A Guide to Reporting Against Environmental Indicators

Transcription

1 Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators June 2003

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3 Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators June 2003

4 Commonwealth of Australia 2003 ISBN Information presented in this document may be reproduced in whole or in part for study or training purposes or to provide wider dissemination for public response, subject to inclusion of acknowledgment of the source and provided no commercial usage or sale of the material occurs. Reproduction for purposes other than those given above requires written permission from Environment Australia. Requests for permission should be addressed to: First Assistant Secretary Policy Co-Ordination and Environment Protection Division Environment Australia GPO Box 787 Canberra ACT 2601 Disclaimer While reasonable efforts have been made to ensure the contents of this Guide are factually correct, the Commonwealth does not accept responsibility for the accuracy or completeness of the contents, and shall not be liable for any loss or damage that may be occasioned directly or indirectly through the use of, or reliance on, the contents of this Guide. Reference to any company, product or service in this booklet should not be taken as Commonwealth endorsement of that company, product or service. Designed by Racheal Brühn Design Edited by Agile Communications Printed by Paragon Printers

5 Foreword Foreword There is growing recognition that business has a crucial role to play in helping Australia to become more sustainable. As a result many Australian organisations are responding by reducing their environmental impacts and risks, for example by decreasing water use and minimising greenhouse emissions. In addition, a wide range of stakeholders, including the finance sector, are beginning to consider corporate environmental performance in their purchasing and investment decisions, and thus seek robust information on an organisation s environmental performance. A number of leading organisations, both internationally and in Australia, are responding to these opportunities and challenges by measuring, managing and disclosing their environmental performance through the publication of public environmental or triple bottom line reports. These companies are reaping significant benefits such as an enhanced reputation, attracting and retaining staff, and a competitive advantage with customers and suppliers, which of course all add to their financial bottom line. For the last five years the Howard Government, through Environment Australia, has been at the forefront of promoting public environmental and triple bottom line reporting in Australia. With the provision of key publications, such as A Framework for Public Environmental Reporting An Australian Approach, and working cooperatively with industry, we have seen a steady increase in the number of organisations publishing environmental reports, from just one in 1993 to approximately 100 in During this time there have also been a number of international guides released that have contributed to the increased reporting in Australia. Of these, the Global Reporting Initiative s Sustainability Reporting Guidelines enjoys wide industry and government support. Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators builds on these existing guides and complements the Global Reporting Initiative s work by providing Australian organisations with tangible and easy to use methodologies for measuring performance against key environmental indicators. Through this approach, this guide will assist organisations seeking to improve and communicate their environmental performance. With the release of this guide, the Howard Government continues to contribute, at a national level, to the quality and quantity of public environmental and triple bottom line reporting in Australia. I commend this guide to you. Dr David Kemp MP Minister for the Environment and Heritage Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators iii

6 Table of Contents Table of Contents Foreword iii Table of Contents iv Acknowledgements v Part A Why Report on Environmental Performance Chapter 1 About this Guide Purpose of this Guide Who is this Guide for? Relationship with Other Reporting Frameworks How to Use this Guide Chapter 2 Benefits of TBL Reporting Chapter 3 Environmental Indicators, Methodologies and Data Boundary Issues Identifying Stakeholders Identifying and Selecting Environmental Indicators Methodologies Measuring and Presenting Data Part B Detailed Methodologies for Environmental Management and Performance Chapter 4 Environmental Management Indicators Chapter 5 Environmental Performance Indicators Energy 21 Greenhouse Water. 34 Materials Waste Solid and Hazardous Emissions to Air, Land and Water Biodiversity Ozone Depleting Substances Suppliers Products and Services Compliance Appendix A Linking this Guide to the Global Reporting Initiative (GRI 2002) Appendix B Basic Information and Conversion Factors Appendix C Further Information Appendix D Participating Organisations Appendix E Evolution of Triple Bottom Line Reporting Appendix F Feedback Form iv Environment Australia

7 Acknowledgements Acknowledgements Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators was prepared for Environment Australia by Maunsell Australia Pty Ltd. In developing this Guide a number of key resources were utilised, in particular: Environment Australia s A Framework for Public Environmental Reporting. An Australian Approach. The Australian Greenhouse Office s Greenhouse Challenge Factors and Methodologies Workbooks. The National Pollutant Inventory s Industry Handbooks. The Global Reporting Initiative s 2002 Sustainability Reporting Guidelines and reporting protocols. The World Business Council for Sustainable Development s Measuring Eco-Efficiency. A Guide to Reporting Company Performance. The United Kingdom Department of Environment, Food and Rural Affairs guides: Environmental Reporting Guidelines for Company Reporting on Water and Environmental Reporting Guidelines for Company Reporting on Waste. Environment Australia gratefully acknowledge Bendigo Bank and Murray Goulburn Co-Operative Company Limited, who road tested and provided valuable comments on the suitability of the Guide s indicators and methodologies. Environment Australia would also like to thank those organisations and individuals that contributed through the stakeholder workshops and/or by providing comments on the exposure draft. Appendix D contains a list of contributors. Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators v

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9 Part A Why Report on Environmental Performance Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 1

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11 Chapter 1 About this Guide Increasingly, organisations around the world are recognising the value of demonstrating transparency and accountability beyond the traditional domain of financial performance. This trend has come about through increased public expectations for organisations to take responsibility for their non-financial impacts, including impacts on community and the environment. In response, business, government, academics and Non Government Organisations (NGOs) have begun developing frameworks addressing these concerns. These frameworks aim to extend voluntary disclosure to include impacts on natural and human capital, as well as financial capital. Triple Bottom Line (TBL) reporting is becoming an accepted approach for organisations to demonstrate they have strategies for sustainable growth. It focuses on decision-making and reporting which explicitly considers an organisation s economic, environmental and social performance. As such, TBL can be seen as both as an internal management tool, and an external reporting framework. This Guide is one in a series of three produced by the Commonwealth Government to assist with TBL reporting. Guides providing information on social 1 and economic 2 indicators are also available. Purpose of this Guide This Guide is intended to support voluntary reporting on environmental performance by organisations in Australia. It does not represent a step towards regulation of TBL reporting in Australia. It aims to provide: Guidance on selecting suitable environmental indicators. Simple methodologies, which where possible incorporate existing Australian initiatives and enable organisations to determine performance in relation to selected indicators, and are consistent with the Global Reporting Initiative s environmental indicators. Links to other resources to assist with preparing TBL reports. Who is this Guide for? The target audiences for this Guide are managers in business, community and government wishing to improve the environmental performance of their organisations. It is generally applicable across all industry sectors, and particularly assists organisations wishing to introduce TBL reporting for the first time. However, it also includes useful information for experienced reporters, and organisations which are introducing stand-alone environmental performance reports. This Guide recognises organisations will have different priorities and methods for environmental reporting, and therefore presents a range of indicators and information to accommodate a broad spectrum of needs. 1 The social indicators guide is expected to be available in August The economic indicators guide is expected to be available in Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 3

12 Relationship with Other Reporting Frameworks The Global Reporting Initiative This Guide is aligned to the Global Reporting Initiative (GRI), which provides social, environmental and economic indicators at an international level. The GRI has emerged as the internationally accepted framework for sustainability reporting and is widely supported by Australian organisations, making it suitable as a basis for this Guide. Founded by the Coalition for Environmentally Responsible Economies (CERES), the GRI is an official collaborating centre of the United Nations Environment Programme (UNEP), which, since its first publication in 2000, has focused on assisting reporting organisations and their stakeholders in articulating their overall contribution to sustainability through the Sustainability Reporting Guidelines. These guidelines were updated and launched at the September 2002 World Summit on Sustainable Development. Developed through a multi-stakeholder process, they define an international voluntary reporting framework for TBL performance. Other Guidelines In addition to the GRI, a wide range of initiatives and structures exist within Australia to assist organisations on disclosing environmental performance to stakeholders. This Guide aligns with these initiatives, which cover both quantitative and qualitative reports and includes: Voluntary public environmental reporting initiatives (both national and international). Mandatory environmental reporting requirements (for example the National Pollutant Inventory (NPI) and State licensing regimes). Australian and international Accounting Standards. Corporate governance initiatives. This Guide is designed to complement the GRI and initiatives that assist Australian organisations to report non-financial performance. Complementary projects in train or recently completed include: Environment Australia s A Framework for Public Environmental Reporting, an Australian Approach a step-by-step guide to reporting specifically tailored to meet the needs of Australian organisations, which is available online from The Group of 100 s Sustainability: A Guide to Triple Bottom Line Reporting aimed at providing senior executives with a high level understanding of TBL reporting. It can be ordered online from A statement from Commonwealth Government, business and community representatives on the value of Corporate Social Responsibility and TBL practices for Australia. This statement is an initiative of the Prime Minister s Community Business Partnership and is expected to be available in August 2003 and will be available online from A Guide to Social Indicators and Methodologies, prepared by the Commonwealth Department of Family and Community Services and expected to be released in August 2003 and will be available online from A Guide to Economic Indicators and Methodologies, prepared by the Commonwealth Department of Family and Community Services and expected to be released in 2004 and will be available online from 4 Environment Australia

13 Chapter 1 How to Use this Guide The adoption of TBL reporting will vary according to each organisation, based on individual needs and expertise. Adoption will also be influenced by an organisation s understanding of its social, environmental and economic impacts. As such, many organisations commit to TBL reporting on an incremental basis and progressively report on their impacts in these areas. Appendix A shows the links between the environmental performance indicators contained in this Guide and the corresponding GRI indicators. Some minor deviations from the GRI have been adopted to address Australian conditions, or in response to stakeholder feedback. Globally, much debate remains on how to actually measure and report TBL performance. This has been influenced by differing interpretations of terms, varying needs, cultural impacts and organisational imperatives. While the GRI provides an internationally accepted guide, it does not yet provide methodologies for many of its indicators, nor does it take into consideration specific Australian conditions, particularly in relation to established indicators and methodologies. This Guide aims to assist Australian organisations by providing appropriate background, relevant information and methodologies for the GRI s set of environmental indicators. This structure of this Guide is: Part A Why Report on Environmental Performance Chapter 1 About this Guide Chapter 2 Benefits of TBL Reporting Chapter 3 Environmental Indicators, Methodologies and Data Part B Detailed Methodologies for Environmental Management and Performance Chapter 4 Environmental Management Indicators Chapter 5 Environmental Performance Indicators Appendices Appendix A Linking this Guide to the Global Reporting Initiative (GRI 2002) Appendix B Basic Information and Conversion Factors Appendix C Further Information Appendix D Participating Organisations Appendix E Evolution of Triple Bottom Line Reporting Appendix F Feedback Form Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 5

14 2 Chapter Benefits of TBL Reporting This Section outlines some of the benefits TBL reporting can achieve. It covers all three areas of the TBL social, environmental and economic rather than just environmental reporting. This has been done as there are strong synergies and benefits in undertaking an integrated approach. Rationale Reporting on financial performance may be considered as being limited in accurately representing market performance. Consequently, there is a growing need for further balanced and enhanced non-financial disclosure. In recent years, TBL-based reporting has become a vehicle for such disclosure, based on the premise that by monitoring and reporting social, economic and environmental performance, organisations can better prepare for future challenges and opportunities, including those traditionally considered intangible, such as reputation. For TBL reporting to be of real value to an organisation, it must be integrated into day-to-day business operations and be appropriately resourced. Organisations which have successfully driven change as a result of TBL reporting have identified the following benefits: Embedding sound corporate governance and ethics systems throughout all levels of an organisation. Currently many corporate governance initiatives are focused at the Board level. TBL helps ensure a values-driven culture is integrated at all levels. Improved management of risk through enhanced management systems and performance monitoring. This may also lead to more robust resource allocation decisions and business planning, as risks are better understood. Formalising and enhancing communication with key stakeholders such as the finance sector, suppliers, community and customers. This allows an organisation to have a more proactive approach to addressing future needs and concerns. Attracting and retaining competent staff by demonstrating an organisation is focused on values and its long-term existence. Ability to benchmark performance both within industries and across industries. This may lead to a competitive advantage with customers and suppliers, as well as enhanced access to capital as the finance sector continues to consider non-financial performance within credit and investment decisions. There is growing evidence to suggest that over time these benefits do contribute to the increased market value of an organisation. 6 Environment Australia

