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 government o Board o 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+ tCO 2 e offsets 1.86m+ tCO 2 e reductions 74.5m+ tCO 2 e verified footprint Our numbers

ISO 14065:2007 accredited by the Joint Accreditation System of Australia and New Zealand (JAS-ANZ) to verify/certify against o ISO :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 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 CO 2 e is the currency Measurement and verification is essential Six greenhouse gases are measured and converted to carbon dioxide equivalents (CO 2 e) 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?

Regulators o Compliance reporting/trading o Fair trading Shareholders o Annual reporting o Some stock exchanges require risk disclosure including carbon emissions Institutional investors o Global Reporting Initiative (GRI) o Carbon Disclosure Project (CDP) Ethical investment o Dow Jones Sustainability Index o FTSE4Good Insurance and banking o UNEP Finance Initiative (UNEP FI) o The Geneva Reports o 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 footprint o An emissions inventory report o Product carbon footprint report Reduce emissions o An emissions management plan Offset the emissions that can’t be reduced o 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 gasGlobal Warming Potential Main emissions source Carbon dioxide CO 2 1Fossil fuel use Methane CH 4 21Ruminant animals and waste Nitrous oxide N 2 O310Agriculture Hydrofluorocarbons HFCs1,300-11,700Refrigerants Perfluorocarbons PFCs6,500 -9,200Aluminium production Sulphur hexafluoride SF 6 23,900Electricity industry Six greenhouse gases

Scope 1 emissions Fuel (petrol, diesel), coal, gas, process emissions from sources owned or controlled by company, e.g. boilers, vehicle fleet Scope 2 emissions Purchased electricity, heat and steam Scope 3 emissions Contractors, 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 (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 programme o Access rules, templates and guidance via password protected page o Access E-Manage on-line inventory management tool with approved emissions factors Prepare for audit: o Emissions inventory report o Emissions management and reduction plan o 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 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 SCHEMESVOLUNTARY SCHEMES Organisation onlyOrganisation, product, service, events CO 2 alone OR All six GHGs Scope 1 emissions OR Scope 1 and 2 emissions Scope 1 emissions Scope 2 emissions Scope 3 emissions (up to 15 categories) Emissions liable under the schemeEmissions 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 OR Selection of reporting organisations are third party verified All organisations are third party verified Accredited certifier

What is required for the offset or carbon credit? COMPLIANCE SCHEMESVOLUNTARY 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 tCO2 e reported ONE offset unit per every ONE tCO 2 e 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