Ernst & Young, one of the Big Four accounting firms, has received approval to certify greenhouse gas emissions reporting.
One might well ask, so what? Why is this important? For one thing official GHG reporting accreditation using American National Standards Institute criteria will help ensure that CSR and similar reports are accurate and use widely accepted standards.
For another, it lends more gravitas to sustainability reporting when a major third-party firm such as Ernst & Young is on board. Ernst & Young specializes in assurance, tax, transaction and advisory services.
Ernst & Young and the other big accounting firms — Deloitte, KPMG and PricewaterhouseCoopers — see increasing opportunities to help their clients bring the same level of diligence to sustainability reporting that they bring to financial reporting. The ANSI accreditation is a major step in efforts to combine sustainability metrics and conventional financial reporting.
ANSI, a private non-profit organization, is the voice and coordinator of the U.S. standards and conformity assessment system. Its Accreditation Program for Greenhouse Gas Validation/Verification Bodies was launched in 2008. The program oversees the professional conduct of third-parties responsible for verifying the accuracy of emission assertions.
“Organizations are eager to demonstrate their efforts to inventory, report, and reduce GHG emissions by turning to third-party bodies to verify their claims,” says ANSI. Most of the existing voluntary disclosure programs as well as mandatory reporting regulations in North America require accredited third-party verification.
“Our clients face increasingly complex regulatory requirements, as well as the weight of public expectations around GHG emissions,” says Ann Brockett, Americas assurance leader in Ernst & Young’s Climate Change and Sustainability Services practice. “The trend towards greater disclosure adds pressure, but also brings opportunities to generate revenue and cut costs.”
E&Y will verify GHG assertions related to emissions and removals at the organizational level. As a third-party verification body, Ernst & Young will assess how an organization has measured and quantified its GHG inventory and reported its results against an established protocol. This process will ensure the relevance, completeness, consistency, transparency, and accuracy of emission assertions, ANSI says.
Technical but important, it means that the convergence of financial accounting and GHG reporting is becoming more interrelated and mainstream, which is good for companies that want to do the right thing, and good for the environment.
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