Applicable criteria – The criteria used by the entity to quantify and report its emissions in the GHG statement.
Assertions – Representations by the entity, explicit or otherwise, that are embodied in the GHG statement, as used by the assurance practitioner to consider the different types of potential misstatements that may occur.
Base year – A specific year or an average over multiple years against which an entity’s emissions are compared over time.
Cap and trade – A system that sets overall emissions limits, allocates emissions allowances to participants, and allows them to trade allowances and emission credits with each other.
Comparative information – The amounts and disclosures included in the GHG statement in respect of one or more prior periods.
Emissions – The GHGs that, during the relevant period, have been emitted into the atmosphere or would have been emitted into the atmosphere had they not been captured and channelled into a sink. Emissions can be categorised as:
- Direct emissions (also known as Scope 1 emissions), which are emissions from sources that are owned or controlled by the entity. (Ref: Para. A8)
- Indirect emissions, which are emissions that are a consequence of the activities of the entity, but which occur at sources that are owned or controlled by another entity. Indirect emissions can be further categorised as:
Emissions deduction – Any item included in the entity’s GHG statement that is deducted from the total reported emissions, but which is not a removal; it commonly includes purchased offsets, but can also include a variety of other instruments or mechanisms such as performance credits and allowances that are recognised by a regulatory or other scheme of which the entity is a part. (Ref: Para. A11–A12)
Emissions factor – A mathematical factor or ratio for converting the measure of an activity (for example, litres of fuel consumed, kilometres travelled, the number of animals in husbandry, or tonnes of product produced) into an estimate of the quantity of GHGs associated with that activity.
Emissions trading scheme – A market‑based approach used to control greenhouse gases by providing economic incentives for achieving reductions in the emissions of such gases.
Entity – The legal entity, economic entity, or the identifiable portion of a legal or economic entity (for example, a single factory or other form of facility, such as a land fill site), or combination of legal or other entities or portions of those entities (for example, a joint venture) to which the emissions in the GHG statement relate.
Fraud – An intentional act by one or more individuals among management, those charged with governance, employees, or third parties, involving the use of deception to obtain an unjust or illegal advantage.
Further procedures – Procedures performed in response to assessed risks of material misstatement, including tests of controls (if any), tests of details and analytical procedures.
GHG statement – A statement setting out constituent elements and quantifying an entity’s GHG emissions for a period (sometimes known as an emissions inventory) and, where applicable, comparative information and explanatory notes including a summary of significant quantification and reporting policies. An entity’s GHG statement may also include a categorised listing of removals or emissions deductions. Where the engagement does not cover the entire GHG statement, the term “GHG statement” is to be read as that portion that is covered by the engagement. The GHG statement is the “subject matter information” of the engagement.
Greenhouse gases (GHGs) – Carbon dioxide (CO2) and any other gases required by the applicable criteria to be included in the GHG statement, such as: methane; nitrous oxide; sulphur hexafluoride; hydro fluorocarbons; perfluorocarbons; and chlorofluorocarbons. Gases other than carbon dioxide are often expressed in terms of carbon dioxide equivalents (CO2‑e).
Organisational boundary – The boundary that determines which operations to include in the entity’s GHG statement.
Performance materiality – The amount or amounts set by the assurance practitioner at less than materiality for the GHG statement to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the GHG statement. If applicable, performance materiality also refers to the amount or amounts set by the assurance practitioner at less than the materiality level or levels for particular types of emissions or disclosures.
Purchased offset – An emissions deduction in which the entity pays for the lowering of another entity’s emissions (emissions reductions) or the increasing of another entity’s removals (removal enhancements), compared to a hypothetical baseline. (Ref: Para. A13)
Quantification – The process of determining the quantity of GHGs that relate to the entity, either directly or indirectly, as emitted (or removed) by particular sources (or sinks).
Removal – The GHGs that the entity has, during the period, removed from the atmosphere, or that would have been emitted to the atmosphere had they not been captured and channelled to a sink. (Ref: Para. A14)
Significant facility – A facility that is of individual significance due to the size of its emissions relative to the aggregate emissions included in the GHG statement or its specific nature or circumstances which give rise to particular risks of material misstatement. (Ref: Para. A15–A16)
Sink – A physical unit or process that removes GHGs from the atmosphere.
Source – A physical unit or process that releases GHGs into the atmosphere.
Type of emission – A grouping of emissions based on, for example, source of emission, type of gas, region, or facility.