A report from the Global CCS Institute, ‘An ESG Reporting Methodology to Support CCS-Related Investment’ discusses the ‘broad range of reporting models’ that have emerged recently along with a significant number of voluntary and non-voluntary ESG standards initiatives and ratings models developed, by various industry organizations, governments, research bodies and market data providers. Standardization of ESG ratings and reporting schemes, remains a critical issue for companies, investors and financiers. The absence of a singular, standardized model of reporting, has resulted in a disparate set of information requirements and methodologies that prove challenging to navigate and interpret. Although there are now leading and widely used examples of both voluntary schemes like the TCFD Recommendations and the Carbon Disclosure Project, and proprietary schemes developed by providers such as MSCI and Sustainalytics, their utility ‘may be greatly improved if there was closer alignment on their approach to specific issues or topics’.
The collision of environmental and digital is a popular meme in the IT world and has come to the attention of the European Union whose Joint Research Centre’s Science for Policy unit has issued a 2022 Strategic Communication Report on ‘Twinning the Green and Digital Transitions in the New Geopolitical Context’ where we read that while ‘environment’ and ‘digital’ are ‘different in nature and each subject to specific dynamics’, their ‘twinning – i.e. their capacity to reinforce each other – deserves closer scrutiny’. To date, the digital transition progressed with only limited sustainability considerations. To diminish adverse side effects and deliver its full potential for enabling environmental, social and economic sustainability, the digital transition requires appropriate policy framing and governance, as presented in the Digital Compass and Fit for 55 the overarching EU plan for a green transition.
The EU CEN/CENELEC standards body is in on the act and in 2021 set up a CEN/TC 467 ‘Climate change’ technical committee where work is underway on the assessment of methane emissions in the gas transmission and distribution network. This report intends to provide aligned technical guidance on how to assess and quantify methane emissions, as well as ensure transparency and comparability of data, to build a reliable basis for the data analysis, identification and monitoring of systematic mitigation activities to the gas sector, authorities and other interested parties. CEN/TC 282 ‘Installation and equipment for LNG’ develops and updates standards in the field of installations, equipment and procedures used for production, transportation, transfer, storage, regasification and use of LNG.
Speaking at the 2022 Ryder Scott reserves conference, Herman Acuña presented the SEC’s current position on climate-related disclosure. Earlier this year the SEC proposed rules to enhance and standardize climate related disclosures for investors. According to Acuña, the SEC proposal is consistent with the reporting frameworks from the Task Force on Climate Related Financial Disclosures (TCFD) and the Greenhouse Gas Protocol (GHG Protocol). These frameworks are ‘already widely accepted and utilized for voluntary disclosures by leading companies’. Read Acuña’s presentation in the current Ryder Scott newsletter.
The US XBRL Standards Body recently published a white paper titled Supporting ESG Data with Standards. This recognizes the need to manage multiple ESG frameworks. ‘The number of ESG frameworks used by companies today is another demonstration of global interest, yet multiple standards, particularly because they may overlap in their coverage, can make it difficult to consistently prepare and analyze ESG data’. To achieve accurate, consistent reporting in the presence of multiple standards, and absent regulatory reporting rules, there must be a common understanding or classification of the data points as used by the ESG community. XBRL suggests that the classification be drafted along the lines of the ‘codified standard managed by the Financial Accounting Standards Board. This should then leverage the machine-readable XBRL format such that ‘investors and analysts can use the same database and analytical applications with both climate and financial data’.
More familiar to Oil IT Journal readers is the ongoing effort at GHG standardization from the Open Footprint Forum, a unit of The Open Group, that grew from the Shell-initiated OSDU initiative. OFF states ‘Currently, the lack of standards for storing, defining, and accessing GHG scope data, including CO2 and carbon, has major business implications’, a notion that might be hard to defend in the light of the multiplicity of standardization efforts and fully-fledged commercial offerings we report on here.
The Professional Petroleum Data Management PPDM is proposing GHG/emissions standardization as a component of its ‘What is a Facility’ initiative. WiaF is a ‘faceted taxonomy’ to describe energy industry facilities. WiaF is designed to fulfil internal data management requirements along with external reporting. ‘Regulatory and ESG reporting require data arranged for a facility. A common language and data standard is vital for consistent reporting, analysis, decision-making, and interpretation for operators and external stakeholders.’
Lisa Wee, writing in Microsoft’s The Record’, reported on an Aveva survey titled Approaching The Age of Performance which found that ‘nine in ten companies expect to accelerate their sustainability activities over the coming year in order to tackle climate change’. Moreover, four in five industries want to increase their digital investments to ‘drive sustainable business models’ leveraging technologies such as AI and cloud computing to lower carbon intensive operations and ‘expedite the move to net zero’. Handily, Aveva’s Data Hub has been repurposed from its original industrial data management scope to ‘provides a data trail that proves energy comes from low-carbon sources, providing proof of net-zero commitments to investors and environmental, social and governance auditors’.
Opex Group’s Emissions.AI is a digital solution that helps carbon intensive companies decarbonize their operations and reduce emissions, energy and fuel costs. The ‘first of its kind’, Emissions.AI is a technology solution created specifically for complex facilities. It contextualizes operational emissions and leverages engineering first principles, analytics, and AI to identify hidden operational inefficiencies, improvements and opportunities for lower emissions and costs.
Microsoft’s own #BuildFor2030 initiative aims to advance the UN Sustainable Development Goals leveraging the ‘Microsoft Cloud for Sustainability’ to help customers aggregate sustainability data in an actionable way and provide accurate carbon accounting.
Also in the latest Microsoft Record, Schneider Electric’s Olivier Blum observed that real-time access to carbon dioxide emissions data is a prerequisite to decarbonization. However, a Schneider Electric and Greenbiz survey of more than 300 corporate energy and sustainability professionals revealed that 52% cent are still relying on ‘archaic spreadsheets’ (this is the Microsoft Record right?) to manage their energy and sustainability data. Enter the Resource Advisor platform, Schneider’s ‘ERP for ESG’, AI-powered cloud-based software for sustainability metrics and reporting.
Shell and SAP are to co-innovate on greenhouse gas emissions accounting solutions and supply chain management practices so all players in the value chains can measure and reduce their greenhouse gas footprint. Shell is a founding member of the Open Footprint Forum (a unit of The Open Group), working together to create a common model for footprint-related data covering all emission types, consumption, and base calculations to normalize and aggregate industry data. Shell’s Powering Progress strategy sets out to accelerate the transition of Shell’s business to net-zero emissions. Shell intends to collaborate with SAP on carbon accounting and management solutions.
This short and unauthoritative compendium of GHG/emissions standards and solutions is probably a small subset of what is available in the market and from regulators and standards bodies. Please ping us on info@oilit.com if your favorite GHG reporting methodology is missing.
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