ngers and data capture systems: reporting requirements
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NGERS & Data Capture Systems
Presented by: Micheal AxelsenDirectorApplied Insight Pty Ltd
INTRODUCTION
About the speaker
• Micheal Axelsen is Chair of the CPA Australia Information Technology & Management Centre of Excellence, and is a consultant and Director of Applied Insight Pty Ltd, and is based in Brisbane. As an information systems consultant, his primary professional interest is in ensuring that clients have the right enterprise data governance strategies and practical approaches in meeting business compliance obligations.
• To this end he is currently undertaking a PhD investigating the effects of accounting standard changes upon IS audit. If you aren’t careful he will tell you all about it.
• He holds a Bachelor of Commerce (Hons) and a Masters of Information Systems, and is an FCPA.
• Micheal can be contacted on 0412 526 375 or micheal.axelsen@appliedinsight.com.au at any time.
About this presentation
NGERS REQUIREMENTS
National Greenhouse & Energy Reporting System
• Establishes a reporting system to provide:– robust and transparent emissions and energy data for
the Australian Carbon Pollution Reduction Scheme– a streamlined national reporting framework for
greenhouse gas emissions and energy data to assist Commonwealth, State and Territory government programs and activities
– consistent information to the Australian public– data to meet Australia’s international reporting
obligations
NGERS legislative framework
NGERS Thresholds
Liable entities
• Those with operational control over a facility (or facilities) from a sector covered by the scheme whose emissions exceed the emissions threshold
• A facility:
– Activities must produce greenhouse gas emissions or produce or consume energy.
– Activities are part of a production process.
– Activities occur at a ‘single site’.
– Activities are attributable to a single industry sector.
• 50kt of CO2 emissions is the equivalent of, for example, the operation of 15 data centres with 1000 servers over one year – so, not a small business!
• Note: <3kt = a ‘small’ facility; these emissions can be estimated without actual data
• This no doubt requires legal advice to assess whether a facility exists
Methods of emissions estimation
• Liable entities (approximately 1000 – we think!) will need to report emissions by one of four methodologies (set out by National Greenhouse and Energy Reporting Act 2007)
– Method 1: the National Greenhouse Accounts default method – Method 2: a facility-specific method using industry sampling and
listed Australian or international standards or equivalent for analysing fuels and raw materials
– Method 3: a facility-specific method using Australian or international standards or equivalent for sampling and analysing fuels and raw materials (similar to 2, but uses Australian standards for sampling
– Method 4: direct monitoring of emission systems, on either a continuous or periodic basis
• Methods 1-3 are estimates of emissions based upon increasingly accurate emissions factors. Method 4 monitors actual emissions.
NGERS reporting requirements
• A single annual emissions report is required to be submitted by 31 October each year under both the NGER Act and the Scheme.
• Under the CPRS, liable entities whose emissions exceed 125K tonnes per annum (‘Large Emitters’) must have their emissions independently audited. For all other entities under NGERS and the CPRS, they may be subject to audit on suspicion of non-compliance or on a risk-management basis.
• As report identifies number of permits used, the business must ensure its calculation is accurate, and that people understand the report and data they are producing.
Record-keeping requirements
• Information that should be kept includes:
– a list of all sources monitored
– the activity data used for calculation of greenhouse gas emissions for each source,
– categorised by process and fuel or material type
– documentary evidence relating to calculations - for example, receipts, invoices and details of payment methods
– documentation of the methods used for greenhouse gas emissions and energy estimations
– documents justifying selection of the monitoring methods chosen
– documentation of the collection process for activity data for a facility and its sources
– records supporting business decisions, especially for high-risk areas relating to reporting coverage and accuracy.
NGERS record-keeping requirements
• Records can be kept electronically or in paper-based form. • AS ISO 15489 (the Australian and international standard for record
management) provides guidance• Management of information over the information lifecycle is a
challenge due to potential changing definitions and criteria• Records need to be kept over 7 years
Implications of NGERS
• Compliance with the reporting requirements (National Greenhouse and Energy Reporting Act 2007) means the development or implementation of major information systems.
• NGERS is independent of the CPRS – and captures more companies than the CPRS.
• The current proposed delay of one year has some impact on the carbon pricing models, but compliance efforts by NGER reporting entities will need to continue.
• Although of course we are still waiting for ETS legislation to be passed!
Entities that aren’t part of NGERS
• As for SME’s, they are less affected from an information systems perspective
• Similar concerns exist though for ensuring that the integrity of, for example, price estimation models is accurate (given, for example, electricity cost increases of 18% and gas cost increases of 12%).
• It is likely that you will need to estimate and select prices based upon a rigorous method, or potentially attract the attention of the ACCC.
• SME’s that supply liable entities and/or entities that have ‘green’ purchasing policies may especially need to understand the impact of the scheme on their future demand
• ‘Very Large’ SME’s and large corporations that are currently outside of the CPRS, but could be caught in potential future expansions of the definition, should consider planning for the implementatin of greenhouse gas emissions reporting information systems.
Clearly this cannot be solved by Excel
Image from www.xkcd.com/282 Some Rights Reserved.
Image from Flickr user http://www.flickr.com/photos/felipearte Some Rights Reserved.
CONCLUSIONDEVELOPING AUDIT-COMPLIANT REPORTING
Proposed criteria to become a greenhouse & energy auditor
Information Systems
• Like all financial systems the information systems of liable entities will need to address asset safeguarding, data integrity, system effectiveness and system efficiency concerns.
• Department of Climate Change liaising at the moment to establish audit framework
• Systems will need to be reliable and timely (“95% confident”) having regard to: – Transparency– Comparability
• Extensions or integrations to accounting information systems are likely.
• Based upon a professional framework, there are important factors for a business to address if it is going to create an auditable information system to support its emissions report.
- Accuracy- Completeness
Data assurance
Ensuring auditable data under COBIT
Assess-Plan-Do-Advance
An information system is not something you plug in...
... It’s all about the governance
COBIT Control Objectives – see www.isaca.org
CONCLUSION
Conclusion – meeting the challenges of IT
Information Technology & Management Centre of Excellence
Conclusion
• This is just an overview• Details are very complex• This year will of course capture some big players – but
some (smaller) players are caught by 2010/2011 financial year
• www.climatechange.gov.au (see: reporting)• www.cpaaustralia.com.au• www.appliedinsight.com.au
CONTACT DETAILS
Micheal AxelsenDirector, Applied Insight Pty Ltd
m: 0412 526 375t: +61 7 3139 0325e: micheal.axelsen@appliedinsight.com.au
blog: www.michealaxelsen.com
Applied Insight Pty LtdPO Box 603Toowong DC 4066AUSTRALIA
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