New Crop of NGER reporters will face reporting challenges

02 Aug 2010Archived News Energetics in the News

PUBLISHED: Carbon & Environment Daily. This year's lower reporting threshold will capture a range of companies that didn't report last year, and they have until the end of this month to register. 
The expansion is likely to increase the number of reporting entities by three to four times, David Mitchell from Energetics told CE Daily.

This year's expansion of National Greenhouse and Energy Reporting scheme is likely to bring in many companies that will struggle to provide the required data, while old-hands reporting for the second time will find it smoother sailing but not trouble-free, says Dr David Mitchell of carbon consultancy Energetics.

This year's lower reporting threshold will capture a range of companies that didn't report last year, and they have until the end of this month to register.

The expansion is likely to increase the number of reporting entities by three to four times, Mitchell told CE Daily.

These corporate newcomers to the scheme will have a smaller emissions footprint and their emissions profile generally won't be as complex, he said.

But that also means they probably haven't paid as much attention to tracking their emissions and energy use, he said.

"So what we are anticipating seeing is more issues around data collection and systems than we probably saw last year."

Mitchell said most of the companies caught in last year's inaugural reporting year had fairly comprehensive data.

"When we worked last year with the big mining houses … with the big power stations … they've got all that data," he said.

"Was it in the form needed? No. Was it complete? Sometimes not, but at least they were looking at it and they worried about it because it was a large part of what they did."

Mitchell contrasted these businesses with one not-for-profit organisation caught for the first time this year.

"Their data is going to be terrible and they know it is going to be terrible. And they are basically saying 'right, well we'll report this year and then we are going to get better next year, and basically can you help us to do that'."

"I'm expecting a lot of engagements like that," he said.
Not enough time for second-year reporters to fix all glitches
Mitchell says second-time reporters will generally do "an order of magnitude better" this year than they did last year, but there are couple of key reasons why it won't be completely smooth sailing.

Firstly, with the OSCAR reporting portal not open for business until about September last year, companies were already in the second reporting year while still finalising their first year reports.

"So for some of the things that they had to improve they probably didn't start doing that, especially if they had to create a new process [until at least] the first of January," he said.

Secondly, many companies would have found a range of problems "and what they've probably done is they've looked at the three major ones and they've sorted those out".

"So it's not like there were just two things to fix. There will be a whole list of problems and they've dealt with the most important and now they are still dealing with the tail."
Audit delay
The NGER scheme administrator has the power to call upon companies to have their data scrutinised by an NGER-registered auditor– a process designed to ensure a consistent approach across sectors in the emerging field of greenhouse gas reporting, as well as serving a compliance function.

But although quite a few companies voluntarily brought in auditors to check their first-year reports to ensure they were robust and accurate, the scheme administrator hasn't yet instigated any audits because the first NGER auditors have only just been registered.

Mitchell says the delay, although not a major problem, is unfortunate.

The "enormous body of understanding" of how to treat particular matters that exists in financial auditing doesn't exist in greenhouse gas accounting, he noted.

"So if you had three different auditors who would come … they might have three different opinions on how a particular issue should be treated in terms of the interpretation of the legislation, the determination and the regulations".

In discussions towards the end of last year the climate change department indicated they wanted to focus through the audits on developing "agreed approaches to particular issues … sort of a verification style or verification to agreed procedures style of auditing", he said.

"They haven't done that and I think that would have been useful because that would provide guidance as to the way in which the department would like things treated with the agreement that everybody in the sector was going to do things in the same way."

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