15 International Trends in Reporting The number of organisations worldwide producing reports containing environmental performance information continues to grow, particularly amongst larger organisations. The recent KPMG survey found that 45 percent of the world s top 250 companies now publish a separate corporate report with details of environmental and/or social performance, up from 35 percent in The survey found the incidence of reporting varies markedly across the world. Of the top 100 companies in each of 19 countries surveyed, Japan has the highest percentage of companies producing corporate environment or social reports (72 percent), followed by the UK (49 percent), USA (36 percent) and the Netherlands (35 percent), with Australia ranked 12th on 14 percent. Whilst direct comparison is difficult due to the different make up of the various countries top 100 companies, this data suggests that Australian companies may be missing out on the significant organisational gains potentially achieved through reporting. The report concludes that good environmental stewardship and social responsibility are clear examples of good management and there is no disputing the clear link between good management and business performance. Source: KPMG Global Sustainability Services KPMG International of Corporate Sustainability Reporting Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 7

16 3 Chapter Environmental Indicators, Methodologies and Data Effective TBL reports contain environmental performance information that is relevant, meaningful and accurate. They should also contain environmental performance information that is relevant from an investor s perspective. Accordingly, this Chapter has the following sections: Boundary Issues Identifying Stakeholders Identifying and Selecting Environmental Indicators Methodologies Measuring and Presenting Data Boundary Issues Defining boundaries for the purposes of environmental performance measurement is an important part of the TBL reporting process. It is typical to define the scope of TBL practice as including operations over which an organisation has control or influence. Whilst this is straightforward in many cases, it is less clear for organisations which outsource operations, use contractors extensively, have joint ventures, or numerous tenants. Although there is no single approach for determining reporting boundaries, it should be noted that to remain credible, it may be necessary to consult stakeholders to assess how they perceive the reporting boundaries of an organisation. For example, manufacturing businesses must decide whether to address impacts upstream or downstream from the factory gate in their TBL reports. A strong case could be made for including product distribution activities on the basis they may cause significant environmental impacts. In considering where to set reporting boundaries, many organisations report on the basis of management control. For example, an organisation might choose to report 100 percent of the environmental performance of operations it exerts direct control over (even though it may not be the only owner), and choose not to report environmental performance of joint ventures where it is not the operator. Alternatively, an organisation may choose to report its environmental performance based simply on its equity interest in joint ventures, irrespective of whether it is the operator or not. It is critical the boundaries adopted for purposes of reporting are clearly defined and obvious to readers of reports. Careful boundary definition also ensures a report can be verified and meaningful comparisons can be made between information from different reporting periods. Organisations undertaking environmental reporting for the first time often scope their initial report narrowly, with the aim of broadening reporting boundaries over time as experience develops. 8 Environment Australia

17 Identifying Stakeholders Prior to selecting indicators, it is essential an organisation considers who they are preparing the report for, that is, who are their key stakeholders? In identifying stakeholders (remember to include internal players) an organisation should consider: Who is impacted or interested in the organisations activities? Of those impacted or interested by the organisation s activities, whose opinion is a priority? Who currently receives reports or information on activities of interest? Whose information needs are not being met by current reporting activities? There are many approaches to stakeholder engagement and consultation. Although these topics are beyond the scope of this Guide, further references and discussion can be found at: The Global Reporting Initiative s 2002 Sustainability Reporting Guidelines, available online from Environment Australia s A Framework for Public Environmental Reporting. An Australian Approach, available online from The Institute of Social and Ethical AccountAbility s AA1000 Assurance Standard, available at Identifying and Selecting Environmental Indicators Indicators are critical to the success of environmental monitoring and reporting as they provide the basis for objective performance assessment. This Guide provides a means to identify trends, and to make comparisons between operational sites and between organisations. Indicators in this Guide have been broadly classified as environmental management indicators and environmental performance indicators. Management indicators provide information on the adequacy of management processes. Environmental performance indicators address process inputs and outputs, and describe environmental quality. It is desirable to include a blend of management indicators and environmental performance indicators in a TBL report. This allows the practical environmental performance to be assessed in conjunction with information on management processes. Environmental Management Indicators Management indicators are particularly valuable as they are forward-looking or lead indicators that can provide a basis to forecast future performance. For example, an organisation that has a process to identify environmental risk issues is likely to establish control measures addressing significant matters. Chapter Four of this Guide presents five management indicators. These indicators broadly correspond to the report content recommendations outlined in the GRI s 2002 Sustainability Reporting Guidelines. For a full list of these indicators, see page 14. Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 9

18 Environmental Performance Indicators The GRI environmental performance indicator set has been used as the starting point for the environmental performance indicators contained in this Guide. The GRI indicators are underpinned by a substantial body of work in environmental measurement, and have widespread industry support. Strong support for the GRI framework was reflected by Australian stakeholders during the development of this Guide. In some cases, GRI indicators have been modified to incorporate features of Australian legislation, or to reduce their complexity. Appendix A presents a Table showing correspondence between environmental performance indicators in this Guide and those proposed in the GRI Guidelines. This Guide groups environmental performance indicators into 11 separate environmental issues categories. For a full list of these categories, see Chapter Five of this Guide, page 20. These 11 categories are considered relevant to a wide range of stakeholders and each category may indicate material risks or opportunities to a company s shareholder value. Within the various environmental issue categories, the indicators are classified as either core or additional. Core indicators are the most important measures of performance. Additional indicators include measures that can provide a more complete picture of environmental performance in relation to specific issues that require greater levels of information. The decision to report using these additional indicators depends on an organisation s individual circumstances. Whilst environmental issues of importance vary between organisations depending on the nature of activities, it is recommended that first-time reporters begin by working with environmental management and environmental performance indicators relevant to their particular organisation. To ensure that indicators selected are appropriate, organisations should review the categories in the light of known environmental risks and knowledge of stakeholder needs. Where a report does not include information on a core indicator, either due to a lack of available data or because the indicator has little relevance to the organisation, it is recommended a clear rationale explaining why it is omitted is provided to readers. Selecting Environmental Indicators Reporting against a large number of indicators does not necessarily enhance or improve overall TBL performance. A more suitable approach is to report on a small number of relevant indicators and demonstrate performance improvements. An organisation may also want to ensure it is not just collecting data for the sake of being able to collect it. To check the suitability of indicators, consider asking internal and external stakeholders the following: What is of key importance to stakeholders? Which environmental issues will impact how we do business tomorrow? Which risks are relevant to how an organisation operates within the present, as well as the future context? What can we collect data on, and what comparative data is available? Note that the importance and materiality of indicators may change over time and hence management need to monitor emerging trends and potential reporting needs. For further discussion on materiality and the process for identifying specific risks, consider reviewing the report compiled by the Association of 10 Environment Australia

19 Chapter 3 British Insurers (ABI), Investing in Social Responsibility Risks and Opportunities, which is available online at Indicators can reflect past performance, or predict future performance. Ideally, TBL reports will contain a combination of both. This enables report users to understand past performance and to broadly assess the future outlook. Methodologies This Guide contains simple methodologies to enable an organisation to measure its performance in relation to the various environmental performance indicators. The methodologies are largely based on existing national and international methods, protocols, and guidelines for environmental performance measurement. Wherever possible, methodologies developed or widely used in Australia have been adopted. Some methodologies have been slightly modified to reduce their complexity and increase their accessibility. To minimise duplication of effort, current environmental reporting activities of Australian organisations have been recognised. These include voluntary reporting programs, such as the Greenhouse Challenge, and mandatory reporting requirements under environmental laws. For example the methodology for calculating emissions to air, water and land is based on the framework for the National Pollutant Inventory. Whilst it is recommended that organisations use the methodologies provided in this Guide, it is recognised that in some cases, alternative methodologies exist for calculating environmental performance. Methodologies used should be carefully documented to ensure measurements are repeatable and able to be verified, regardless of whether they are sourced from this Guide or from an alternative source. Measuring and Presenting Data Key points to consider when measuring and presenting data include: Period Covered Data Measurement and Verification Data Presentation. Period Covered Reporters should clearly specify in a report the period of data they are reporting on. At present organisations report across varying time periods, ranging from calendar years to annual financial reporting periods. Data for the full period should be included and where omitted should be specifically identified. Should an incident or event occur post-reporting period, it may warrant disclosure in the report to ensure that performance is accurately represented. This may include events such as an accident, merger or acquisition. Data Measurement and Verification With the majority of environmental performance indicators there are definitional questions that must be addressed to ensure that measurement is repeatable and consistent. This Guide defines key terms associated with each indicator to provide clarity for reporters. These are only advisory definitions. The reporter may use an alternative definition if required, but should clearly disclose this variation to readers. Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 11

20 Organisations may not have access to all of the information required to precisely calculate performance in relation to relevant indicators. Assumptions and estimates may be required, based on the best available information. In these cases, assumptions and estimates should be noted in the report. Verification Independent verification of TBL reports is increasingly sought by organisations to provide assurance to stakeholders. Verification of environmental reports can be conducted by a variety of organisations, ranging from accounting firms and major engineering consultancies, through to smaller social and environmental consultancies. The level of verification sought by an organisation will influence the systems used to collect and report data. It is therefore important to ensure the data systems used are suitable for the level of verification being sought. Currently, no generally accepted standards exist relating to verification of TBL reports, and details on the various methods available are outside the scope of this Guide. Detailed information on verification is included in the following documents: The Global Reporting Initiative s 2002 Sustainability Reporting Guidelines, available online from Environment Australia s A Framework for Public Environmental Reporting. An Australian Approach, available online from The Institute of Social and Ethical AccountAbility s AA1000 Assurance Standard, available at Data Presentation There are many ways to present environmental data. Absolute data is raw performance data collected in absolute figures in a variety of different units. It is important that data is presented in TBL reports in absolute terms, as this provides the reader with an understanding of the overall scale of an organisation s environmental impacts and contributions in a regional or global context. Often data becomes more meaningful when related to other data. In particular, it is useful to present data in a normalised form. Normalised data, also termed eco-efficiency or intensity ratios, expresses some measure of output (product or service value) in relation to a measure of environmental impact, for example, kilograms of product produced per litre of water used. Data presented in this way brings together the dimensions of product or service value, and environmental impact. Normalised data allows an organisation to show it is using resources more efficiently, or reducing pollution per unit of production. Where the range of product and services delivered by an organisation varies from year to year, these variations will need to be taken into account when presenting data in a normalised form. Additional information on normalised data can be found in the World Business Council for Sustainable Development s guide, Measuring eco-efficiency. A Guide to Reporting Company Performance, available online at It is also recommended that where possible, an organisation shows trends by reporting previous data and document targets against relevant indicators for the next reporting period. 12 Environment Australia

21 Part B Detailed Methodologies for Environmental Management and Performance Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 13

