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SECTION A: GENERAL QUESTIONS

  1. What is a carbon audit?

A carbon audit, sometimes referred to as a ’carbon footprint’, is a means of measuring and recording the greenhouse gas (GHG) emissions of an organization or building within a defined system boundary.

  1. What is the status of carbon audit in Hong Kong ?

Climate change is one of the most important challenges facing mankind. Government is embarking upon a series of measures to reduce GHG emissions. These include promoting use of cleaner energy and renewable energy, improving energy efficiency and energy conservation, encouraging greening and raising public awareness.

Being a service economy without any major energy-intensive industries, electricity generation is the major source of GHG emissions in Hong Kong, accounting for over 60% of the total local emissions. The transport sector is the second largest GHG emission source (16%), followed by waste (12%). Among various end uses of electricity, buildings account for some 89% in Hong Kong.

To reduce GHG emissions arising from electricity consumption in buildings, it is believed that an important step which could be taken by owners and managers of buildings is to find out the amount of GHG released to the atmosphere arising from the operation of their buildings and to take appropriate actions to reduce such emissions.

To facilitate carbon audit action, the Environmental Protection Department (EPD) and the Electrical and Mechanical Services Department (EMSD) have drawn up a set of Guidelines to Account for and Report on Greenhouse Gas Emissions and Removals for buildings (Commercial, Residential or Institutional Purpose) in Hong Kong (2010 Edition) (Open new window)。The Guidelines provide a systematic and scientific approach for building owners and managers to account for and report on the GHG emissions arising from the operations of their buildings in Hong Kong, identify areas of improvement and conduct voluntary programmes to reduce and / or offset emissions arising from buildings according to the their own goals. For detail information of carbon audit, please visit:http://www.epd.gov.hk/epd/tc_chi/climate_change/ca_guidelines.html (Open new window)。

  1. What can be done by the listed companies to join the global effort to tackle the climate change issues?

A corporation could look into its carbon footprint, and take appropriate action to minimize its footprint as well as to build up its resilience against climate change so as to join the global effort in tackling the challenges.

  1. Why should listed companies conduct carbon audit?

In order to meet the increasing expectation of the community, including investors or shareholders, some listed companies have/will take actions to conduct carbon audit and reduce their carbon footprint. At the Carbon Audit Workshop in October 2012 organised by the Environment Bureau, there were success stories shared by some listed companies and the guest speakers on how the carbon audit process had helped their companies to quantify GHG emissions generated from their daily operations and helped formulate action plans to tackle GHG emissions. As a matter of fact, some case examples shared by listed companies in Hong Kong have indeed demonstrated the benefits of conducting carbon audit, which include:

a. facilitating identification of appropriate carbon reduction measures;

b. enhancing corporate image;

c. improving operational efficiency; and

d. a direct cost saving (as a result of reducing energy and material consumption).

  1. Why should listed companies disclose GHG emissions?

The expectation from investors and community on corporate social responsibility (whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders) has grown and will to continue to rise. In particular, consumers are also showing increasing interests of purchasing products and services from environmentally responsible companies. It is therefore important for corporations to demonstrate their commitment to the stakeholders in pursuing a low carbon business as well as disclosing their carbon status and efforts in reducing the GHG emissions. This is exemplified by the Environmental, Social and Governance Reporting Guide (ESG Guide) promulgated by Hong Kong Exchanges and Clearing Limited (HKEx) in August 2012. As a recommended practice, the ESG Guide has stipulated the requirements for listed companies to report their GHG emissions and intensity and to describe the measures adopted to mitigate emissions and the results achieved.

  1. How to conduct carbon audit?

To assist the listed companies to conduct carbon audit, the Environmental Protection Department (EPD) and the Electrical and Mechanical Services Department (EMSD) have jointly published the “Guidelines to Account for and Report on Greenhouse Gas Emissions and Removals for Buildings (Commercial, Residential or Institutional Purposes) in Hong Kong”. A number of other organisations, such as WWF, the University of Hong Kong, and Chinese General Chamber of Commerce, have also developed easy-to-use web-based carbon calculators for the purpose of estimating carbon footprint and advising organisations the appropriate actions for reducing your GHG emissions. Listed companies may also consider hire external qualified service providers to help carry out carbon audit for their operations.

Apart from issuance of technical guidelines, the Environment Bureau also organised a Carbon Audit Workshop in October 2012 for all the listed companies in Hong Kong. The Workshop aimed to enable listed companies in Hong Kong to gain better understanding of the carbon audit process, as well as the needs and benefits for implementing effective GHG emission reduction measures. The Workshop was attended by over 300 participants from over 110 listed companies. The Environment Bureau will continue the capacity building process for the business sector. In addition, a free Helpdesk has been setup to handle enquiries and provide technical advice on carbon audit and disclosure to the listed companies.

  1. How to disclose GHG emissions?

To echo the new initiatives stipulated in HKEx’s ESG Guide, listed companies in Hong Kong can choose to disclose their GHG emissions through this website, including the disclosure of GHG emissions data and carbon reduction measures, and any such disclosures may also be referred to in the issuer’s ESG report. Apart from disclosure of GHG emissions, listed companies can also share their success stories relating to their achievements in carbon reduction through this website.

  1. Why does this website only include information of listed companies in Hong Kong?

The Council for Sustainable Development (SDC) in its public engagement exercise report on “Combating Climate Change : Energy Saving and Carbon Emission Reduction in Buildings” published in March 2012 recommended that the Government should encourage carbon audit among general businesses. Specifically, SDC recommended that HKEx should explore how their on-going or new initiatives on Environmental, Social and Governance Reporting Guide (the “ESG Guide”) could further promote carbon audit and environmental or sustainability reporting. In following up the SDC’s recommendations, the Government is therefore taking positive actions to engage listed companies in carbon reduction as a first step. We believe by sharing carbon performance and useful practices of the listed companies at this website, other companies will be more prepared to follow suit.

