321 9051 132

Mobile Combustion 684 - 684 32

Fugitive Emissions 30 - 30 -
Process Emissions - - - -
GHG Emission (tonnes
CO2e/year) 3444 6321 9765 164

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DIRECTED ACTIONS

▪ Directed actions - specific activity or initiative, not organised as a greenhouse gas project, implemented by an
organisation to reduce or prevent direct or indirect GHG emissions or increase GHG removals

▪ May occur outside of inventory bonudary

▪ Optional

- May plan and implement directed actions

- May quantify GHG emission or removal differences attributable to the implementation of directed actions;

▪ Specific rules in standard on what to include if reporting direct actions and associated emissions or removals
differences,

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DIRECTED ACTIONS EXAMPLES

Directed action examples

▪ Energy demand use management,

▪ Energy efficiency

▪ Technology or process improvements

▪ GHG capture and storage in, typically, a GHG reservoir

▪ Fuel switching

▪ Afforestation

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BASE-YEAR INVENTORY
▪ The organisation shall establish a historical base year
▪ Enables comparison
▪ When establishing the base year:

• quantify emissions/removals using data representative of the organisation's activity

• select a base year for which verifiable GHG emissions or removals data are available
• explain the selection of the base year
• develop a GHG inventory for the base year consistent with the provisions of ISO 14064-1

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BASE-YEAR AND PERFORMANCE TRACKING

▪ A meaningful and consistent comparison of emissions over timerequires that companies set a performance
comparison with a comparative base timeline (year) over which current performance is evaluated.
▪ If sufficient information on historical GHG emissions or removals is not available, the organisation may use its first
GHG inventory period as the base year. Base-year emission shall be accessible and verifiable; the organisation
shall explain the selection of the base year
▪ The organisation shall develop, apply and document a base-year recalculation procedure to state any
“significance threshold” applied for deciding on historic emissions recalculation.

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BASE-YEAR AND PERFORMANCE TRACKING

1,200

1,100
Base year
GHG 1,000
emissions
900 Performance

800 Emission

700

600
Base year
500
2000 2001 2002 2003 2004 2005 2006
Performance -34 -100 38 146 140 215
Emission 1,023 1,057 1,123 985 877 883 808

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BASE-YEAR RE-CALCULATION PROCEDURE
▪ Changes to operational boundaries
e.g. acquisition or sale of a facility
▪ Changes to organisational boundaries
e.g. merger, acquisitions, and divestments

▪ Changes to quantification methodologies

e.g. changes in emission factors and activity data

▪ Protocol: Significance threshold

- A qualitative/quantitative criterion used to define any significant change to the data, inventory boundary, methods, or any other
relevant factors
- Will trigger base year recalculation
- e.g. 10% change of the base year emissions (CCAR)

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ILLUSTRATION OF BASE YEAR EMISSIONS RECALCULATION (1)

GHG Protocol for Corporate Accounting

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ILLUSTRATION OF BASE YEAR EMISSIONS RECALCULATION (2)

GHG Protocol for Corporate Accounting

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ILLUSTRATION OF BASE YEAR EMISSIONS RECALCULATION (3)

GHG Protocol for Corporate Accounting

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ASSESSING AND REDUCING UNCERTAINTY
▪ The organisation should complete and document an uncertainty assessment for GHG emissions and removals,
including the uncertainty associated with GHG emission and removal factors
▪ Quantitative/qualitative
▪ Measurement, calculation, emissions factors, etc.
▪ Improve accuracy/ helps verifiers
▪ Referenced in 14064-1:
Guide to the Expression of Uncertainty in Measurement (GUM). BIPM, IEC, IFCC, ISO, IUPAC, IUPAP, OIML,1993
(corrected and reprinted in 1995)
▪ GHG Protocol Guidance on uncertainty: http://www.ghgprotocol.org/calculation-tools/all-tools

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CIRCUMSTANCES WITH NO BASE YEAR RECALCULATION

▪ Facilities that did not exist in the base year

Not affecting the emissions of base year

▪ Organic growth or decline Organic growth or decline results in GHG emissions and needs to be counted in the
company’s emissions profile over time

▪ The organisation shall not recalculate its base-year GHG inventory to account for changes in facility production
levels, including the closing or opening of facilities

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GHG INFORMATION MANAGEMENT SYSTEM – REQUIRED
PROCEDURES BY ISO 14064-1
▪ GHG information management procedures

