The Climate Registry's Materiality Definition Explained
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by: DanielStouffer | Total views: 91 | Word Count: 475
The materiality definition in The Climate Registry is part of its general verification protocol (GVP). It allows for a threshold of 5%, either over or under statement, of an entitys direct or indirect emissions of greenhouse gases. Direct emissions refers to occurrence onsite from the source, such as when refrigerant gas discharges during a leak. Indirect emissions refer to the use of resources or goods that discharge greenhouse gases during their production.
The Climate Registry is very concerned about the effect of greenhouse gases on the fight against global warming. They are tracking six main gases and these are carbon dioxide, sulfur hexafluoride, nitrous oxide, methane as well as hydrofluorocarbons and perfluorocarbons, which are most commonly found in refrigerants.
Initially, when the Climate Registry first released a materiality definition, it caused a great deal of uncertainty surrounding the term "absolute value basis". However, the registry has released a clarification, removing this term and replacing it with a 5% over or under statement leeway.
The Climate Registry has set verification standards to address emissions reported by organizations in North America. The materiality definition is quite specific to this geographic region, and as other regions around the world have different reporting requirements, the registry requires stand alone verification statements for each region. Thus, documents have to include the materiality threshold plus the threshold for emissions calculated using different methods in each area.
Organizations are permitted to specifically define their gas emissions in respect to which emissions could be classified as insignificant within their particular operation. The 5% materiality definition is classified to represent the amount of insignificant emissions allowed, and is a standard within financial accounting practices.
The materiality definition addresses errors or misstatements reported by an entity with regards to its greenhouse gas emissions. An inaccuracy occurs when a companys stated direct or indirect emissions differs from its true emissions, give or take five percent. Under the registry, these inherent uncertainties can be a result of rounding errors, numerical mistakes, uncertain emission factors, or other miscalculations.
The Climate Registry was established in 2007 to provide a standardized method for companies in the United States, Canada and Mexico to voluntarily report greenhouse gas emissions. The aim of the nonprofit agency is to get a better understanding of the harmful effects greenhouse gases are having on the environment by asking companies to report their emissions. The registry supports policies that involve voluntary and mandatory reporting and regulatory oversight of greenhouse gas emissions.
The Climate Registry requires a number of different reporting protocols in addition to the materiality definition. For example, the reporting of direct and indirect emissions on a geographical, operational, facility and company level. Companies that use equipment with refrigeration and air conditioning systems or heating, ventilation and air-conditioning systems turn to refrigerant management programs. These programs include software and web-based applications that will automatically track and report emissions, thus assuring compliance and accuracy.
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Daniel Stouffer has much more information about the materiality definitionand how the refrigerant-tracker can aid you.
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