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December 02, 2018

Improving GHG Accounting and Corporate Reporting

GHG and Corporate Reporting

What external sustainability disclosures does your organization provide and how confident are you that  

they are complete, accurate, and reliable? 

 

I spotted an interesting post on LinkedIn from a thought leader in Integrated Management Systems. If you are interested in Operational Excellence, Ian Dalling from The Chartered Quality Institute is good to follow and read. I have followed him for years and always learn something when I read his materials.  

 

His most recent post pointed to an initiative called the Corporate Reporting Dialogue: Better Alignment Project.  The high-level purpose is to respond to market calls for greater coherence, consistency, and comparability between corporate reporting frameworks, standards and related requirements. Reporting can be very expensive for organizations so alignment, comparability, and streamlining are important for these organizations to consider.   A consistent reporting framework would also help investors compare investments, as noted in the recent CPA Journal Article: The Current State of Sustainability Reporting. 

 

At Enviance we provide information management systems to help organizations better measure and manage EHS information processes and improvement outcomes. Measured and modeled Greenhouse Gas (GHG) emissions calculation and reporting is one of our information management specialties.

 

GHG and other emissions are reported as part of corporate reporting standards. Each of the organizations below is engaged in some aspect of corporate reporting standards, sometimes called Corporate Social Responsibility (CSR) or Sustainability reports.

  

 

These groups will continue to drive the alignment of corporate sustainability reporting with financial reporting, so business operators and investors can identify, manage and report the sustainability topics that are important to a wide range of stakeholders. Most of our customers are seeing increasing questions from stakeholders and investors driving the need for better analytics accessible by the EHS teams, investor relations, and other business leaders.

  

To responsibly handle EHS questions and measure your progress against improvement goals, you must be able to measure and report facility-level information and corporate level at the same pace as financial reporting. Not a single company would run their financial accounting system using unauditable systems and processes linked by spreadsheets. However, today many organizations are running their global EHS programs without an enterprise-wide IT strategy and allowing part or all of their reported emissions process to be linked by a chain of data systems, processes and spreadsheets that present reporting risk to their senior leadership and directors.  

 

As I noted above, the right question to ask is what external sustainability disclosures are we providing and how confident are we that they are complete, accurate, and reliable? Remember your facilities are reporting to regulatory agencies at an asset specific level at the same time your entire organization is rolling up global views of your compliance and emissions records. These reports are often derived from different systems that may or may not be using the same accounting information creating the opportunity for inconsistent reporting.   

 

EHS data used for compliance and public disclosures should be handled with the same discipline and rigor as financial data. EHS leaders need to understand the management of that data at all points in the chain. You should have confidence in disclosures (Local and Federal compliance, industry groups, NGO’s, and corporate reporting) and improve the quality of the data used in decision making and risk management.

 

As the demands for faster reporting and assurance increase your organization must have an EHS information strategy.  This strategy includes documenting the EHS information management systems (i.e., CEMS, Historians, energy consumption, regulatory reporting, directly measured and modeled emissions, etc) from the plant floor to the sustainability report. The end goal is to verify the information, processes, and controls are in place to assure your compliance and sustainability reporting is accurate and can be verified by a third-party.   

 

Today there are many ways your organization is reporting, from public reporting to local compliance. As EHS professionals we need to understand these dynamics and help our Executive teams and Board of Directors invest wisely to support the systems and processes needed to ensure our EHS reporting has the same process and data rigor as your financial systems 

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