Carbon Footprinting Compliance Schemes - Australia

The most comprehensive Oracle applications & technology content under one roof

Carbon Footprinting for

Compliance Schemes

[email protected]

[email protected]


Objectives

1. Introduction – policy and legislation

2. Emissions scopes – brief overview

3. Reportable emissions and liable emissions – NGERs vs. CPM

4. Thresholds – NGERs vs. CPM

5. Methods for measurement

6. Data capture and management – IT systems

7. Overview Oracle Environmental Accounting and Reporting

8. Accounting for Carbon

9. Daily Processing JDE and E-Bus

10. Implementation Overview

11. After the Implementation


Mandatory Reporting NGERs & CPM & More

NGERs

National Greenhouse and Energy Reporting (NGER) Act 2007

– Originally designed to closely underpin the emissions trading system which was shelved

CPM

Carbon Pricing Mechanism – provided for by the Clean Energy Act 2011

– Introduced carbon price on the economy

– Very much an upstream liability focus - 300 liable entities (CPM) vs. 800 (NGERs)

Voluntary Schemes

– GRI

– NCOS (carbon neutral)

– General Sustainability reporting – often tied to Annual Reports

International

– NZ ETS

– California ETS – begins 1 January 2013

– China – seven major provinces kicking-off from 2013


Carbon Emissions’ ScopesScope 1-3 emissions sources

(2008, National Greenhouse and

Energy Reporting Guidelines,

Australian Government,

Department of Climate Change,

p. 10)


• The four challenges

• Uncertainty

• Methods 1 to 4

• Data source and factors uncertainties

• Energy

• Penalties• Up to $1.1M for CPM - serious non-compliance

Measuring Emissions


Principles of the Measurement

1. Completeness

2. Accuracy

3. Comparability

4. Transparency

• Can be difficult to achieve for large sprawling organisations

• Multiple sites, thousands of energy and supply accounts


Pressure Everywhere

Regulatory Pressure

• How do I meet my regulatory reporting requirements?

• How do I report more efficiently and with a higher level of confidence?

Stakeholder Pressure

• How do I meet increasing demands for transparency?

• How do I protect and build the organization’s brand?

Cost Reduction

• Where can I reduce environmental impacts while also reducing costs?

• How do benchmark and share best practices across the organization?

Collect Data Calculate & Analyze Report

Increased Competition

• How can I respond to the peer activity in the space?

• How can I increase margins and gain market share?


Operational Challenges

Facilities

Mobile Assets

Suppliers

Other Sources

Multiple, Fragmented Systems

• Silos of information

Manual, Error-Prone Processes

• Data extraction and transformation

• Adjustments and eliminations

Aggregation

Accounting Challenges

• Standards

• Access Control

Lack of Actionable Business Data

• Unreliable

• Currencies

• Auditability

• Latency

Environm

enta

l Im

pact S

ourc

es

• Inefficiencies

� Lengthy reporting process with weak internal controls

� Complex systems that cannot identify new opportunities

� Disconnect between strategy and execution


NGER’s Reporting

• What did you do last week?

• How did your firm total your NGER’s data?

– spreadsheets, templates, pivot tables, vlookups, trim,

if(isna) …

– photocopies of invoices

– photocopies of scans of invoices

– subcontractor energy use

• Transparent, Comparable, Accurate, Complete?


Oracle Environmental Accounting & Reporting

• Automated, Auditable Collection of GHG and Environmental Data

Data collection in Financials

OBIEE Dashboards

� Comply with Global Greenhouse Gas Regulations

� Increase Data Collection Efficiency and Reliability

� Improve Environmental and Financial Performance

• Data collection using EBS Financials Release 12.1/JD

Edwards Release 9

• Emissions calculation following Greenhouse Gas Protocol

• Pre-built OBIEE reporting and analytics tools, including

responses to the Carbon Disclosure Project

• Rapid implementation as embedded ERP system component

• Proven solution built on market leading technology



Enables you to…

� Automate Environmental Data Collection

Leveraging Existing Business Processes

� Calculate Greenhouse Gas Emissions

Auditable and in Line with Global Standards

� Analyze KPIs and Comply with Regulations

Meet Internal Reduction Targets and Report Externally



Environmental Data Collection

Excel (WebADI)

Invoice Processing

Inventory Issues

Emissions Calculation Engine

Business Intelligence DashboardsEnergy Emissions Metrics Usage Transactions Reporting

Environmental Data Load Concurrent Request

Environmental Ledger

Environmental Data Warehouse

Manual Batches


Oracle EA&R - Making Your Life Easier

FacilityEmission

Source

Environ

Ledger

Account

Segments

Project

Location/

GeoData

Reporting

Flex

CO2 &

Energy

Rates

Company

Business

Unit


Oracle EA&R - Process Overview

Environ.

