DNV VeriSustain Protocol

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Opportunities and Risks
Five Criteria for Credible Reliable Reporting

• DNV VeriSustain Protocol

32nd Annual Energy Environmental
Conference September 18-22, 2005
Russell V. Thornton Director, EHS/Climate
Change/CSR Certification
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Det Norske Veritas (DNV)

• Independent foundation established in 1864 to
  safeguard life, property and the environment.
• This means it is under no external financial or
  shareholder pressure and can present itself to
  the market as a truly independent body.
• World renown reputation of quality and integrity.
• 6600 employees, 100 countries, 300 offices

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DNV Organization

• DNV consists of several business units,
  including
• Maritime industry active since 1864
  (classification of ships, standards development
  and management)
• Certification (environmental, auto, climate
  change, wind, food, etc.) 3rd largest
  certification body in the world, over 50,000
  certificates
• Technology Services qualification of new
  technologies (oil gas)
• Research hydrogen, carbon capture and storage,
  materials, etc.
• Risk Consulting Business Risk Management
• Core Ratings Financial rating service,
  corporate social responsibility and governance

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Pale Blue Dot
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A Sense of Obligation
Stephen Crane (1871-1900)
A Man Said to the Universe  
  A man said to the universe "Sir, I exist!
              "However," replied the universe,
            "The fact has not created in me
"A sense of obligation."
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Opportunities and Risks

• Table of Contents
• Definitions of reporting risk opportunities
• Models for Reducing the risk of reporting
• Make reporting more meaningful and reliable
• Five Essential Criteria

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Definitions

• Risk the probability and severity of an
  undesired event resulting from reporting.
• Opportunities are proven chances for advancement
• Performance Measurable results
• Material What is important
• Audit/transaction test Independent documented
  processto determine extent to which reporting
  systems meet audit criteria set by the
  organization and other requirements (ed sic)

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Current Reporting and Verification Trends
Opportunity Risks

1. Standardization Common reporting criteria
2. Consolidation Shake-out of the concepts and
   content
3. Regulation The emergence of government mandates
4. Integration Merging or blended systems

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Opportunity and Risks
System C OSHA, SARA ISO 14001/9001 QC
Managing in the Verge
Operations _at__at__at__at__at_
System B Enhanced Reporting GRI, IMSD, etc.
System A Financial Reporting Accounting
Systems SOX
O X_at_ _at__at__at_X O O XXOOXXXO
OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO
X X X X X XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Integration of management systems and reporting
allows re-combinations and new properties to
emerge
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Reporting Risk Control Framework
Understanding the Business of Reporting
Reporting Requirements
Business Objectives Strategies
Scope of Reporting
Impacts, Hazards, Risks
Understand data generation systems and identify
key risk areas
Understand control systems in place to manage
reporting risks
Identify areas of Residual Risk
Transaction Testing (internal or external)
IMPROVEMENT OPPORTUNITIES
Third-Party Verification
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Opportunities and Risks
Business and stakeholders alike need to find a
way to evaluate what really matters most, and
focus more effort on those areas. Russ
Thornton Director EHS Certification DNV
Certification, Inc. USA
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Reporting Risk Evaluation Model
Deciding what is Material to Report?
Identify all sources of risk and stakeholders
Evaluate risk
Develop plan
Implement plan
No
No
No
No
Treat
Terminate
Tolerate
Transfer
Yes
Yes
Yes
Yes
Identify Work Set Standard (LCA)
Measure Conformance Evaluate results Correct
and change
Eliminate impact(s) or hazard
Divest product or service Insurance
Monitor and Review results
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Opportunity and Risks
What is IMPORTANT (MATERIAL)?
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Five Essential Reporting Criteria
1

• Proper Reporting Boundaries
• Stakeholder consultation
• In line with corporate policy and vision
• Includes all relevant aspects and indirect
  impacts
• Effective processes to include long-term, forward
  looking trends, and reporting cumulative data

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Five Essential Reporting Criteria
2

• Reliability
• Degree of reliability is determined by site level
  reporting
• Data should be evaluated through calculating the
  arithmetic weighted mean (or other method) to
  assess the scores/data from individual sites

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Five Essential Reporting Criteria
3

• Accuracy
• Data collection is integrated with daily
  activities
• Few, if any, procedural or technical errors
• Ambiguity is minimized and performance metrics
  are clear

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Five Essential Reporting Criteria
4

• Comparability
• No. years of performance data
• Future targets
• Re-statements
• Stated in absolute terms, and normalized where
  appropriate
• Use graphics and charts

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Five Essential Reporting Criteria
5

• Neutrality
• Impact and risk analysis performed
• Other indicators (whole picture)
• Indicators factually based and unbiased
• Aggregation done in a manner that does not
  jeopardize strengths or create weaknesses

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Thank you for your kind attention
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