22 4 Chapter Environmental Management Indicators Introduction Environmental Management indicators help an organisation provide information on how it manages any environmental impacts of its operations, products and services. They indicate its capacity to monitor and control material environmental risks, and to capitalise on market opportunities arising from effective environmental management. Environmental Management indicators are particularly valuable as they are forward-looking or lead indicators that can provide a basis for future performance forecasts. For example, an organisation that sets environmental objectives and targets is likely to show improvement in relation to environmental performance indicators (for example, energy, water and waste), as the management process is evidence of planning and resource allocation. The indicators presented below broadly correspond to the report content recommendations outlined in the Governance Structure and Management Systems in Part C, Section Three of the GRI s 2002 Sustainability Reporting Guidelines. Indicators Indicator Description Type GRI Reference Page Environmental Management 1 Environmental Management Core GRI Guidelines 2002, Part C 15 System (EMS) Conformance Section 3 Governance Structure and Management Systems Environmental Management 2 Environmental performance Core GRI Guidelines 2002, Part C 16 improvement process Section 3 Governance Structure and Management Systems Environmental Management 3 Integration of environment Core GRI Guidelines 2002, Part C 17 with other business Section 3 Governance Structure management systems and Management Systems Environmental Management 4 Due diligence processes Additional GRI Guidelines 2002, Part C 18 Section 3 Governance Structure and Management Systems Environmental Management 5 Environmental liabilities Additional GRI Guidelines 2002, Part C 19 Section 3 Governance Structure and Management Systems 14 Environment Australia

23 CORE Environmental Management Indicator 1: Environmental Management System (EMS) Conformance Background and Rationale This indicator provides information on how an organisation can report any certifications or compliance it has for Environmental Management Systems. Certification provides external stakeholders with a high level of assurance that an organisation s Environmental Management Systems are robust and functional. Organisations with certified systems should provide details of the business units or elements of their operations covered by certification. The Environmental Management System Standard ISO is widely recognised as an effective framework for environmental management. Whilst many organisations are aligning their environmental management systems with ISO 14001, not all are seeking to have systems certified. Organisations should report details of the business units or sites covered by management systems consistent with ISO Claims regarding management system alignment should only be made where they can be verified with documentation. Organisations may subscribe to industry environmental codes such as the Mineral Council s Code of Environmental Management, the Electricity Supply Association of Australia s Code of Environmental Practice and the Chemical Industry s Responsible Care Program. Organisations should report on an organisation-specific basis outlining the code(s) to which they subscribe and their current compliance status, using the methodologies developed or endorsed by the respective industry associations. Possible Information to Report Status of environmental management system by business unit or operational site, for both systems that are in compliance and certified. Details of environmental management system audit programs. Details of programs for environmental management system development and implementation. Details of conformance with relevant industry environmental codes or standards. Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 15

24 CORE Environmental Management Indicator 2: Environmental Performance Improvement Process Background and Rationale This indicator provides information on how an organisation can identify and assess initiatives it has to enhance its environmental performance, and demonstrate its commitment to continual improvement. TBL reports should describe internal processes for identifying and assessing environmental risks to provide confidence to stakeholders that significant matters have been identified, and are being appropriately managed. Objectives and targets in relation to priority environmental issues should also be presented in TBL reports. The existence of objectives and targets indicate an organisation s commitment to performance improvement. They also provide a focus for the allocation of financial and human resources, and provide evidence that environmental management planning has been completed. An organisation s willingness to report progress in relation to objectives and targets illustrates an ongoing commitment to continual improvement. It also demonstrates accountability for environmental performance and a commitment to managing environmental risks and meeting legal and other obligations. Possible Information to Report Details of processes for identifying and assessing environmental risks and opportunities. Objectives and targets relating to priority environmental issues. Progress relating to commitments for action on environmental issues outlined in previous reports or statements. 7 Environment Australia

25 Chapter 4 CORE Environmental Management Indicator 3: Integration of Environment with other Business Management Systems Background and Rationale Increasingly, organisations are seeing the benefits of a cross-functional approach to management. Integrating environmental management systems with core business systems ensures decision-making is informed by relevant environmental information. The degree to which an organisation has successfully embedded environmental management within its corporate structure and day-to-day operations has a bearing on its capacity to identify and address risks and opportunities associated with environmental issues. Possible Information to Report Information on organisational and Board structures showing that environmental management is approached as a mainstream business issue. Details of how environmental considerations are built into core business processes, such as product and service design, procurement, and human resource management. Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 17

26 ADDITIONAL Environmental Management Indicator 4: Due Diligence Processes Background and Rationale Providing information on due diligence processes indicates an organisation s capacity to address business risk issues associated with mergers, acquisitions, divestments and closures. In particular, these processes will include environmental factors associated with these activities that may have a significant financial impact. Whilst recognising due diligence activities by their nature involve legally and/or commercially sensitive information, organisations involved in significant mergers, acquisitions, divestments and closures should consider disclosing summary information regarding the scope of the due diligence reviews undertaken in relation to such transactions. Possible Information to Report Details of key mergers, acquisitions and divestments during the reporting period, along with brief descriptions of the due diligence processes undertaken for each. Summaries of material environmental risk issues arising from mergers and acquisitions. 18 Environment Australia

27 Chapter 4 ADDITIONAL Environmental Management Indicator 5: Environmental Liabilities Background and Rationale Environmental liabilities are important indicators for stakeholders, particularly analysts and investors trying to determine current and future obligations which may impact upon business sustainability and profitability. Environmental liabilities arise when an organisation has specific obligations to rehabilitate or repair environmental damage (or prevent or reduce environmental damage). These obligations can be either legal or contractual, or can arise due to public commitments an organisation makes when it accepts responsibility for remedying environmental damage. Resource companies, for example, are required to provide progressive provisions over the life of a resource to cover the costs of closure, removal of fixed assets and site rehabilitation. Such provisions can include current liabilities (relating to the current financial reporting period) and non-current liabilities (relating to future financial periods). Organisations with known environmental liabilities are obliged to report them within their annual financial statements. Consequently, environmental liabilities disclosed in TBL reports should be based on information presented in financial statements, or should refer readers to the appropriate sections of those statements. Where future liabilities have been identified but are not accurately known, (for example, where uncertainties exist in the timing and/or the magnitude of rehabilitation and clean-up costs) they are regarded as contingent liabilities. Even though contingent liabilities are not recognised in the balance sheet, they should be disclosed in the notes of annual financial statements. Where known environmental liabilities will not be realised in the near future, organisations may report clean-up or rehabilitation liabilities as either the current estimated cost or the discounted present value. Generally Accepted Accounting Principles and Accounting Standards issued by the Australian Accounting Standards Board (AASB) provide direction for organisations on reporting consolidated financial statements, including appropriate treatment of environmental liabilities. As the accounting requirements for environmental liabilities are still evolving, it is recommended organisations include liabilities in their TBL reports to ensure information is consistent with their financial statements, and that these in turn conform to current Standards. Possible Information to Report Details of known material liabilities associated with matters such as site clean-up, rehabilitation and litigation. Details of environmental issues with the potential to result in material liabilities. Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 19

28 5 Chapter Environmental Performance Indicators Introduction Environmental Performance indicators help an organisation calculate and report on the impact its operations have on the environment, including flora, fauna, land, air and water. Environmental performance indicators provide a framework to present environmental performance information in a consistent, comparable and understandable format. The GRI environmental performance indicator set has been used as the basis point for environmental performance indicators contained in this Guide. As the GRI indicators are underpinned by a substantial body of work in environmental measurement, and have widespread industry support, they provide a solid foundation for this Guide. Consultation with Australian stakeholders during the development of this Guide also confirmed strong backing for the GRI framework. In some cases, the GRI indicators have been modified to incorporate features of Australian legislation or to reduce their complexity. To see the correspondence between environmental performance indicators in this Guide, and in the GRI Guidelines, see Appendix A. The Environmental Performance Indicators within this Guide address the following key environmental issues: Energy Greenhouse Water Materials Waste solid and hazardous Emissions and discharges to air, land and water Biodiversity Ozone-depleting substances Suppliers Products and services Compliance 20 Environment Australia

29 Energy Background and Rationale Energy is fundamental to most activities and processes in modern industrial societies. Energy use and environmental impacts are closely linked, with the extraction, transport and use of fuels, and generation and transmission of electricity affecting the environment on global, regional, and local levels. As the environmental impacts associated with energy use and extraction become more apparent, greater emphasis is being placed on efforts to optimise the use of non-renewable resources and minimise environmental impacts, whilst maintaining economic productivity. Using energy efficiently makes economic and environmental sense. Energy efficient organisations can realise economic savings, and simultaneously help preserve non-renewable resources and protect the environment. Determining an organisation s energy use can often lead to identifying efficiency improvement opportunities. This information allows managers to focus attention on the principal areas of energy consumption to maximise return on effort. Australian Context Australia's non-renewable energy reserves include oil, coal and natural gas. These reserves are large when compared to the nation s annual energy use. In the future, the use of these non-renewable resources may be constrained more by environmental impacts of extraction and consumption, rather than availability. Australia is facing a decline in crude oil production over the next decade. Without new discoveries, liquid fuel self sufficiency is predicted by Geoscience Australia to decline from about 85 percent in 2001, to less than 40 percent in To improve environmental outcomes, a range of government initiatives are reducing the greenhouse intensity of energy supply, and increasing the efficiency of energy use. For example the national Mandatory Renewable Energy Target (which requires electricity suppliers to produce an additional 9500 GWh (approximately 2 percent) of their electricity from renewable sources by 2010) and industry development strategies, mean renewable energy is expected to play an increasing role in future energy supplies. On the demand side, national programs such as Minimum Energy Performance Standards, which improve the efficiency of standard electrical appliances with overall net savings to consumers, are improving the efficiency of energy use. Facts and Figures The total amount of energy consumed in Australia during was 4,810 petajoules, a rise of 61 percent from This reflects the growth of both the Australian population and the national economy. In , fossil fuels accounted for 94 percent, or 4,541.8 petajoules, of energy consumed in Australia. The amount of energy used per capita increased by 24 percent from 209 gigajoules in to 258 gigajoules in Source: ABS Australia s Environment: Issues and Trends Catalogue number Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 21

30 Energy Indicators Indicator Description Units Type GRI Equivalent Page Energy 1 Direct Energy Use Joules or multiples Core EN3 Direct Energy Use 22 of Joules (kj, MJ etc) segmentedby primary source Energy 2 Indirect Energy Use Joules or multiples Additional EN4 Indirect energy use 24 of Joules (kj, MJ etc) Energy 3 Initiatives to use renewable Not applicable Additional EN17 Initiatives to use 25 energy sources and increase renewable energy sources energy efficiency and increase CORE Energy Indicator 1: Direct Energy Use (joules or multiples of joules) This indicator provides information on how an organisation can calculate the financial cost of its energy consumption for specific activities. This information can be used to identify opportunities to improve efficiency of energy use and monitor the effectiveness of energy efficiency initiatives. Methodology Direct energy use is the energy consumed by an organisation to perform its day-to-day activities. It includes energy from fossil fuels, purchased electricity and renewable sources, but does not include energy sold by the organisation for use by others. There are other potential contributors to direct energy use, such as the purchase of steam from a neighbouring factory, which are applicable to a small number of organisations. Methodologies for calculating these sources of energy are not included in this Guide. Please refer to the further information found at the end of this Section for suitable methodologies. Energy use associated with staff travel by aircraft or train is not addressed in the methodology, as the emissions factors needed for such calculations are not readily available. Organisations taking steps to reduce staff travel may wish to report these initiatives under indicator Energy 3: Initiatives to use renewable energy sources and increase energy efficiency. Direct energy used should be reported in absolute terms (for example, kilojoules, megajoules etc.) and in normalized form to enable tracking and assessment of energy use. Direct energy use = energy from fossil fuel use + electricity purchased from suppliers + energy from renewable sources energy provided to other organisations (if applicable) Fossil Fuels Fossil fuels include petrol, diesel, natural gas, LPG, black and brown coal, oil, kerosene and aviation gasoline. Fossil fuel will either be purchased from a supplier or sourced internally. The quantities of fossil fuels purchased during the reporting period can be determined by reviewing invoices from suppliers in conjunction with fuel inventory information. 22 Environment Australia

