| Understanding the Materiality Definition |
| Written by Daniel Stouffer | |
| Monday, 01 June 2009 | |
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Included in the general verification protocol of the Climate Registry is a materiality definition that allows for a threshold of 5%, under or over statement, relating to direct or indirect emissions of gas. When referring to direct emission, this relates to a gas emission on site or during a leak. Indirect emission classifies a discharge during production from goods or resources.
Included in the general verification protocol of the Climate Registry is a materiality definition that allows for a threshold of 5%, under or over statement, relating to direct or indirect emissions of gas. When referring to direct emission, this relates to a gas emission on site or during a leak. Indirect emission classifies a discharge during production from goods or resources. Greenhouse gases lead to global warming, which will cause an adverse change in our climate. There are six main gases being tracked by The Climate Registry. They are hydrofluorocarbons and perfluorocarbons, which are commonly found in refrigerants, carbon dioxide, methane, sulfur hexafluoride and nitrous oxide. When the greenhouse gases registry first released its materiality definition, there was a great deal of confusion with the term absolute value basis in defining the threshold. But in the most recently released clarification, the term has been removed and replaced with a 5% overstatement or understatement threshold leeway. The materiality definition in The Climate Registrys verification standards addresses emissions reported by entities located in North America. However, since North American and worldwide emission reports are geographically different, the registry requires separate, stand alone verification statements for both regions. The documents must include the materiality threshold plus the threshold for emissions calculated using simplified methods for 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 has been included to address simple errors or mistakes with regard to greenhouse gas emissions. The 5% is intended to allow for rounding errors, uncertain emission factors, numerical mistakes or other miscalculations. Any difference between true emissions and stated emissions is inaccurate if the variance is larger than 5%. 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 materiality definition is one of several reporting protocols required by the Climate Registry. Reporting of indirect and direct emissions on an operational, facility, geographical and company level is another level of protocols. Many companies are turning to refrigerant management programs to help them to automatically track and report emissions from refrigeration and air conditioning systems or heating, ventilation and air-conditioning systems. The Article Author: Daniel Stouffer has a lot of information about the materiality definitionand how the refrigerant-tracker will benefit you. |
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