LedgerCalculation

Facility

Source

Environ.

WarehouseEmissions

Facility

Orgs

Warehouse

Builder

Emissions

Engine

Accounts

Payable

EA&R

Accounting

Software

PO with

Inventory

Manual

Invoice

AP

Open

Interface

PO

without

Inventory

Manual

Emission

Batches

WEBADI

Emissions

Open

Interface


Reporting Dashboard


Implementation Overview


Management Reporting

Organisations

Levels 1

through 12

Organisations

Levels 1

through 12


NGERS Reporting


Invoice Processing – Emissions Detail with Gas Breakdown


Reporting Dashboard


Answers Analysis


Answers Reporting

results tab to

run report


Answers Analysis

Organisations

Levels 1

through 12

Organisations

Levels 1

through 12


JD Edwards Environmental

Accounting and Reporting


Complexity is HiddenEnvironmental Specifications

Source Energy (Content) Factor (GJ/t) Emission Factor (kg CO2-e/GJ)

Black Coal 27.0 CO2 CH4 N2O

88.2 0.03 0.2

Environmental Transactions

Source Transaction Quantity (t) Source Type Scope* Transaction Mode

Black Coal 20,000 Consumed 1 (Direct) Manual Entry

Data Source: National Greenhouse Accounts (NGA) Factors, Department of Climate Change, Australian Government

Environmental Accounting

Energy Consumed

in GJ

Emissions

Emission Type Emissions in kgs of CO2-e Scope

540000 CO247,628,000 (20,000 x 27.0 x 88.2) 1 (Direct)

CH4 16,200 (20,000 x 27.0 x 0.03)

N2O 108,000 (20,000 x 27.0 x 0.2)

Cumulative Total 47,752,200

En

vir

on

me

nta

l

Em

iss

ion

s

Ca

lcu

lati

on

* Based on GHG Protocol Emission Scope


EBS Invoice Processing

Pressing this

button will

create the

emissions and

shutdown the

screen

This will allow

you to allocate

the usage

across

distribution

lines

On detecting

an invoice as

being a EA&R

transaction, a

pop screen

automatically

appears to

enter usage

• Automatically detects when additional

data needs to be entered

• Values default data based on setup


EBS Emissions Overrides

Override

Rates

Override criteria and justification


Associate Environmental Impact

to Assets

Trans Type – Engine Type

Will have different emission factorsEXTERNAL

assets are

ones that do

not exist in

Oracle

Assets

INTERNAL

assets are

ones that do

exist in

Oracle

Assets

• Leverage Assets already defined in ERP

• Set up external Assets as needed


Allocate Environmental Impact

to AssetsThe system will

determine the Item

code, sub -inventory

and unit of measure

based on setup

The User enters

the usage &

commits the

transaction

On selecting

the type, user

is automatically

prompted for the

associated

Asset

Using the Standard Miscellaneous

Transaction Screen In Inventory

Issue Fuel Consumption To Fleet Vehicles Or Other Assets


Assets

Trans Type –

Engine TypeEXTERNAL

assets are

ones that

do not exist

in Oracle

Assets

INTERNAL

assets are

ones that

do exist in

Oracle

Assets


EA&R KPIs

User Defined Metrics

• Define custom key performance

indicators to more deeply analyze

key metrics

• Normalize data to operational

metrics

• Use drag-and-drop BI Answers

environment in OBIEE to create

custom reports

• Rich end user interaction features

Example: Diesel Oil Consumed per Kilometer traveled

Creating Custom KPIs



•Organisations

•Facilities

•Reporting Structures (Hierarchies)

• Legislative, Management, Responsibility

•Configuration

• Locations, Transport Types, Emission Types,

Measurement Criterion

•Emission Sources (energy factors, emission factors)

• Parent-Source-Activity

• Over-ride factors



•Payables Business Processes

•Environmental Suppliers

•Environmental Assets (cars, stationary, transport type)

•Environmental Inventory

•External Measurements (meters, solar, flows, volumes)