31 Chapter 5 Fossil fuels such as natural gas and petroleum products may be piped to site. In these cases the amount used can be determined by reading the appropriate meters. Where fossil fuels are obtained from sources owned or managed by the organisation, extraction or transport records may be used to determine the quantities used. Alternatively, process flow rates may be used to estimate throughput. Fossil fuels also include petroleum products purchased for transport requirements, such as distributing products, providing the transport is directly related to the operations of the reporter (staff travel to work would not usually be included). Receipts for purchased fuel can also provide accurate fuel consumption rates. If direct consumption volumes are unavailable, then travel logs providing distances travelled can be combined with vehicles fuel efficiency, to calculate fuel used for transport. The amount of fossil fuel used should be converted to the quantity of energy consumed in kilojoules. This can be achieved by multiplying the quantity of fuel consumed by the corresponding calorific value of the fuel (its raw energy content). Calorific values for a range of fuels can be obtained from the Emissions Estimation Techniques Manual for Aggregated Emissions from Fuel Combustion publication, available online from the National Pollutant Inventory (NPI) at and Table 5 of the National Pollutant Inventory Guide Version 2.13 at npiguide2-13.pdf. Please note that calorific values are regularly updated as new information becomes available. Electricity Invoices from electricity suppliers will contain details of the amount of electricity purchased. Electricity invoices usually list usage in kwh (kilowatt hours). To convert kilowatt hours to kilojoules, multiply the number of kilowatt hours by Renewable Energy When power is produced from renewable sources controlled by a reporting organisation (for example, solar or wind power) the energy used from these sources should be quantified. This can generally be determined by reviewing load or design specifications for a plant. Example Farm Direct is a supermarket chain operating stores throughout New South Wales and Victoria. The company uses electricity for lighting and refrigeration, fuel for transport (diesel and petrol), and natural gas for heating. The company s electricity and gas bills show it uses 34,440 kwh of electricity and 100 GJ of natural gas for space heating across its network of stores and offices during its annual reporting period. From fuel receipts and accounts, Farm Direct knows that 100,000 litres of diesel fuel was consumed during the year for transporting goods, and 20,000 litres of petrol was used by fleet vehicles and forklifts. Direct energy use calculations are shown in the Table following. Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 23

32 Energy Use Information Annual Convert Energy Used Convert Direct Source Amount to Energy (relevant to GJ Use (GJ) (relevant unit) Used energy unit) Energy Electricity Lighting Retailer bills 34,440 kwh x ,984,000 KJ /1,000, and refrigeration (KWh to KJ) Natural Gas Heating (VIC) Retailer bills 60 GJ 100 Heating (NSW) 40 GJ Fuel 1 Receipts and 20,000 litres Petrol accounts 100,000 litres x ,000 MJ /1, Diesel information x ,820,000 MJ /1, Total 4,732 1 Densities and calorific values of petrol, diesel and other common fuels are available in Table 5 of the NPI Guide V 2.13 To track energy use efficiency, Farm Direct chooses to report the data in normalised form as revenue ($) per gigajoule (GJ) of direct energy used. As Farm Direct s revenue for the reporting period was $21.2M, the normalised value is calculated as follows: Revenue generated per unit of direct energy use = $21,200,000/4732 GJ = $4,480 per gigajoule of direct energy ADDITIONAL Energy Indicator 2: Indirect Energy Use (joules or multiples of joules) This indicator provides information on how an organisation can calculate and present information relating to the energy its energy suppliers consume to produce the energy the organisation actually uses. In Australia, methodologies for calculating indirect energy use in relation to electricity are well developed. However other sources of indirect energy are not readily available, such as natural gas and fuel. Consequently, indirect energy is defined in this indicator as the energy consumed to produce and transmit the electricity used by an organisation. In combination with direct energy use (Energy Indicator 1: Direct Energy Use), this indicator allows management and stakeholders to compare energy use between organisations. It also provides a basis for organisations to reduce indirect energy use by purchasing green power or electricity derived from sources and technologies that have less environmental impact. 24 Environment Australia

33 Chapter 5 Methodology Indirect energy use is the energy used to produce and deliver electricity. An understanding of the source and method used to generate purchased electricity is required to calculate indirect energy use. Electricity generation efficiency factors exist which are specific to the facilities used to generate the electricity. Indirect energy used should be reported in absolute terms (for example, joules) but also in normalized form to enable energy intensity to be tracked and assessed. Indirect energy use = electricity purchased from suppliers/electricity generator efficiency Electricity generator efficiencies can be obtained by either contacting your energy retailer, or visiting the Australian Greenhouse Office web site at The electricity generator efficiency factors for each State and Territory, available through the above reference, make allowance for energy losses during transmission. Where electricity is purchased from renewable sources, indirect energy is considered to be negligible for the purposes of reporting. Example Farm Direct, a supermarket chain, calculates that its total annual electricity use throughout all its stores is 124 GJ. It contacts its electricity retailer and is informed that the supplier s electricity efficiency factor is 55 percent. Hence, to produce 1 GJ of electricity, fuel containing 1.8 GJ of energy was combusted. Indirect energy use = 124 GJ / 0.55 = GJ Therefore GJ of energy was expended by the supplier to deliver 124 GJ of electricity for use by Farm Direct. To track indirect energy use efficiency, Farm Direct also reports the data in normalised form as revenue ($) per gigajoule (GJ) of indirect energy used. As Farm Direct s revenue for the reporting period was $21.2M, the normalised value is calculated as follows: Revenue generated per unit of indirect energy consumed = $21,200,000/225.5 GJ = $94,055 per gigajoule Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 25

34 ADDITIONAL Energy Indicator 3: Initiatives to use Renewable Energy Sources and Increase Energy Efficiency This indicator provides information on how an organisation can describe projects and programs it has developed and implemented to use renewable energy sources where possible, and to decrease its overall energy consumption. Possible Information to Report Initiatives that increase the proportion of energy obtained as green power or from renewable sources. Cogeneration projects. Energy conservation programs. Initiatives to track and reduce energy use. Energy efficiency improvements. FURTHER INFORMATION ON ENERGY INDICATORS AND METHODOLOGIES The energy indicators and methodologies within this Guide are closely aligned with the GRI Energy Protocol. The Protocol contains further details and techniques for measurement of energy consumption and is available online at 26 Environment Australia

35 Chapter 5 Greenhouse Background and Rationale The atmosphere surrounding the earth is composed of a mixture of gases. Some of the gases such as water vapour, carbon dioxide and methane are known as greenhouse gases because of their capacity to trap heat, leading to warming of the lower atmosphere. This natural process maintains the warm conditions needed on earth to sustain life. Human activities (for example, burning of fossil fuels, land clearing) over the past 200 years have led to an increased concentration of greenhouse gases in the atmosphere. The additional heat trapped has increased the average temperature of the lower atmosphere, producing the so-called enhanced greenhouse effect. Organisations that understand the greenhouse emissions profile of their operations are well placed to respond to the challenges and opportunities that may arise from measures to reduce greenhouse gas emissions. Quantifying greenhouse emissions is therefore a sensible business risk management strategy, especially for those organisations in greenhouse-intensive industry sectors. Further, as greenhouse gas emissions are closely linked to consumption of energy and fossil fuels, an inventory of emissions may highlight cost saving opportunities. Greenhouse emissions management and reduction can cut energy costs and reduce transport and fuel-related expenditure. Australian Context Australia is particularly vulnerable to the impacts of climate change, with significant greenhouse gas emissions occurring across a range of sectors in the economy, including energy, industrial processes, agriculture, land use change and forestry, and waste. Forecasts of agricultural impacts of climate change are a key concern because of the sector s importance to the national economy. Australia has a comprehensive national domestic greenhouse action agenda that reflects Australia s particular circumstances. Since 1997, the Commonwealth Government has invested nearly $1 billion in programs aimed at reducing greenhouse emissions. These initiatives have included promoting renewable energy and the use of alternative fuels, as well as implementing large-scale greenhouse gas abatement projects and the Greenhouse Challenge. Facts and Figures 1 Australia s 2000 net greenhouse gas emissions totalled 535 million tonnes (Mt) of carbon dioxide equivalent. Total emissions increased by 6.3 percent (32.0 Mt) over the period 1990 to 2000 and by 2.1 percent (11.3 Mt) between 1999 and Stationary Energy use accounted for 49.3 percent of total emissions, followed by Agriculture (18.4 percent), Transport (14.3 percent), Land Use Change and Forestry (7.1 percent), Fugitive Emissions (5.9 percent), Waste (3.1 percent) and Industrial Processes (1.9 percent). Emissions per dollar of GDP were kilograms CO2 equivalent in 2000, 24.0 percent lower than in Emissions per capita were 27.9 tonnes CO 2 equivalent in 2000, 5.3 percent lower than 1990 level. Source: Australian Greenhouse Office 1 All figures quoted in this section have been calculated according to the United Nations Framework Convention on Climate Change (UNFCCC) Inventory accounting provisions Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 27

36 Greenhouse Indicators Indicator Description Units Type GRI Equivalent Page Greenhouse 1 Total greenhouse gas emissions Tonnes Core EN8 Total 28 of CO 2 equivalent greenhouse emissions Greenhouse 2 Initiatives aimed at reducing Not applicable Additional No GRI equivalent 33 greenhouse gas emissions CORE Greenhouse Indicator 1: Total Greenhouse Gas Emissions (tonnes of CO 2 equivalent) This indicator provides information on how an organisation can determine the nature and scale of greenhouse gas emissions associated with its business operations, and to assess the scope for reducing them. Methodology Greenhouse gas emissions include emissions of the six greenhouse gases listed in the UNFCCC as follows: carbon dioxide (CO 2 ) methane (CH 4 ) nitrous oxide (N 2 O) hydrofluorocarbons (HFC s) 1 perfluorocarbons (PFC s) 2 sulphur hexafluoride (SF 6 ) Emissions are reported in tonnes of CO 2 equivalent (CO 2 -e) to take account of the varying global warming potential of different greenhouse gases due to their chemical make-up. The global warming potential (CO 2 -e) for each key greenhouse gas is listed in the Table below: Greenhouse Gas Global Warming Potential (CO 2 -e) carbon dioxide (CO 2 ) 1 methane (CH 4 ) 21 nitrous oxide (N 2 O) 310 hydrofluorocarbons (HFC s) ,800 perfluorocarbons (PFC s) 2 6,500-9,200 sulphur hexafluoride (SF 6 ) 23,900 1,2 Note: the global warming potential for individual HFCs and PFCs vary, and can be found online at the Greenhouse Challenge s web site 28 Environment Australia

37 Chapter 5 Business activities resulting in greenhouse gas emissions include: Electricity and gas use. Transportation. Waste treatment and disposal. Industrial processes, including air conditioning, solvents etc. Electricity generation and transmission. Coal, gas and petroleum production. Land use change, forestry and agriculture. Total greenhouse gas emissions are the sum of emissions from all business sources. Greenhouse gas emissions should be reported in absolute terms and also as normalised data. The normalised data enables the greenhouse intensity of business outputs to be tracked and assessed. Total greenhouse gas emissions =Sum of (emissions of each greenhouse gas x global warming potential for each greenhouse gas) It is recommended that organisations calculate greenhouse gas emissions using the methodologies developed for the Greenhouse Challenge program. Greenhouse Challenge participants should simply report emissions as determined under the program framework. Other organisations should identify greenhouse gas emissions sources associated with their operations. Methodologies for widely applicable sources including electricity and gas use, transportation, and waste disposal are presented below. Methodologies to calculate emissions from industry specific sources can be obtained from the Greenhouse Challenge workbook at Electricity Use Greenhouse gas emissions arising from electricity use are calculated using the following formula: Greenhouse gas emissions (t CO 2 -e) = electricity used (kwh) x emissions factor/1000 The amount of electricity used in kwh is typically documented in supplier invoices or in some cases is read from meters. Emissions factors, which vary between State and Territory, are indicators of the relative greenhouse intensity of each of their electricity supply networks. The emission factors can be found in Table 2 of the Greenhouse Challenge workbook at Gas Use Greenhouse gas emissions arising from natural gas use are calculated using the following formula: Greenhouse gas emissions (t CO 2 -e) = natural gas used (GJ) x emissions factor/1000 Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 29