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SECTION B: TECHNICAL QUESTIONS

  1. On what standards should we base in the carbon report?

The Environmental Protection Department (EPD) and the Electrical and Mechanical Services Department (EMSD) have drawn up a set of “Guidelines to Account for and Report on Greenhouse Gas Emissions and Removals for buildings (Commercial, Residential or Institutional Purpose) in Hong Kong” (The Carbon Audit Guidelines) to provide a systematic and scientific approach to account for and report on the GHG emissions and removals from buildings. You may also make reference to “The Greenhouse Gas Protocol” published by World Resources Institute and World Business Council (WRI / WBCSD) for Sustainable Development; and also the ISO 14064-1 “Specification with Guidance at the Organization Level for Quantification and Reporting of Greenhouse Gas Emissions and Removals” published by the International Organisation for Standardisation (ISO), as the HK’s Carbon Audit Guidelines have been prepared with reference to these internationally recognized protocols.

  1. How to determine the company physical boundaries?

The physical boundaries of the accounting and reporting process usually match the site boundaries of the concerned company, which also covers its subsidiaries. However, the company may elect to exclude specific parts of the company and its subsidiaries and make it clear in the reporting form.

  1. How to determine the operational boundaries?

The operational boundaries comprise identification of those operational activities which will result in GHG emission or removals, classification of these activities into direct and indirection emissions, and determining the scopes of accounting and reporting for indirect emissions. Emissions and removals in relation to the companies can be broadly classified into three separate scopes as:

Scope 1 – direct emissions and removals;

Scope 2 – energy indirect emissions;

Scope 3 – other indirect emissions.

The reporting entity shall document the operational boundaries and shall explain any change or deviation from those adopted in the past.

  1. What are Scope 1 emissions and removals?

The Scope 1 emissions and removals are principally resulted from the activities, including :

(i) combustion of fuels in stationary sources (excluding electrical equipment) to generate electricity, heat or steam;

(ii) combustion of fuels in mobile sources controlled by the reporting entity and dedicated to transport materials, products, waste and employees for the company;

(iii) intentional or unintentional GHG release from equipment and systems;

(iv) assimilation of CO2 into biomass through in additional to those already in existence before the operation of the concerned company;

(v) other physical and chemical processing which will emit or remove GHG emissions in the physical boundary.

  1. What are Scope 2 energy indirect emissions?

The Scope 2 energy indirect emissions are the GHG emissions from the generation of purchased electricity and / or Towngas that is consumed by its controlled equipment or its operations within the physical boundaries.

  1. What are Scope 3 other indirect emissions?

Some typical examples for Scope 3 are methane gas generation at landfill due to disposal of paper waste, GHG emissions due to electricity used for fresh water processing and GHG emission due to electricity used for sewage processing. Other examples may refer to EMSD/EPD’s Carbon Audit Guidelines.

  1. What are the key considerations for choosing quantification methodologies?

The reporting entity should employ quantification methodologies which are well-documented and could reasonably minimize uncertainty and yield accurate, consistent and reproducible results. However, if there is any change of quantification methodologies, the reporting entity shall explain as appropriate. The EMSD/EPD’s Carbon Audit Guidelines provide a simplified quantification approaches to assist the reporting entity to quantify the emissions and removals.

  1. What is ratio indicator?

Ratio indicator is certain operational measuring units to normalize the quantified GHG emissions and removals. Sample operational measuring units are GHG emissions per floor area or GHG emissions per employee.

  1. Can we submit carbon reports which account for only part of our corporate business?

Yes, you can define the specific operational boundaries of a company’s report, depending on the specific business goals and policies of the company.

  1. What is Emission (conversion) Factor? Can we use Emission (conversion) Factors other than Hong Kong’s?

An emission factor describes the amount of GHG emissions resulting from a single unit of an activity. For Hong Kong-based activities, companies are advised to use Hong Kong emission factors. For activities located abroad, location-specific emission factors are more appropriate. The same principles of calculation still apply.

  1. Is independent verification a must for carbon reporting?

Depending on the objectives of the reporting entity, independent verification is advisable. Independent verification provides additional credibility to voluntary carbon reporting.

  1. Can we report our GHG emissions without reporting the company related information?

The company related information is optional. Reporting merely the GHG emissions with company’s information is still useful for GHG inventories.

  1. What are the key information that will be highlighted and displayed in this website?

Key information to be displayed in the front page of this website will be the overall GHG emissions and some basic information of the listed companies. In the subsequent layers, this website will also show the direct and indirect GHG emissions from Scopes 1, 2, and 3 of entities, projects, or facilities, within or beyond Hong Kong, which are submitted to the Environmental Protection Department by filling in the “Summary of Carbon Footprint for Listed Companies” (either hardcopy or online submission).

  1. How can we seek help if we encounter further technical questions relating to the carbon audit process?

The EPD has set up a Helpdesk. You are welcome to seek help from the Helpdesk by using the online enquiry form, email (helpdesk@carbon-footprint.hk) or phone at (852)2594 6579/2594 6292. Listed companies may also consider engaging consultants to help conducting the carbon audit process. For example, listed companies may refer to the “Register of Qualified Service Providers for Energy-cum-carbon Audit Projects” in the website of the Environment and Conservation Fund http://www.building-energy-funds.gov.hk/en/registers/ECA-Projects-Company.html (Open new window).

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