Transcript 0915 Reporting through CDP - Verduzco (Chevron)

Reporting through the
Carbon Disclosure Project
GHG Reporting Workshop
March 1, 2011
Laura Verduzco
Chevron Corporation
© 2011 Chevron U.S.A. Inc.
Agenda
 What is CDP?
 Questionnaire
 Scoring
 The energy sector
 Suggested areas of collaboration for IPIECA-CDP
 CDSB – Organizational Boundaries for reporting GHG emissions
 Issue questions
© 2011 Chevron U.S.A. Inc.
What is CDP?
 “The Carbon Disclosure Project is an independent not-for-profit
organization holding the largest database of primary corporate climate
change information in the world.” -CDP website
 Who discloses information? 3000+ companies in 60 countries
(including 84% of the Europe 300, 82% of the Global 500; 70% of the
S&P 500 and 74% of the South Africa 100 companies)
 CDP represents 551 institutional investors, holding US$71 trillion in
assets under management
 Types of programs:
– Investor CDP
– CDP Public Procurement
– CDP Water Disclosure
– CDP Supply Chain
– CDP Cities
© 2011 Chevron U.S.A. Inc.
Focus
Questionnaire
Investor CDP
 Management: Governance, Strategy, Targets and Communications
 Risk and Opportunities
 Emissions: Methodology and Data
 Industry Specific: Auto, Electric Utilities and Oil and Gas
© 2011 Chevron U.S.A. Inc.
Response Rates
Total response rates and disclosed emissions over time by geography (All
Scopes CDP 2003 to CDP 2010)
© 2011 Chevron U.S.A. Inc.
Source: CDP 2010
Scoring
 Scoring:
– Disclosure: business-specific risks and potential opportunities related to
climate change and internal data management practices for
understanding GHG emissions
– Carbon performance score: Measures for climate change mitigation
– Leadership Index (CDLI and CDPI): companies with the most
comprehensive report
© 2011 Chevron U.S.A. Inc.
Source: CDP 2010
CDLI and CDPI – Energy Sector
CPLI cutoff
Emissions
Trading
Governance
CDLI cut-off
Energy Sector
© 2011 Chevron U.S.A. Inc.
Sources: CDP 2010
CDP 2010 chart courtesy of PwC
Suggested areas of collaboration:
IPIECA and the CDP questionnaire
 The following slides present sections of the CDP questionnaire that
have been problematic for Chevron to respond to. The issues
highlighted are likely to affect other IPIECA members, and are
presented with the objective of engaging in a healthy exchange of
ideas and determine IPIECA’s future involvement.
© 2011 Chevron U.S.A. Inc.
New Organizational Boundaries from the Carbon
Disclosure Standards Board (CDSB)

CDP 2011 will add a new organizational setting approach developed by CDSB

The Climate Disclosure Standards Board (CDSB) was formed at the 2007 annual meeting of
the World Economic Forum to standardize reporting guidelines on the inclusion of climate
change information in mainstream financial reports.

The Carbon Disclosure Project (CDP) acts as Secretariat to CDSB and is responsible for
advancing the CDSB Framework

Climate Change Reporting Framework (CCRF) v1.0: It is aligned to principles and objectives
of financial reporting published by the International Accounting Standards Board (IASB).
– Chapter 4- Requirements for Disclosure Content-. Requirements are very similar to the
CDP questionnaire, including information about governance, greenhouse gas emissions,
risks and opportunities, management actions, and future outlook.
– Organizational boundaries for GHG reporting: The CCRF prescribes a single approach
based on the International Accounting Standards/International Financial Reporting
Standards (IAS/IFRS) on consolidation and equity accounting
© 2011 Chevron U.S.A. Inc.
CCRF Boundaries Snapshot
Part 2 GHG emissions should include emissions from operationally controlled and/or other entities/activities/facilities that:
a. are not consolidated in Part 1; and
b. must be reported under regulatory requirements by the disclosing organization in its capacity as operating licensee or in any other capacity (e.g.:
tenant); or c. due to the nature of the contract for the operation or use of the entity/activity/facility:
i. expose the reporting organization to risk, opportunity or financial impacts; or
ii. enable the reporting organization to influence the extent to which GHGs are emitted.
•CDP 2011: Added CCRF reporting approach to the list of consolidation options
•What is the value of adding a fourth reporting boundary option? This will increase investor
confusion and reporting burden. Further, some industries have well established guidelines (i.e.
IPIECA GHG Reporting guidelines)
© 2011 Chevron U.S.A. Inc.
CDP 2011 – Other issue areas
 The questions continue to change year-after-year: Lack of
consistency limits analysis of historical results and trends
 Different metrics every year to measure GHG intensity.
For example - CDP 2011 requires GHG/FTE. FTE definition:
“FTE (or full time equivalent) is a way to compare staff numbers across companies with
different working arrangements. To calculate FTE employees you should add together
all staff hours and then divide it by a full time working day of 7.5 hours.”
© 2011 Chevron U.S.A. Inc.
CDP 2011 – Other issue areas
Confidentiality concerns: Investment details and projected savings are confidential
business information.
Prediction of the future: the scientific and engineering information requested is not yet
available.
© 2011 Chevron U.S.A. Inc.
CDP 2011 – Other issue areas

Disaggregation of investment numbers: Some of the strategic
investments of the oil and gas industry, or other allied energy industries (such
as power generators), are not for the sole purpose of reducing greenhouse
gas emissions

What is the future of the O&G section?
“The oil and gas sector module is not scored as part of the CDP 2011 scoring
methodology.” -CDP 2011 Guidance Document
© 2011 Chevron U.S.A. Inc.