38 The amount of natural gas used in GJ is typically documented in supplier invoices, or in some cases, is read from meters. Emission factors for natural gas use, which vary between State and Territory, can be found in Tables 6 and 7 of the Greenhouse Challenge workbook at tools/workbook. Transport Vehicles powered by fossil fuels create greenhouse gas emissions. There are two options for calculating greenhouse gas emissions from transport activities, and the approach adopted will depend largely on data availability. The first option is based on the quantity of transport fuels consumed by an organisation. Separate calculations should be carried out for each fuel type. Greenhouse gas emissions (t CO 2 -e) = fuel quantity (kl) x energy content of fuel (GJ/kL) x emission factor (kg CO 2 -e/gj)/1000 The quantity of each transport fuel consumed can typically be determined by reviewing supplier invoices in conjunction with fuel inventory information. The energy content and emission factors for each fuel are contained in Table 11 of the Greenhouse Challenge workbook at tools/workbook. Alternatively, the following formula can be used when an organisation has records of kilometres travelled by its vehicles, but does not know the quantity of fuel consumed: Greenhouse gas emissions (t CO 2 -e) = (total km travelled x fuel consumption x energy content of fuel x emission factor)/10 6 The total kilometres driven for each type of fleet vehicle can typically be sourced from vehicle records. Further information for this calculation can be found at /workbook. Waste Disposal Waste decomposition is a source of greenhouse gas emissions, primarily because it releases methane. The quantity of emissions depends on the nature of the waste. Organisations that dispose of waste to landfill should use the formula on page 31 to estimate the associated greenhouse gas emissions. Separate calculations should be carried out for each waste type. 30 Environment Australia

39 Chapter 5 Greenhouse gas emissions (t CO 2 -e) = [((waste quantity (tonnes) x DOC x DOC F x F 1 x 16/12) - R) x (1-OX)] x GWP CH 4 The quantity of solid waste should be determined in accordance with Waste Indicator 1: Total Amount of Solid Waste by Type and Destination within this Guide. DOC DOCF The Degradable Organic Carbon (DOC) for various waste types is available online from the Greenhouse Challenge workbook (Table 9) at The fraction of Degradable Organic Carbon dissimilated (DOC F ) has a default value of 0.55 for paper and paper board, wood and straw and garden and park waste, and 0.77 for other (non-lignin containing) materials F l The carbon fraction of landfill gas (Fl) has a default value of /12 is the conversion factor for carbon to methane R R is the amount of methane recovered in the reporting period (in tonnes) OX The Oxidation Factor (OX) has a default value of 0.1 GWP CH 4 The global warming potential of methane (GWP CH 4 ) used to convert the quantity of methane emitted to CO 2 -e is 21 Example OzyAir is a regional airline operating 22 aircraft on domestic routes throughout south-eastern Australia, linking regional centres to Melbourne and Sydney. In the reporting year, the airline flew 7800 sectors and carried 120,000 passengers. OzyAir core activities are flight operations and passenger services. All support services, including terminal management, flight catering, line engineering and baggage handling, are contracted out and not included in its greenhouse gas emissions. OzyAir is administered from its Melbourne corporate headquarters and performs aircraft maintenance and repairs from hangars in New South Wales. Greenhouse gas emissions for the airline are calculated as follows: Fuel Total aviation fuel use in 2001 (from supplier invoices) = 800 kl (no fuel is stored) Fuel: (800kl x 33.1 GJ/kL x 77.2 kgco 2 e/gj)/1000 = 2044 tonnes CO 2 -e Electricity Total electricity use in 2001 (from supplier invoices) = 105 GJ The breakdown of electricity use was 80 GJ associated with the Melbourne office and 35 GJ for the maintenance hangars. Electricity use = 29,170 kwh (22,200kWh from the office and 6,970 kwh from the maintenance hangar) Using the emission factors for Victoria (corporate headquarters) and NSW (maintenance hangar) sourced from the Greenhouse Challenge information (for the current year). 22,200 kwh x 1.444/1000 = 32 tonnes CO 2 -e (office) 6,790 kwh x 1.012/1000 = 7 tonnes CO 2 -e (maintenance hangar) Total = 39 tonnes CO 2 -e Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 31

40 Waste Total waste produced in 2001 = 86.4 tonnes Paper and cardboard = 48.4 tonnes (4.4 tonnes from the office, 4 tonnes from maintenance and 40 tonnes from in-flight food packaging Food waste = 18 tonnes (2 tonnes from the office and maintenance, 16 tonnes from in-flight food service) Plastics, glass and other = 20 tonnes (1 tonne from the office, 9 tonnes from maintenance, 10 tonnes from in-flight food packaging and general services). Waste = 48.4 tonnes paper and cardboard, 18 tonnes food Using the emission formulae provided and the values for the individual types of waste in the Greenhouse Challenge information, emissions from waste total: GHG emissions (t CO 2 -e) = [((Q x DOC x DOC F x F 1 x 16/12) R ) x 0.9] x 21 Therefore: paper/cardboard = [((48.4 x 0.4 x 0.55 x 0.5 x 16/12) 0) x 0.9] x 21 = 134 tco 2 -e food waste = [((18.0 x 0.15 x 0.77 x 0.5 x 16/12) 0) x 0.9] x 21 = 26 tco 2 -e Total = 160 tonnes CO 2 -e Other wastes do not degrade to produce methane and are therefore not calculated against this formula. Total emissions for OzyAir Sector (tonnes CO 2 -e) Fuel Use (avgas) 2044 Electricity (office and maintenance) 39 Waste (in-flight, maintenance and office wastes) 160 Total greenhouse emissions 2243 OzyAir reports greenhouse gas emissions data in both absolute and normalised form. The relevant unit of production is the number of passenger kilometres flown by the airline, which is calculated annually by the network operations computer system. As OzyAir s operations for the reporting period consisted of million passenger kilometres, the normalised value is calculated as follows: Number of passenger kilometres per tonne of greenhouse gas emissions = 26,660,000/2243 tco 2 -e = 11,886 passenger kilometres per tco 2 -e. 32 Environment Australia

41 Chapter 5 ADDITIONAL Greenhouse Indicator 2: Initiatives Aimed at Reducing Greenhouse Emissions This indicator provides an organisation with information on how to describe the projects and programs it has developed and implemented to reduce greenhouse gas emissions. Possible Information to Report Operational improvements that cut emissions of greenhouse gases including cleaner production initiatives. Measures to transform greenhouse gases into less greenhouse-intensive outputs (for example, methane to CO 2 ) and initiatives to reduce fugitive emissions. Efforts to conserve energy such as energy awareness programs, cogeneration, insulation, replacement or modification of equipment and facilities. Initiatives to offset greenhouse gas emissions from operations, including emissions trading and sequestration. Any reduction targets for emissions. Any voluntary reduction programs or protocols to which an organisation subscribes (for example, Greenfleet or the Greenhouse Challenge). Further information on greenhouse gas abatement actions is available online at /challenge. FURTHER INFORMATION ON GREENHOUSE INDICATORS AND METHODOLOGIES The information and methodologies within this Section of the Guide are closely aligned with the Greenhouse Challenge Program. Further information is available online from the Australian Greenhouse Office at The World Business Council for Sustainable Development (WBCSD) has developed a Greenhouse Gas Protocol comprising greenhouse gas accounting and reporting standards and guidelines for companies and other types of organisations. It addresses the accounting and reporting of the six major greenhouses gases. The WBCSD Greenhouse Gas Protocol is available online at Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 33

42 Water Background and Rationale Water is a precious and finite resource. About one-third of the world's population lives in regions with moderate to high water stress. If present consumption trends continue, two of every three people on earth will live in water-stressed conditions by the year Water scarcity is a major constraint to industrial and economic growth. Consequently, the need to meet increasing demands for freshwater resources is likely to be a significant issue on environment and development agendas over coming decades. An organisation which understands water use associated with its operations has a sound basis to begin identifying opportunities to reduce its consumption, and in many cases, to implement water efficiencies across its operations. For example, initiatives to capture and use treated wastewater or stormwater can decrease fresh water use and provide significant cost savings. A proactive stance on water management also enables an organisation to demonstrate it shares general community concerns regarding careful management of water resources. Australian Context Australia is the world s driest inhabited continent, with over 80 percent of its land recording an average rainfall of less than 600 mm annually. The nation s inland waters are essential to society and the national economy, providing water for drinking, agriculture and industry. Pressures facing the health of Australia's water resources include: increases in water extraction, clearing of catchment and riparian vegetation, pollution discharge, algal blooms, and the increase in areas affected by dryland salinity. In Australia, the need to balance the interests of business, the community and the environment for water resources has emerged as a major challenge. Growing demand for water places pressure on catchments, and creates a need to use water more effectively across the entire economy. Facts and Figures Total annual water use in Australia between 1985 and 1996/97 has increased by 65 percent to 24,058 GL (approximately 24 billion cubic metres) annually. Surface water extraction accounts for 79 percent of total water use, while groundwater accounts for 21 percent of total use. Over the past 20 years, the area of irrigated land has almost doubled in New South Wales and Queensland. There has been a 75 percent increase in the annual volume of water used for irrigation between 1985 and 1996/97. Urban and industrial water users account for 20 percent of total water use in Australia, and increased 55 percent between 1985 and 1996/97. Source: Environment Australia Inland Waters Theme Report Australia State of the Environment Report ISBN Environment Australia

43 Chapter 5 Water Indicators Indicator Description Units Type GRI Equivalent Page Water 1 Total water use Cubic metres (m 3 ) Core EN5 Total water use 35 Water 2 Total water reused Cubic metres (m 3 ) Additional EN22 Total recycling and 36 reuse of water Water 3 Initiatives to decrease Not applicable Additional No GRI equivalent 37 water consumption or increase water reuse CORE Water Indicator 1: Total Water Use (cubic metres m 3 ) This indicator provides information on how an organisation can calculate and report on the amount of its freshwater use, and assess any scope for reducing water consumption and costs. Methodology Total water use is the sum of water purchased from water suppliers and water extracted from surface and groundwater sources. It includes water used for cooling purposes but excludes seawater. It should be measured and reported in the following categories: Potable water (potable water received from a local/municipal supplier). Surface water (water obtained from surface water sources such as streams and creeks, including stormwater and collected runoff). Groundwater (water obtained from groundwater sources such as wells and bores). Total water use = potable water + water obtained from surface sources + water obtained from groundwater sources Potable Water Generally, all water supplied by retailers is of potable quality. The volume of water purchased from retailers is typically recorded in invoices from those suppliers. If water purchased is of another quality classification (for example, cooling water or treated effluent) it will be necessary to include additional categories in total water used. Surface and Ground Water Water from surface water or groundwater sources is usually extracted by pump. Where extraction is metered through the pump, the volume of water consumed can be determined by reading the meter. In the absence of a meter, consumption may be estimated by multiplying the pump flow rate by the duration of pumping operations. If tanks are gravity driven, flow rates and hours of discharge may be estimated. Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 35