▪ Document retention and record keeping procedure

▪ Recalculation of GHG inventory procedure

▪ Key difference between ISO 14064-1 and Protocol

▪ Protocol has no requirement for procedures

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INFORMATION MANAGEMENT PROCEDURES

The organisation shall establish and maintain GHG information management procedures that:

▪ ensure conformance with the principles of ISO 14064-1

▪ ensure consistency with the intended use of the GHG inventory
▪ provide routine and consistent checks to ensure accuracy and completeness of the GHG inventory

▪ identify and address errors and omissions

▪ document and archive relevant GHG inventory records, including information management activities

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INFORMATION MANAGEMENT PROCEDURES

GHG information management procedures should consider

▪ Responsibility of GHG inventory

▪ Appropriate training of GHG inventory team

▪ Organisational boundaries and operational boundaries

▪ Appropriate application of quantification methodologies

▪ If applicable, calibration of measurement equipment

▪ Data collection system

▪ Regular accuracy check

▪ Internal audit

▪ Opportunities to improve information management process

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GHG INFORMATION MANAGEMENT SYSTEM
Raw Data GHG Report

Information Collecting INVENTORY

Responsible Source List

Persons

Activity Data
Aggregation

Preservation
Emissions
Factors
EVIDENCE

Invoice GWP
Daily
Log
Flow meter
Calculations

System Boundary

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GHG ASSERTION/GHG STATEMENT

▪ If public GHG assertion made claiming conformance to ISO 14064- 1, must either

- make available to the public a GHG report, or

- an independent third-party verification statement related to the GHG assertion

▪ The GHG assertion could be provided in the form of a GHG report

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GHG ASSERTION/GHG STATEMENT
Suggest that GHG assertion shall at least include:
▪ Responsible Party, intended user, and inventory period
▪ Objective, criteria, scope, level of assurance and materiality
▪ Principles of defining organisational and operational boundaries
▪ Organisational and operational boundaries
▪ GHG types and GHG emissions and removals
▪ Selection and establishment of base year
▪ Signature of management representative

A GHG report in replacement of GHG assertion is highly recommended!

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PLANNING THE GHG REPORT
The organisation should consider and document the following in planning its GHG report:
▪ Purpose and objectives of the report (organisation’s GHG policies, strategies or programmes, and applicable
GHG programmes
▪ Intended use and intended users of the report
▪ Overall and specific responsibilities for preparing and producing the report
▪ Frequency of the report
▪ Period for which the report is valid
▪ Report format
▪ Data and information to be included in the report
▪ Policy on availability and methods of dissemination of the report

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GHG REPORT CONTENT
The organisation’s GHG report shall describe the organisation’s GHG inventory and shall include the following:
▪ Description of the reporting organisation
▪ Description of quantification
▪ Selection and change of base- year
▪ Selection and change of quantification methodology
▪ Factors and data quality
▪ Statement
The organisation should consider including in the GHG report
▪ Programme requirements
▪ Directed action or project reduction
▪ Uncertainty assessment
▪ Other indirect GHG emissions if quantified
▪ Emission intensity ratio
▪ GHG information management and monitoring procedures

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Agenda

✓Introduction to Climate Change, Global Warming & GHG

✓Climate Action, Related Bodies & Regulations
✓Basics of GHG Accounting
✓GHG Protocol
✓Scope 3 Emissions in detail
✓Decision tree methodology for GHG calculation
✓ISO 14064 standards
✓GHG Report Verification

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ORGANISATION'S ROLE IN VERIFICATION ACTIVITIES
The overall aim of verification is to review impartially and objectively the reported GHG assertion in accordance with the
requirements of ISO 14064-3. On a regular basis, the organisation should:
▪ Prepare and plan for verification
▪ Determine an appropriate level of assurance
▪ Conduct verification

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ORGANISATION'S ROLE IN VERIFICATION ACTIVITIES
Preparing for verification

▪ Review verification requirements such as ISO14064-3 or GHG programme

▪ Determine the level of assurance required
▪ Agree to verification objectives, scope, materiality and criteria with the verifier
▪ Ensure that the roles and responsibilities of appropriate staff

Planning for verification

▪ Scope, criteria, level of assurance

▪ Roles and responsibilities
▪ Data sampling and custody procedures
▪ Maintenance of necessary documentation and records
▪ Appointment of competent verifiers

