CEMARS and the carboNZero programme

Ann Smith – Acting Chief Executive

22 August 2012

• A wholly owned subsidiary of Landcare Research, a Crown Research Institute owned by the New Zealand governmento Boardo Independent Advisory Panel

• A GHG certification body accredited by the Joint Accreditation System of Australia and New Zealand (JAS-ANZ)

Who we are?

2 offices: Lincoln and Auckland

5 countries

17 staff

200+ clients

775+ certifications

265,000+ tCO2e offsets

1.86m+ tCO2e reductions

74.5m+ tCO2e verified footprint

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• ISO 14065:2007 accredited by the Joint Accreditation System of Australia and New Zealand (JAS-ANZ) to verify/certify against o ISO 14064-1:2006 (organisation)o PAS 2050:2008 (product)

• Assessed by the UK Environment Agency and licensed under the UK Climate Change Act 2008 as meeting and exceeding the Carbon Trust Standard for the Carbon ReducEQUItion Commitment (CRC) and Energy Efficiency Scheme

• Accredited by the Carbon Disclosure Project as a verification standard suitable for organisations reporting into the CDP

Our credentialsOur credentials

• Certify organisations, products, services, events• Two certification brands

o CEMARS (Certified Emissions Measurement And Reduction Scheme)o carboNZero programme

• Provide rules, tools and guidance• Undertake the third party audits• Programme requirements are influenced by and aligned with

international standards and sector best practice

What we do?

What is it all about?

• Climate change is the issue• GHG emissions is the problem• Price on carbon to encourage

emissions reduction is the solution

• Carbon trading is the mechanism• 1 tonne of CO2e is the currency• Measurement and verification is

essential Six greenhouse gases are measured and converted to carbon dioxide equivalents (CO2e) by multiplying by Global Warming Potentials from the Assessment Reports of the Intergovernmental Panel on Climate Change (IPPC)

• Setting corporate climate change policies

• Measuring and reporting their corporate greenhouse gas emissions

• Setting emissions reduction targets

• Offsetting their emissions

• Influencing others to measure, report and reduce

• Participating in compliance schemes

• Participating in voluntary schemes

• Preparing climate change adaptation plans

What are companies doing?

• Regulatorso Compliance reporting/tradingo Fair trading

• Shareholderso Annual reportingo Some stock exchanges require risk

disclosure including carbon emissions

• Institutional investorso Global Reporting Initiative (GRI)o Carbon Disclosure Project (CDP)

• Ethical investment o Dow Jones Sustainability Indexo FTSE4Good

• Insurance and bankingo UNEP Finance Initiative (UNEP FI)o The Geneva Reportso Equator Principles

Insurance Associations with climate change focus• Association of British Insurers• Malaysia Insurance Institute• National Association of Insurance

Commissioners (USA)• National Association of Mutual

Insurance Companies (USA)• United Nations Environment

Programme’s Finance Initiative

Carbon Disclosure Project• 655 institutional investors worth

US$78 trillion• Over 3,000 listed companies report

from over 60 countries

What is driving companies to take action?

• Accurate and not misleading• Substantiated and verified• Relevant to the company, product or service• Used in the appropriate context or setting

• Footprint based on full life cycle• Footprint based on international standards• Offsets must be additional• Ensure claims are certified• Ensure certifier is accredited

Consumer law and advertising standards

Fair Trading Act 1986 Guidelines for Carbon Claims July 2009

What is involved?

• Measure footprinto An emissions inventory reporto Product carbon footprint report

• Reduce emissionso An emissions management plan

• Offset the emissions that can’t be reducedo Cancel carbon credits equivalent to your remaining emissions

What is involved?

What is a footprint?

• Organisation o An account of the operational GHG emissions

owned and controlled by the organisation with defined boundary and scope• Scope 1 • Scope 2• Scope 3

• Product o An account of the GHG emissions associated with

the life cycle of the product• Upstream• Core process• Downstream

What is a footprint?