44 Example CrackerJacks Pty. Ltd. manufactures crackers at its factory located adjacent to a river. In the reporting year the company produced 184,000 boxes of crackers for the domestic market. CrackerJacks has a licence to pump some water from the river and is also connected to the town supply. Cracker ingredients are mixed with water supplied by the local retailer and all other water, except for drinking and kitchen purposes, is supplied by a gravity-fed tank filled by pump from the river. The river water is not considered suitable for drinking. The retailer s invoice indicates the potable water use from the town supply for the year was 5,260kL or 5,260m 3. The pump operates for two hours twice daily to fill the gravity tank and pumps at a known rate of 30 litres per minute. Therefore, annually, the pump will transfer 2,630m 3 of surface water (2 x 2 (hrs) x 60 (mins/hr) x 30 (litres/min) x 365 (days/yr) / 1000 (litres/m 3 ) = 2,630m 3 ). Total water use Potable water 5,260m 3 Surface water 2,630m 3 Total 7890 m 3 CrackerJacks reports water use data in absolute and normalised form. Water use efficiency is tracked by monitoring the amount of water used per box of finished product. As the company produced 184,000 boxes of crackers during the reporting period, the normalised water use is calculated as follows: Boxes of biscuits produced per m 3 of water = 184,000/7890m 3 = boxes of biscuits per m 3 of water. ADDITIONAL Water Indicator 2: Total Water Reused (cubic metres m 3 ) This indicator provides information on how an organisation can collect and measure data which demonstrates the effectiveness of its water reuse strategies. Water reuse is clearly an effective way to reduce consumption of fresh water, while simultaneously delivering economic benefits to an organisation. Methodology Reused water is water reintroduced to the same process after initial use, or water introduced to another process within an organisation s operations after initial use. The water may have been treated between uses. To determine the quantity of water reused, a detailed knowledge of operational processes is required. It can be calculated by measuring the flows of used water into the subsequent process, or by determining the reduction in fresh water use (assuming other process conditions remain constant). 36 Environment Australia

45 Chapter 5 Example CrackerJacks implemented a water recycling system during its last reporting period, to reuse cooling water twice before release. Prior to implementation of the recycling program, the company s cooling system used 4,500m 3 of water annually. As a consequence of recycling, the quantity of river water used for cooling purposes has dropped from 4,500m 3 to 1,500m 3. Assuming negligible water lost as steam, 3,000m 3 of water is reused. ADDITIONAL Water Indicator 3: Initiatives to Decrease Water Consumption or Increase Water Reuse This indicator provides information on how an organisation can describe projects and programs it has developed and implemented to decrease water consumption, demonstrating its commitment to efficiently managing water resources. Possible Information to Report Process changes directed at reducing water consumption. Initiatives to recycle or reuse water. Programs to raise staff awareness of water conservation. FURTHER INFORMATION ON WATER INDICATORS AND METHODOLOGIES The information and methodologies within this Section of the Guide are closely aligned with the GRI Water Protocol. The Protocol contains further details and techniques for measurement of water use and is available online at The UK Department of the Environment, Transport and the Regions has prepared Guidelines for Company Reporting on Water (2000). These guidelines are available online at Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 37

46 Materials Background and Rationale The trend of our society today is toward to an increasing consumption of natural resources and materials. Meeting consumer demand for goods requires using and transforming raw materials extracted from the environment. Using material inputs efficiently not only reduces pressures on the environment, but can result in financial savings. Producers can use materials more efficiently through strategies such as lightweighting, using recycled wastes as inputs, and enhancing the recyclability of their products. These approaches increase the service intensity, or value, from each unit of raw material. Monitoring material inputs is a fundamental business management process. Inventory control and maximising the use of material inputs are critical cost-control issues given considerable attention by many organisations. An understanding of material inputs assists them in identifying opportunities for material substitution, and product or service redesign with the potential to deliver financial and environmental benefits. Australian Context Australia s economy is highly dependent on material inputs for the production of goods and services, requiring a total material flow of about 180 tonnes per person annually. In Australia, despite the growth of the services sector, material use is increasing in both gross and per capita terms. This creates substantial environmental consequences, along with challenges for a reduction in our use of materials. Much is being done in industry to reduce negative environmental impacts, but reduction at source, through lower material use, is also important. Industry s efforts to increase material efficiency are supported by a range of public sector initiatives that encourage the uptake of eco-efficiency and cleaner production. Further, government waste management agencies are promoting and facilitating use of wastes as material inputs for industrial processes. Numerous products composed of fully or partially recycled materials are now available in Australia. Facts and Figures Iron and steel consumption is spread across all industry sectors, but is dominated by metal products manufacturers (33 percent of total consumption), machinery and equipment (17 percent), transport (16 percent), and building and construction (12 percent). Non-ferrous metals (for example, aluminium and copper) are used extensively in electrical equipment and appliances (over 25 percent of total consumption). Construction materials are predominantly used in the building, infrastructure and construction sectors (approximately 90 percent of total consumption). Agricultural produce is used mainly for providing meat and meat products (over 50 percent of total consumption), while other food products make up most of the remainder, excluding 7 percent used in the textile industry. 38 Environment Australia

47 Chapter 5 Facts and Figures (continued) Timber products, excluding paper-based products, are predominantly used in residential buildings (55 percent of total consumption), with only small quantities used in other sectors such as furniture (12 percent), other construction and wholesale trade. Paper production is largely used for printed and published media (57 percent of total consumption), the remainder being consumed largely in packaging applications (23 percent). The use of paper in Australia steadily increased from 2808 kt in to 3461 kt in , with newsprint, and publishing and writing papers, representing just over 50 percent of consumption by weight. Plastic products are diverse, with a wide range of applications across other industry sectors. Packaging is the largest consumer of plastic (37 percent of total consumption), with significant uses also in building and construction (27 percent) and manufacturing (13 percent). Source: Environment Australia Human Settlements Theme Report Australia State of the Environment Report ISBN Materials Indicators Indicator Description Units Type GRI Equivalent Page Materials 1 Total material use Tonnes Core EN1 Total material use other 39 than water by type Materials 2 Initiatives aimed at using Not applicable Additional EN2 Percentage of materials 41 post consumer recycled used that are wastes (processed or materials and waste from unprocessed) from sources external industrial sources to the reporting organisation CORE Materials Indicator 1: Total Material Use (tonnes) This indicator provides information on how an organisation can determine the nature and scale of materials-use associated with its business operations, and how to assess the scope for reducing material consumption and costs. Methodology Total material use is the weight of all materials purchased or obtained from other sources, including raw materials for conversion to product or service, associated process materials, and semi-manufactured goods or parts. It excludes water and materials used to generate energy. Total material use should be reported in absolute terms and also normalised in relation to an organisation s product or service output. For organisations with numerous inputs, estimating consumption for all materials is potentially onerous. In the interests of maximising return on effort, it is recommended that organisations focus on identifying and quantifying their key material inputs. This can be achieved by reviewing procurement and financial records to reveal items used in large quantities or purchases of high value. It is also important to ensure materials with high environmental impacts, which contribute to an organisation s risk profile, are also included. Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 39

48 The following equation should be used to determine total material use: Total material use = input material from suppliers + input material from owned source Input Material from Suppliers Material use should be reported by material type where possible. This aids understanding, as the environmental significance of materials varies considerably. Details of quantities of materials supplied during the reporting period can typically be obtained from supplier invoices. This information, in conjunction with inventory information, can be used to determine quantities consumed during the reporting period. Input Material from Owned Sources For some industries, raw materials are sourced from within property owned by the organisation. This is especially true in the mining, forestry and agricultural sectors. In these cases, quantities of materials may be determined by investigating extraction or weighbridge records, or estimated using process flow information. Example AutoSteer manufactures automotive steering wheels, columns and housings and purchases its input materials in either component or refined material form (either complete components such as bearings or metal sheet to press into components). AutoSteer identifies three materials that account for over 90 percent of its material use in product production. These materials are steel, aluminium and plastic. Whilst recognising that other materials are used in its production manufacturing, these other materials are not particularly environmentally sensitive and are consumed in much smaller volumes. AutoSteer reports that it purchases 65 tonnes of steel and 48 tonnes of aluminium annually from its supplier (sourced from invoicing). Its seven suppliers of plastic components provide 120 tonnes of plastics (sourced from invoicing, volumes quoted per unit and by total mass). AutoSteer reports material use data in absolute and normalised form. By relating the weight of the three primary raw materials to the weight of finished product, the efficiency of materials use can be monitored. As the company produced 198 tonnes of finished products during the reporting period, the normalised indicator is calculated as follows: Tonnes of finished product as a ratio of the three primary raw material inputs: Steel 198 tonnes of finished product / 65 tonnes of steel = 3.05 Aluminium 198 tonnes / 48 tonnes of aluminium = 4.13 Plastic 198 tonnes / 120 tonnes of plastic = Environment Australia

49 Chapter 5 ADDITIONAL Materials Indicator 2: Initiatives Aimed at Using Post Consumer Recycled Materials and Waste from Industrial Sources This indicator provides information on how an organisation can describe projects and programs it has developed and implemented to increase its use of post-consumer recycled materials, and waste from industrial sources. It can demonstrate an organisation s commitment to improving its use of materials. Possible Information to Report Initiatives to improve material use efficiency by substituting raw materials with post-consumer recycled material or waste from industrial sources. Cleaner production projects directed at reducing waste and using raw materials more efficiently. Product reformulation or redesign efforts to facilitate use of wastes as raw materials or to increase product recyclability. FURTHER INFORMATION ON MATERIAL INDICATORS AND METHODOLOGIES Organisations seeking to purchase products containing recycled content can consult the Waste Wise Purchasing Guide for Government and Industry 2000, available from EcoRecycle Victoria online at This guide contains an extensive list of products, supplier contacts and details of recycled content. Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 41

50 Waste Solid and Hazardous Background and Rationale Developing strategies and practices to manage the huge quantities of waste generated globally is a key environmental challenge. Population growth, patterns of increased consumption, and industrialisation of developing nations are placing additional pressures on systems that manage waste. Traditional approaches to waste management rely on the natural environment to absorb and assimilate unwanted by-products. Environmental impacts associated with waste disposal include land contamination, methane emissions, leachate discharges, odour, flammability, toxicity, and consumption of land resources. Organisations are finding waste disposal costs have risen substantially in recent decades, adding to overall business costs. Accordingly, compelling financial incentives, as well as environmental drivers, exist for organisations to monitor and minimise the waste they generate. Australian Context Historically, the majority of Australia s solid waste has been dumped in landfill. Despite the enthusiastic embracing of waste recycling schemes, Australians currently contribute about one tonne of waste per person annually to landfill. Much of this waste can potentially be recovered and used as raw materials. Considerable pressure exists to better manage and reduce waste across States and Territories, driven by community demand, government expectations and industry initiative. Further, the sheer volume of waste produced, along with scarcity of suitable landfill sites in major cities, are prompting a rethink of traditional waste management practices. Legislation and policy arrangements are primarily the responsibility of State and Territory governments. A number of jurisdictions have established systems to track hazardous wastes from place of origin to disposal destinations. These programs have significantly reduced inappropriate dumping of harmful wastes. The transportation of hazardous waste in and out of Australia is controlled by the Commonwealth Government under its Hazardous Waste Act Facts and Figures For , the Australian Bureau of Statistics (ABS) estimated that 21.2 million tonnes of solid wastes were received and disposed at landfills nationwide. Overall waste composition across Australia is 40 percent domestic waste, 23 percent commercial and industrial waste, and 37 percent construction and demolition waste. The primary sources of commercial and industrial wastes are non-biodegradable wastes from industrial and manufacturing processes. The majority of hazardous or prescribed wastes are generated by the commercial, industrial and trade sectors. Sources of prescribed industrial wastes include hospitals, food outlets, chemical, paint and plastic manufacturers, and food processing plants. Data from New South Wales and Victoria suggests more than 50 percent of hazardous and prescribed wastes are generated from the manufacturing sector. Source: Environment Australia Human Settlements Theme Report Australia State of the Environment Report ISBN Environment Australia

