AU Emissions Data Discrepancies: REPUTEX ANALYSIS
RepuTex analysis indicates that only a small portion of greenhouse gas data reported by Australian companies under NGER is ‘audit quality’. Furthermore, the number of companies disclosing data accounts for only 23% of the 1,000 companies expected to be liable under Australian emissions trading, while the aggregation of disclosed data at the corporate level makes it difficult for the market to assess a company’s carbon exposure.
The Australian Government has released greenhouse gas emissions and energy usage data from the first phase of its mandatory reporting program, NGER (National Greenhouse and Energy Reporting). Eligible companies submitted their first year reports in October 2009. After reviewing the data, the GEDO (Greenhouse and Energy Data Officer) released the 2008-09 carbon emissions data for 232 registered corporations. Direct (scope 1) and indirect (scope 2 only) emissions, along with the total energy usage of each company were disclosed. Emissions data for four companies was withheld due to commercial sensitivity, while two companies applied for a Reporting Transfer Certificate (RTC).
RepuTex analysis of NGER I data suggests that Australian companies found NGER I challenging, with the GEDO admitting that data from this phase is unlikely to be complete, and contains issues with data accuracy and ‘inconsistent approaches’ to applying reporting methodologies. Figure 1 highlights the sources of such incompleteness and inaccuracy for NGER data.
Figure 1: Australian NGER Data Quality
| Difficulty establishing operational boundaries - Difficulty defining the Corporate Group - Difficulty identifying responsible parties for reporting within joint venture, unit trusts and partnerships, notably where there are various locations at which activities are taking place or several entities have operational control or a number of activities occurring which are not part of the primary production process. Defining a facility and determining the boundaries for reporting System implementation to capture data - Data incompleteness (i.e. not capturing all the input/outputs) Governance framework for emissions reporting - Accountabilities, policies and guidelines Access to data - Contractual rights (i.e. energy suppliers)/confidentiality - Poor corporate record keeping - Access to accurate billing data Incomplete coverage of emissions/energy sources - Example: Contractors & Sub-contractors Incorrect use of NGER emissions calculation methodologies and incomplete supporting documentation Accidental omission or incorrect reporting of information |
In addition, the Australian Federal Government’s Online System for Comprehensive Activity Reporting (OSCAR) has been problematic, with large discrepancies between NGER emissions data and that disclosed through CDP (Carbon Disclosure Project) or via company environment or sustainability reports. As a result, only a small portion of the reports are classified as ‘audit quality’. This is of concern for analysts or investors using data to forecast carbon pricing impacts on company and asset valuations.
As disclosed NGER data is aggregated at a corporate level, analysts are restricted in assessing a company’s CPRS liability, given that a facility threshold of 25ktCO2-e determines CPRS inclusion. Hence, even though the market is likely to have access to more corporate emissions data through NGER, further company research and analysis is needed to determine CPRS liability, and any subsequent carbon pricing impacts.
RepuTex has analysed the emissions data from NGER I and as Figure 2 shows, the number of companies disclosing data through NGER only makes up a small portion (i.e. 23%) of the 1,000 companies expected to be liable under the CPRS. This trend is likely to continue, as even after NGER II, RepuTex projection shows that the emissions data for nearly 60% of the CPRS liable market will not be publically available.
Figure 2: CPRS Liability Analysis of NGER Companies
Although NGER data provides some information on the total direct emissions and energy usage of an increasing number of corporations, due to its aggregated nature it does not offer significant insight into likely company CPRS liability. Further, the lack of quality and completeness of such data needs to be taken into consideration by analysts as well as competitors that are using such data for competitive benchmarking.