Greenhouse gas Global Warming Potential

Main emissions source

Carbon dioxide CO2 1 Fossil fuel use

Methane CH4 21 Ruminant animals and waste

Nitrous oxide N2O 310 Agriculture

Hydrofluorocarbons HFCs 1,300-11,700 Refrigerants

Perfluorocarbons PFCs 6,500 -9,200 Aluminium production

Sulphur hexafluoride SF6 23,900 Electricity industry

Six greenhouse gases

Scope 1 emissionsFuel (petrol, diesel), coal, gas, process emissions from sources owned or controlled by company, e.g. boilers, vehicle fleet

Scope 2 emissionsPurchased electricity, heat and steam

Scope 3 emissionsContractors, business travel (air travel, trains, coaches, taxis, rental cars), couriers, freight, waste to landfill

Three scopes

Organisation vs product boundary and scope

• Certify footprints in accordance with ISO 14064-1 (organisation), PAS 2050 (product) and the Programme rules for management and reduction

• We provide the rules, tools, templates and guidance for clients to prepare for audit

• Audits are undertaken by internal and contracted auditors – we train and assess auditors

• We undertake the independent reviews and issue certificates

• We issue and control the use of the CEMARS and carboNZero certification marks

• Support clients through marketing and implementation of management plan

What we do?

• Register on the programmeo Access rules, templates and guidance via password

protected pageo Access E-Manage on-line inventory management tool

with approved emissions factors

• Prepare for audit:o Emissions inventory reporto Emissions management and reduction plano Disclosure statement

• Undergo audit and address any issues that arise

• Receive certificate and access to the certification marks or logo

• Implement the emissions management programme

What our clients do?

International standardsInternational standards

How we relate to standards and reporting schemes?

• Provides a level playing field by interpreting the standards in a consistent manner This is critical for sectors, supply chains and

suppliers responding to government and other corporate procurement requirements

• Enhances credibility by providing internationally recognised assurance over carbon claims This is critical for exporters and supply chains

• Provides the additional rules needed for certified companies to be able to use a mark or logo This enhances access to markets

Why certification?

• Standards and science based• Accreditation by JAS-ANZ – internationally recognised• Integration of compliance requirements with voluntary

standards thus reducing duplication of effort for clients• Recognition by the UK regulator• Provision of rules, tools, templates, guidance• Rigorous peer review of resources provided• Rigorous independent review of results of verification • Marketing the achievements of clients and the value of

certification• Working with partners• Willingness to collaborate with our accreditation body to

develop policies and procedures for the emerging greenhouse gas standards

What makes us successful?

What is reported?

COMPLIANCE SCHEMES VOLUNTARY SCHEMES

Organisation only Organisation, product, service, events

CO2 alone ORAll six GHGs

All six GHGs

Scope 1 emissions ORScope 1 and 2 emissions

Scope 1 emissionsScope 2 emissionsScope 3 emissions (up to 15 categories)

Emissions liable under the scheme Emissions that company owns, controls, can influence

Rules for reporting are set by the regulator and vary by sector

Rules for reporting are based on international standards

Self declaration ORSelection of reporting organisations arethird party verified

All organisations are third party verifiedAccredited certifier

What is required for the offset or carbon credit?

COMPLIANCE SCHEMES VOLUNTARY SCHEMES

Only the emissions that the organisation is liable to report

All emissions reported within the certified boundary and scope

ONE offset unit per each TWO tCO2e reported

ONE offset unit per every ONE tCO2e reported

May surrender offset units or pay money instead

Offset must be based on an emissions reduction

Offsets can be NZUs or CERs (from CDM) Offsets may be CERs or VCUs from projects certified under the CDM or VCS

NZUs are not created from an emissions reduction and are not additional

Offsets must be additional, permanent, verified, no leakage

Offset units are surrendered not cancelled and may be recycled or reallocated e.g. to agriculture in 2017 – that means there could be double use

Offsets must be cancelled (or equivalent) in the relevant public registry to ensure no double use of the offset