51 Chapter 5 Waste Solid and Hazardous Indicators Indicator Description Units Type GRI Equivalent Page Waste 1 Total amount of solid waste Tonnes Core EN11 Total amount of waste 43 by type and destination by type and destination Waste 2 Total amount of hazardous Tonnes Core EN31 All production, transport, 45 waste produced (as defined import, or export of any waste by the Hazardous Waste Act deemed hazardous under the or State waste regulations) terms of the Basel Convention Annex I, II, III and VIII Waste 3 Initiatives and improvements Not applicable Additional No GRI equivalent 46 Note: Wastewater is dealt with under indicator Emissions 2. Significant discharges to water by discharge type. CORE Waste Indicator 1: Total Amount of Solid Waste by Type and Destination (tonnes) This indicator provides information on how an organisation can calculate and report on the amount of waste it produces and the destination of that waste. This indicator can also help an organisation identify other opportunities to minimise the amount of waste it produces. Methodology Solid waste is defined as unwanted solid material which no longer serves a purpose in the production or service delivery operations of an organisation. It includes waste to landfill, and waste to be recycled or reused directly, but excludes waste deemed hazardous, which is measured under Waste Indicator 2: Total Amount of Hazardous Waste Produced. Waste produced should be reported by disposal destination. For most companies a split between landfilled and recycled or reused waste will exist. The recycled or reused waste can be further segmented into various recycling or reuse streams, such as paper, plastics, metals, glass and organic waste. Waste data should be reported in absolute terms (for example, tonnes of waste landfilled) and also in normalised form (for example, tonnes of product sold per tonne of waste landfilled). Normalised data allows tracking and assessment of waste products. Most organisations engage waste contractors to remove solid waste. In some cases, contractor records will provide volumes or weights of waste removed, and this data can be used to determine overall quantities for reporting purposes. Under most arrangements, waste contractors record only the number and size of bins collected. In these instances, information on waste density and average volumes of waste removed are needed to estimate waste amounts. Waste densities can be determined by weighing a representative sample of bins, or alternatively, typical waste densities can be obtained from the United Kingdom Department of Environment, Food and Rural Affairs Environmental Reporting Guidelines for Company Reporting on Waste, available online at Using this information, waste removed can be calculated using the formula below. Separate calculations should be done for each waste destination. Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 43

52 Weight of waste (tonnes) = Bin size (m 3 ) x Waste density (t/m 3 ) x % full x No. of pickups per year The percentage fullness of bins is best determined by checking bins just prior to pickup over several weeks. The extent of the survey required to calculate an average value depends on whether waste production rates are relatively constant, or whether they vary considerably week to week. Example Angley Homes is a residential construction company. During the reporting period the company built 1,800 homes across Australia. Waste from Angley work sites is separated into two streams waste destined for landfill, and timber waste for recycling. The company contracts a waste management service provider to supply 3m 3 skips and perform waste pickups. Landfill waste skips are removed once per fortnight and timber waste skips are removed on demand when full. The waste contractor includes details of the number of skips removed in invoices, as this data is the basis for service charges. From a survey of landfill waste skips, it is established the skips average 70 percent full upon removal. Timber waste skips are assumed to be 100 percent full as they are removed on demand. With the assistance of the waste contractor, a number of full landfill waste and timber waste bins are weighed. From this exercise it determined that an average full landfill skip contains 1.6 tonnes and a full timber skip contains 2.1 tonnes. Waste densities are therefore and 0.7 respectively. From waste invoices, Angley Homes established that 8400 landfill skips and 600 timber skips were removed during The calculated amount of waste by destination is shown in the Table below. No of 3m 3 skips Skip volume (m 3 ) Average Waste volume (m 3 ) Waste density Mass of waste (t) % full Landfill 8,400 skips 25, , ,408 Timber Recycling 600 skips 1, , ,260 Angley Homes reports waste disposal data in absolute and normalised form. As the company built 1,800 homes during the reporting period, the normalised information is calculated as follows: Landfill waste produced per home = 9,408 tonnes/1800 = 5.23 tonnes per home Timber waste recycled per home = 1,260 tonnes/1800 = 0.7 tonnes per home 44 Environment Australia

53 Chapter 5 CORE Waste Indicator 2: Total Amount of Hazardous Waste Produced (as defined by the Hazardous Waste Act or State Waste Regulations) (tonnes) This indicator provides information on how an organisation can calculate and report the amount of hazardous waste its operations produce. Methodology Under the various State and Territory regulations, hazardous waste producers are required to complete waste transport certificates to allowing tracking of consignments from place of origin to disposal location. Waste transport documentation provides a relatively simple means for organisations to collate information on hazardous wastes for reporting purposes. Quantities entered into waste transport documentation can be extracted to determine an aggregate of hazardous waste production for the reporting period. Data should be reported by hazardous waste types. Hazardous waste data should be reported in absolute terms (for example, tonnes of waste produced) and also in normalised form (for example, tonnes of product sold per tonne of waste produced). Normalised data allows an organisation to track and assess its hazardous waste. Substances and materials classified as hazardous waste vary between States and Territories. In general, hazardous waste includes chemical residues, solutions, sludges, and used chemical containers. For specific details, the relevant State or Territory environmental agency should be consulted. Example Maxwells Plastics produces a significant quantity of hazardous solid waste as by-products of PVC pipe manufacture. The waste is removed from site for disposal by a licensed contractor. The waste transport receipts provided to Maxwells by its waste contractor are used to determine the quantity of hazardous waste produced at the facility. The receipts show that Maxwells generated: 277 tonnes of hydrocarbon resin. 23 tonnes of filter cake. 80 tonnes of chemical residues. Accordingly, Maxwells established it disposed of 380 tonnes of hazardous waste over This information can also be presented in normalised form to track efforts to reduce hazardous waste in relation to production output. As the output from Maxwells facilities over the reporting period was 23,600 tonnes of product, the normalised indicator is calculated as follows: Tonnes of hazardous waste per tonne of product = 380 tonnes/ 23,600 tonnes = tonnes of hazardous waste per tonne of product Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 45

54 ADDITIONAL Waste Indicator 3: Initiatives and Improvements This indicator provides information on how an organisation can document and demonstrate specific initiatives it has developed and implemented to minimise waste produced from its operations. Possible Information to Report Minimise solid waste, including programs to reduce, reuse and recycle waste. Minimise hazardous waste production, including cleaner production initiatives. Where possible, waste reductions achieved should be quantified and reported. FURTHER INFORMATION ON WASTE SOLID AND HAZARDOUS INDICATORS AND METHODOLOGIES Information on classifying wastes and recyclable materials, and on the challenges and opportunities waste and recycling presents, is available online from EcoRecycle Victoria at State and Territory environment protection agencies have primary responsibility for developing waste management policy and administering waste regulations in Australia. These agencies provide details of obligations under local hazardous waste regulations. The Hazardous Waste Act 1989 was developed to enable Australia to comply with obligations under the Basel Convention on the Control of the Transboundary Movements of Hazardous Wastes. The legislation is available online at /legislation.html. 46 Environment Australia

55 Chapter 5 Emissions to Air, Land and Water Background and Rationale Pollution of air, land and water are high-ranking environmental concerns for communities. Impacts of pollution include human health effects, degradation of natural ecosystems, and loss of productive land resources. Characterising its emissions to air, land, and water can provide an organisation with a better understanding of its operations, and often reveals opportunities to improve its operating processes. For example, an organisation using volatile organic chemicals as production inputs may begin viewing emissions of these substances as raw material losses. Schemes to recycle or capture the emissions for use have the potential to deliver significant financial benefits. Management of emissions is also an environmental protection issue. Minimising its adverse impacts on air, land and water provides an organisation with opportunities to build and maintain community and regulatory support for its ongoing operations. Australian Context Clean air and clean water are critical to Australia for a wide range of commercial, lifestyle, ecological and human health reasons. To achieve environmental protection goals, emissions to air, land and water are closely regulated under State and Territory environmental laws. At a national level, the National Environment Protection Council (NEPC) establishes consistent standards for environmental quality across all States and Territories. The National Pollutant Inventory (NPI) is a database of key emissions sources in Australia. The NPI provides public access to information on pollutant emissions at a neighbourhood level to assist governments with planning issues, and to encourage cleaner production. Organisations which emit quantities of certain substances above specified thresholds are required to report details of their annual emissions to the NPI. Facts and Figures Three substances sulphur dioxide, oxides of nitrogen and carbon monoxide accounted for more than 90 percent of all atmospheric pollution recorded by the NPI. Sulfur dioxide Total emissions to air totalled 1.4 million tonnes, of which 1.3 million tonnes is from industry sources (42 percent from the electricity supply industry, 35 percent from the basic non-ferrous metal manufacturing industry, and 19 percent from the petroleum refining industry). Total emissions to water was 2.3 tonnes, which was from the paper and paper manufacturing industry. Oxides of Nitrogen Total emissions were 1.3 million tonnes all of which were to air, with 0.69 million tonnes attributed to industry (71 percent from the electricity supply industry). Carbon Monoxide Total emissions were 4.9 million tonnes of which 14 percent were from industry sources. Sources: National Pollutant Inventory Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 47

56 Emissions to Air, Land and Water Indicators Indicator Description Units Type GRI Equivalent Page Emissions 1 Significant emissions Tonnes Core EN10 NOX, SOX, and other 48 to air and land significant air emissions by type Emissions 2 Significant discharges Tonnes Core EN12 Significant discharges 49 to water by discharge type to water by type Emissions 3 Initiatives to reduce Not applicable Additional No GRI equivalent 51 emissions and discharges CORE Emissions Indicator 1: Significant Emissions to Air and Land (tonnes) This indicator provides information on how an organisation can calculate and report on the significant emissions to air and land associated with its business operations. This indicator does not include discharges to water, which are addressed in Emissions Indicator 2: Significant Discharges to Water by Discharge Type. Methodology Significant emissions to air and land are emissions with potential to cause significant environmental impact or stakeholder concern. In practice, organisations that trigger reporting obligations under the National Pollutant Inventory (NPI) are recommended to use NPI data as a basis for emissions information in their TBL reports. The list of NPI substances and their associated reporting triggers is available online at Use of the NPI framework will minimise duplication of effort and draws upon industry-specific methodologies developed for the NPI. NPI methodologies are incrementally updated and extended to cover a wide range of industry sectors. NPI industry specific methodologies are available online at Emissions data should be reported as absolute amounts (for example, tonnes of pollutant emitted) and be normalised in terms of the service or product value produced (for example, tonnes of product produced per tonnes of pollutant emitted). Normalised data can be used to demonstrate efficiency improvements. Significant emissions to air and water = NPI reporting requirements For organisations not required to report for the NPI, it is less likely that emissions to air and land are a significant environmental issue associated with business activities. However, organisations may choose to report emissions that do not trigger NPI reporting obligations, for example where emissions occur in the proximity of sensitive receiving environments. Stakeholder engagement will assist organisations to decide which emissions to report. 48 Environment Australia

57 Chapter 5 Example Ink Magic Pty. Ltd. produces approximately 1,400 tonnes of ink and ink products annually. It has reported emissions to the NPI for several years, and enters NPI data directly into its environmental report. Data is listed in the Table below. Emitted Substance (NPI Categories) Amount (tonnes) emitted to air Cyclohexane 1.5 Ethanol 5.0 Ethyl Acetate 1.0 Methyl Ethyl Ketone 3.0 Methyl Isobutyl Ketone 0.6 Toluene (Methylbenzene) 2.4 Xylenes (individual or mixed isomers) 3.2 CORE Emissions Indicator 2: Significant Discharges to Water by Discharge Type (tonnes) This indicator provides information on how an organisation can calculate and report on significant discharges to water associated with its business operations. Methodology Significant discharges to water are discharges an organisation has which have the potential to cause environmental impact and /or stakeholder concern. To identify significant discharges, organisations should investigate discharges to waterways and marine waters. The volume, concentration, temperature and toxicity of discharges should be considered when identifying significant discharges. Discharge load should be reported in absolute terms and also normalised terms in relation to a suitable measure of product or service output. Where practicable, the pollutant load in water discharges should be calculated using the below formula. In most cases, laboratory analyses will be required to determine the concentration of the substances of interest in the discharge stream. Discharge load (tonnes) = (concentration of the substance discharged) x (discharge flowrate) x (discharge duration) Organisations should provide some commentary on impacts associated with discharges, such as nutrients, acid or alkalis, suspended or dissolved solids, metals, radioactive substances, pesticides, herbicides or fungicides, hydrocarbons, oils or other chemicals. Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 49