•EA&R KPI’s



•JDE EA&R

• EA&R Company Constants

• Organization to Business Unit Mappings

•E-Business EA&R

• Profile Options

• Operating Unit Parameters

• Project Parameters

• Account Segment Values to Facilities


Post Implementation – The Findings

•Accurately measure and monitor carbon footprint

•Replace laborious, time-consuming spreadsheets

used to produce sustainability reports

•Reduce human error and save on staffing costs

•Comply with the Australian government’s national

greenhouse and energy reporting (NGER) Act

•Data already available for Clean Energy Act


Key Competitive Benefits

•Reduced time taken to generate data for sustainability and NGER

reports from three to four months to almost instantaneously

•Improved sustainability reports accuracy from 20% error margin

to 1% to 2%

•Reported accurate breakdown of energy consumption and

emissions, such as electricity, gas, and fuel

•Removed the need to hire temporary staff

•Enabled mining and construction project managers to generate

energy consumption graphs and reports

•Easy to meet external obligations as a sub-contractor

•Reduced external implementation - reuse in house JDE/E-Bus

abilities


Lessons Learnt

•JDE/E-Bus EA&R and BI EA&R are separate apps (or

are they?)

•IT and the business must work together

•EA&R is intuitive for current users of JD Edwards/E-

Bus

•Easy to use and produces instant outcomes

•EA&R has minimal impact on business processes

•Sustainability requirements is not EA&R

•Reporting - upfront, flexible, rapid changes

•Enable the business with ad-hoc answers reporting


Key Benefits for Data CollectionLeveraging Existing Business Processes

• Reduced environmental data management costs

• Ensure data completeness and avoid manual errors

• Flexibility and scalable data collection mechanisms

• Leverage existing IT investments

• Leverage existing ERP data

• Minimize organizational impact

• Maintain data integrity and security with single source of truth

• Consistent end user experience

• Rapid time to value

• Seamless integration

• Standard look and feel JDE/E-Bus


Key Benefits for Data CollectionEmissions

• Multiple data entry options

• Identify missing data sets

• Automate creation of emissions where possible

• Support multiple hierarchies for reporting

• User access control

• Full audit trail, including supporting documentation

• Reliable and scalable platform


Key Features for Emissions CalculationsControl and Consistency

• Identify emission sources and classify by type

• Set roll-up aggregation levels

• Define emissions factors by source

• Set custom emissions factors

• Manage emissions factor changes with date effectiveness

• Support multiple protocols

• Automatically convert units of measure


Key Benefits for Emissions CalculationsAuditable and in Line with Global Standards

• Ensures compliance with regulatory standards for GHG reporting

• Identifies of Scope 1, 2, and 3 emissions

• Automatically determines correct emission factor

• Enables easy changes to emissions factors over time

• Provides complete audit trail for entries and updates

• Reduces data assurance costs


Key Features for Analytics and ReportingMeet Internal Reduction Targets and Report Externally

• Derive useful business information from raw production and consumption data

• Normalize emissions to square footage, number of employees, revenue, or

other operational metrics

• Link emissions output reductions, energy savings, and other sustainability

initiatives to bottom line savings

• Pre-built OBIEE dashboards with dynamic user interaction

• Custom KPI definition and ad hoc reporting

• Set thresholds and management targets

• Comparative analysis and benchmarking, including versus baseline

• Create scenario based models to answer what-if questions

• Support for carbon offset accounting


Provide Visibility & Drive PerformanceWith Oracle Business Intelligence Analytics

• Derive useful business information from raw

production and consumption data

• View pre-built OBIEE reporting and analytics tools

• Configurable OBIEE dashboards to track areas of risk

• Manage performance against targets

• Drill down into graphical output of past,

current, and projected data

• Analyze historical trends

• Define variance thresholds and receive alerts

• Leverage BI Publisher for report submission

• Publish and distribute reports in multiple formats

Emissions by Scope

Emissions by Facility

Emissions by Source


Key Benefits for Analytics and ReportingMeet Internal Reduction Targets and Report Internally

• Scalable and market leading business intelligence platform

• Rapid creation of environmental reports

• Formatted reports to meet external reporting needs such as the Carbon

Disclosure Project

• Flexible reporting capabilities for quick ad hoc analyses

• Multiple delivery formats including spreadsheets, email, and PDF

• Enables management to targets and continuous improvement

• Powerful insights into high opportunity areas for emissions reductions, energy

savings, and cost savings


Questions/Resources/Thank You

Clean Energy Regulator

Websitewww.cleanenergyregulator.gov.au

Ndevr Websitewww.ndevr.com.au

Ndevr Blog

[email protected]

[email protected]

Carbon Footprinting Compliance Schemes - Australia

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