Understanding the Corporate Emissions Reduction Transparency (CERT) report

The CERT report is a means for businesses operating under the NGER scheme to also publicly report on their climate action.

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What is the CERT Report?

The Corporate Emissions Reduction Transparency (CERT) report was developed by the Clean Energy Regulator (CER). It is a means for businesses operating under the National Greenhouse and Energy Reporting (NGER) scheme to publicly report on their climate action. The CERT report provides a standardised framework to disclose progress towards renewable energy and emissions reduction targets.

The CERT report is designed to minimise redundancy and organisational burden by aligning with existing international and national climate reporting frameworks and programs, such as the Taskforce of Climate-related Financial Disclosure (TCFD) and Climate Active.  Information provided via the pilot will be verified primarily through internal processes including data matching between agency systems.

“Companies that opt-in to the CERT report will demonstrate their leadership and commitment to reducing emissions with the following data presented on a yearly basis:

The CER have launched a 2021 pilot of the CERT reporting process, based on the consultation and codesign process initiated in Q1 of this year. The pilot is open to businesses that meet the NGER scheme publication threshold. The results of the pilot CERT report are due for release early 2022 alongside the public NGER results release. The findings from this pilot will be used to optimise future design and content. 

Is it mandatory to report?

Participation is voluntary. To report using the CERT framework your organisation will need to opt-in. Currently organisations can choose to opt-in annually as part of the NGER scheme. Guidance from the CER does not presently indicate any ongoing commitment to report based on a prior years’ participation.

Why report?

  • Making reporting comparable and meaningful
  • Controlling your story and sharing successes
  • Having a voice in the development of reporting frameworks that will likely impact your business in coming years
  • Providing greater transparency on corporate climate commitments
  • Making trusted information readily, and publicly, available to assist in climate-related policy development
  • Supporting voluntary participation in Australian carbon markets
  • Making climate-related risk-assessment across organisations quickly comparable

How to participate

Organisations that opt-in to this first year of reporting under the pilot program will have a chance to submit their CERT report in late 2021. Additionally, as part of the pilot, any reported carbon offsetting for the FY2021 period must be completed before the 15th of January 2022.

How does CERT build on NGER reporting

Why was the CERT initiative needed?

Climate change poses material financial, physical and transition risks to businesses. It is the duty of directors to respond to these risks. Investors, and stakeholders more broadly, are increasingly taking climate risk into account in their investment decisions and demanding that organisations demonstrate initiative on climate action. Unfortunately, current climate risk reporting practices fall short of stakeholder needs and expectations.

The standardised CERT report provides many advantages over current climate risk reporting practices. Climate risks of different organisations are quickly and easily comparable, as is their progress towards meeting the targets they have set. It enables corporations to reference a trusted and independent source to support their claims about climate action.

Are there limitations to CERT reporting?

The CERT report is not without its limitations and should not be considered a substitute for a comprehensive climate disclosure regime in Australia. The CERT report is structured to publish emissions data on a year-to-year basis, which may not optimally demonstrate the overall trajectory towards achievement of long-term targets and commitments. The scope and boundaries of reporting mean it may not fully capture the total emissions of an organisation and it does not consider Scope 3 emissions. Action toward reducing Scope 3 emissions can therefore not be ascertained from the CERT report.

Like NGER reporting, CERT reporting does not include emissions associated with some joint ventures or minority share holdings in carbon intensive assets. Similarly, emissions outside Australia are excluded, meaning that the CERT report is not fully representative for organisations that operate internationally or across multiple jurisdictions. Where organisations have emissions reduction commitments that do not align solely with the NGER scheme framework, the introduction of CERT reporting, could unintentionally discourage activities needed to achieve net zero emissions globally. There is a risk then, that emissions reduction commitments that fall outside the scope of CERT reporting will be discouraged as some organisations may focus only on reportable reductions.

Is it worth participating?

The CERT report will provide greater transparency on emissions, emissions offsets, and progress towards meeting corporate emissions reduction commitments for reporters under the NGER scheme. It provides an opportunity for organisations planning to reduce their emissions to publicly demonstrate their climate action initiatives. While participation is voluntary, failure to disclose information may result in scrutiny from investors and other stakeholders. By opting into CERT, organisations may encourage investment into their organisation by demonstrating transparency in their commitment towards climate action and offering verifiable evidence of progress towards meeting their emissions reduction targets. The CERT initiative effectiveness should increase with widespread adoption. Participation of a greater number of organisations should make it easier for investors to compare climate risk across organisations and improve accountability for climate-change response and resilience.

Need support?

Greenbase offer support with reporting and associated services to help you report under the NGER scheme. To start a conversation about your reporting needs contact us on (08) 9322 9966, email: projects@greenbase.com.au, or visit our website: www.www2.greenbase.com.au.

You can learn more about CERT by visiting the CER website: Corporate Emissions Reduction Transparency report (cleanenergyregulator.gov.au)

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