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GHG VALIDATION AND VERIFICATION

(New) Requirements for validation and

ISO/IEC 17029: verification bodies
2019

(Updated) Requirements for bodies validating

ISO 14065: and verifying environmental
2020 information

Competence Requirements for GHG

ISO 14066: validation teams and verification
2011 teams

(Updated) Specification (with guidance) for the

ISO 14064-3: verification and validation of
2019 greenhouse gas statements

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GHG VALIDATION AND VERIFICATION
(New)
ISO/IEC 17029:
2019

▪ Conformity assessment — General principles and requirements for validation and verification bodies (V/VBs)
▪ Published in October 2019
▪ Applicable to validation/verification bodies in any sector
▪ Contains general principles and requirements for the competence, consistent operation and impartiality of V/VBs

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GHG VALIDATION AND VERIFICATION
(Updated)
ISO 14065:
2020
▪ General principles and requirements for bodies validating and verifying environmental information
▪ Published in December 2020
▪ The Scope has been expanded to include bodies performing validation, verification and agreed upon procedures
in all areas of environmental information

▪ Aligned with the requirements of ISO/IEC 17029: 2019

▪ 3-year transition period (with ISO/IEC 17029: 2019)

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GHG VALIDATION AND VERIFICATION
(Updated)
ISO 14064-3:
2019

▪ Greenhouse gases — Part 3: Specification with guidance for the verification and validation of greenhouse gas
statements

▪ Published in April 2019

▪ Specific for verifying and validating GHG statement

▪ Technically revised; substantial changes

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GHG VALIDATION AND VERIFICATION
Major Change 1
▪ New Definitions of “Verification” and “Validation”
Confirmation that claims are either plausible with regards to the intended future use (validation) or truthfully stated
(verification)

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GHG VALIDATION AND VERIFICATION
▪ (ISO 17029) ‘Verification’ refers to confirmation of a claim, through the provision of objective evidence, that specified
requirements have been fulfilled.
▪ (ISO 14065 & ISO 14064-3) ‘Verification’ refers to process for evaluating a statement of historical data and information
to determine if the statement is materially correct and conforms to criteria

occurrence of what is claimed

t
Verification

claim
(in the form of “statement” in GHG world)

TUV SUD South Asia Pvt. Ltd. | ISO 14064 Series GHG Lead Verifier Program Ed 2023 Rev 0 18 January 2023 158
GHG VALIDATION AND VERIFICATION

BIG impact to
GHG reporting at organization level !!

In the past……

Verification
ABC Company
GHG Report 2020 GHG
Verification Body

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GHG VALIDATION AND VERIFICATION

Mixed engagement

➢ An engagement combining verification and validation activities performed at the same time and on the same GHG
statement

➢ V/VB – competent in both verification and validation

Verification
+
Validation
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GHG VALIDATION AND VERIFICATION
Major Change 2
▪ Deliverables of “Verification” and “Validation”
➢ (NEW) Verification / validation report
➢ Verification / validation opinion (named as verification / validation statement in the past)

Report Opinion

+
Summary of verification Formal written declaration that provides confidence
on the GHG statement and confirms conformity
/ validation process with the criteria

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GHG VALIDATION AND VERIFICATION

(Source: ISO 14064-3: 2019)

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GHG VALIDATION AND VERIFICATION

What is the
competences of
GHG validation
and verification
bodies?

Accreditation

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GHG VALIDATION AND VERIFICATION

Accreditation
Body

Accreditation

GHG Validation/ Standards: ISO/IEC

17029, ISO 14065, ISO
Verification Body 14066 and ISO 14064-3

Validation / Verification

Reported GHG Standards:

Information ISO 14064-1 / ISO 14064-2 /
ISO/TS 14067

TUV SUD South Asia Pvt. Ltd. | ISO 14064 Series GHG Lead Verifier Program Ed 2023 Rev 0 18 January 2023 164
Any questions?

TUV SUD South Asia Pvt. Ltd. | ISO 14064 Series GHG Lead Verifier Program Ed 2023 Rev 0 18 January 2023 165
 Thank you for
your time
www.tuvsud.com/en-in
[email protected]

TUV SUD South Asia Pvt. Ltd. | ISO 14064 Series GHG Lead Verifier Program Ed 2023 Rev 0 18 January 2023