58 Example Panmac Mining discharges treated water from its tailings storage facility during high rainfall events into a local river. Discharges are tested by a NATA approved laboratory in accordance with its operating licence. On average, the discharge water contains the following: Copper Zinc Iron 23mg/l 5mg/l 16mg/l Monitoring at the spillway during the reporting year revealed wastewater was released at an approximate flow rate of 3m 3 per minute over three days of high rainfall, resulting in a total of 12,960 m 3 of discharged wastewater. Multiplying annual flow volume by average concentration, inputs to the river from the mine discharges are as follows: 300 kilograms of copper. 65 kilograms of zinc. 210 kilograms of iron annually. Pollution is impacting the local aquatic ecosystem. Macro-invertebrate monitoring performed in accordance with guidelines for assessing stream conditions indicates that stream health is average upstream of the mine, and poor downstream of the discharge point. While the information relates to biodiversity impacts, it is noted here for purposes of the example. The mine produces 4,000 tonnes of copper annually, so in normalised form it releases to water: 75 g of copper per tonne copper produced. 16 g of zinc per tonne copper produced. 53 g of iron per tonne copper produced. 50 Environment Australia

59 Chapter 5 ADDITIONAL Emissions Indicator 3: Initiatives to Reduce Emissions and Discharges This indicator provides information on how an organisation can describe the management of its significant emissions and discharges, and document the steps it has taken to improve environmental quality by lessening its impacts. Possible Information to Report Installation of pollution control systems and cleaner production technology. Strategies that reduce emissions and discharges. Infrastructure that changes the discharge destination to a less environmentally sensitive system (for example, from local systems to sewer). Initiatives to reduce the toxicity, concentration or impacts of emissions. It would be appropriate to report details of key initiatives undertaken, the resulting discharge improvements, and the associated environmental quality improvements expected. FURTHER INFORMATION ON EMISSIONS TO AIR, LAND AND WATER INDICATORS AND METHODOLOGIES Details of reporting thresholds and industry specific methodologies for the NPI are available online at The GRI Water Protocol provides further information relating to water pollution and water discharges, and is available online at Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 51

60 Biodiversity Background and Rationale Biodiversity is defined as the variety of life on earth, including plants, animals and micro-organisms, along with the genetic material they contain and the ecological systems in which they occur. Population growth and development are steadily eroding global biodiversity through: Clearance of native vegetation. Pollution of air, land and water. Overuse, misuse or inappropriate use of land and habitat areas. Disruption of natural ecological cycles such as breeding patterns. Invasion of exotic weeds and pests. Depletion of forests, fisheries and other natural resources. Where business operations interface with natural systems, potential exists for ecological pressures to occur. The quantity and characteristics of the land, inland and marine water an organisation controls therefore provides a sense of its potential to impact upon biodiversity. Details of any impacts on, or improvements to, natural systems provide stakeholders an appreciation of an organisation s performance. Australian Context Australia is among the most biologically diverse nations in the world, with a large number of species found nowhere else. The value this biodiversity provides to the national economy has received increasing attention, yet it remains difficult to calculate in real terms. One estimate in 1997 valued terrestrial Australian ecosystems at US$245 billion annually and US$640 billion annually for marine ecosystems. While these figures are relatively coarse, they emphasise the major contribution biodiversity makes to healthy and functioning landscapes. In 1992, Commonwealth, State, Territory and Local governments agreed on the National Strategy for the Conservation of Australia s Biological Diversity to provide a framework for protecting Australia's biodiversity. A review in 2001 of progress in implementing this Strategy led to the agreement of the National Objectives and Targets for Biodiversity Conservation, These specific, time-bound targets were developed to bridge the gap between current activities and the measures necessary to conserve Australia's biological diversity. A key mechanism for biodiversity protection in Australia is the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). The Act covers a range of key areas of biodiversity conservation, including Australia's obligations under the Convention for the Protection of World Cultural and Natural Heritage. 52 Environment Australia

61 Chapter 5 Facts and Figures The estimated total number of Australian flora (plants and fungi) species is 290,000. The estimated total number of Australian fauna species is 200,000 about 192,000 invertebrate species and vertebrate species. For many groups, particularly the invertebrates, it is estimated more than 50 percent of species remain undescribed. Due to Australia s size, age and geological and evolutionary isolation, over 80 percent of mammal, reptile, flowering plant, fungi, mollusc and insect species in Australia are endemic. There are 1478 species and 27 ecological communities listed under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) in February 2001, as either endangered or vulnerable at the national level. Source: Environment Australia Biodiversity Theme Report Australia State of the Environment Report ISBN Biodiversity Indicators Indicator Description Units Type GRI Equivalent Page Biodiversity 1 Location and size of land and Hectares Core EN6 Location and size of land 53 water owned, leased or owned, leased or managed managed in biodiversity-rich in biodiversity-rich habitats or ecologically significant habitat areas Biodiversity 2 Major impacts on land, water Not applicable Core EN7 Description of the major 55 and biodiversity associated impacts on biodiversity associated with an organisation s with an organisation s activities, activities, products products and services on terrestrial, and services freshwater and marine environments Biodiversity 3 Initiatives and improvements Not applicable Additional No GRI equivalent 56 CORE Biodiversity Indicator 1: Location and Size of Land and Water Owned, Leased or Managed in Biodiversity-Rich or Ecologically Significant Habitats (hectares) This indicator provides information on how an organisation can determine the nature and size of biodiversity-rich and ecologically-significant habitats within its scope of operations and control. Whilst having control of large areas of biodiversity rich habitat does not mean these areas are being degraded, it does indicate potential for an organisation to negatively impact on these areas. Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 53

62 Methodology Biodiversity-rich and ecologically significant habitats include: World Heritage properties. Wetlands of international importance (for example, the Ramsar wetlands). Areas where listed threatened species or communities or listed migratory species occur. Commonwealth Marine protected areas. Critical habitats listed under the Environment Protection and Biodiversity Conservation Act Commonwealth national parks, reserves and botanic gardens. Areas providing significant ecosystem services, such as pollination, water filtration, water table control and fish hatcheries. The location and size of land and water owned, leased or managed by an organisation in biodiversity-rich or ecologically significant habitats should be reported in hectares. The report should also describe the nature and extent of an organisation s operations in these areas. Links to databases containing location details for ecologically important areas are provided in the Table below. The area of land owned, leased or managed which is rich in biodiversity can be determined by reviewing the databases in relation to areas under an organisation s control. Biodiversity-rich habitat type Protected and biodiversity-rich areas Wetlands of international significance Habitat of endangered flora and fauna Information sources Environment Protection and Biodiversity Conservation Act. Ramsar Database: Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES): Critical Australian habitat Environment Australia : for endangered and rare species Marine protected areas Commonwealth National Parks, Reserves and Botanic Gardens Environment Australia database: Example The Australian Wilderness Experience Group manages four chalets within Australian wilderness or world heritage areas. Whilst the impacts of operations such as habitat destruction and interference with wildlife feeding and breeding have been minimised by diligent management, the Group acknowledges it operates within 36 hectares of ecologically significant habitat. 54 Environment Australia

63 Chapter 5 CORE Biodiversity Indicator 2: Major Impacts on Land, Water and Biodiversity Associated with an Organisation s Activities, Products and Services This indicator provides information on how an organisation can identify and describe the major impacts of its activities, products and services on land, water and biodiversity. Methodology Land, water and biodiversity impacts include removal of significant habitat, ecosystem damage, species reduction, changes to the pattern and quantity of environmental water flows, and spread of land degradation, including salinity and weed infestation. Biodiversity impacts should be reported in relevant units numbers of species, annual species population change, percentage of rehabilitated land or habitat change, percentage of exotic species present. Understanding biodiversity impacts often requires detailed investigation and specialist input. The Flowchart below outlines a process typically followed by organisations to investigate and address biodiversity matters associated with their operations. The green and yellow boxes in the Flowchart provide guidance on the nature and extent of information which should be included in a TBL report. Where potential exists for biodiversity impacts to occur, an investigation to characterise the issues would be performed. In the light of completed investigations, an organisation would initiate monitoring and mitigation activities to address significant impacts. Is there a biodiversity issue? Investigate if there is an ecological risk or stakeholder concern NO No reporting necessary against Biodiversity 2 YES Report these issues where appropriate Investigate further. Is the biodiversity issue significant? NO Address identified stakeholder concerns in PER and report findings of investigations if desired YES Outline identified environmental impacts and how the organisation s operations cause these impacts where appropriate Is the organisation seeking to monitor and/or mitigate its impacts on terrestrial, marine or freshwater environments? NO Report current environmental situation. If stakeholder concern is high, address these concerns potentially outling why mitigation is not planned YES Report current environmental situation. Report to stakeholders: Actions taken (and degree of implemention) Expected or proven environmental benefits Comment if desired on how this addresses stakeholder concern Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 55

64 Example JDG Feedlots have operated on the edge of Westernport Bay, a Ramsar wetland, for several years It has reasonably efficient effluent control, but a small quantity of sediment and nutrients escape into a tributary discharging directly into Westernport Bay. Independent studies have found the local seagrass beds are diminishing and sediment and nutrients are a primary cause of this loss. Testing reveals that JDG Feedlots is responsible for about a fifth of the sediment and nutrient loading on the system, although it is remains within its licensed operating conditions. Whilst JDG Feedlots acknowledges and reports the effects its operations have in conjunction with other upstream uses, it initiated a response plan to eliminate 90 percent of the sediment and 50 percent of the nutrients from its effluent by the middle of the following year. ADDITIONAL Biodiversity Indicator 3: Initiatives and Improvements This indicator provides information on how an organisation can demonstrate its commitment to protecting and improving biodiversity. Possible Information to Report Projects to rehabilitate disturbed or contaminated land, enhance existing habitat through removal of exotic species (weeds or feral animals), or to promote natural habitat (through native seed cultivation and fencing to allow regeneration etc.). Initiatives to relocate operations to less ecologically sensitive places. Area rehabilitated compared to total area disturbed. Research conducted into impacts and mitigation measures. Development of policies that reinforce an organisation s commitment to biodiversity protection. FURTHER INFORMATION ON BIODIVERSITY INDICATORS AND METHODOLOGIES State, Territory and Commonwealth government environment protection agencies and natural resource departments can assist organisations to characterise ecological issues relevant to their operations. At the time of publishing this Guide, the GRI was developing a Biodiversity Protocol. When completed, the Protocol will be available online at General information from Environment Australia on various aspects of national biodiversity is available online at This website also provides links to the National Strategy for the Conservation of Australia s Biological Diversity, National Objectives and Targets for Biodiversity Conservation, , and other information on various biodiversity subjects, including World Heritage, Australian Bio-regions, Ramsar Wetlands, and flora and fauna of National and State significance. In addition, the Earthwatch Institute provides an online biodiversity guide, Business and Biodiversity. An Australian Business Guide for Understanding and Managing Biodiversity at 56 Environment Australia

65 Chapter 5 Ozone-Depleting Substances Background and Rationale The ozone layer acts as a shield to protect the earth s inhabitants from ultra violet rays, a principal cause of skin cancer. Evidence of damage to the ozone layer and existence of a significant ozone hole has prompted a decisive international response. Substances implicated in ozone layer destruction include the chemical families known as chlorofluorocarbons (CFCs), hydrochlorofluorocarbons (HCFCs) and halons, which have potential uses in refrigeration, fire suppression, fumigation, laboratory operations and chemical processes. Significant global progress has been made toward phasing out the use of these substances through an international treaty, the Montreal Protocol on Substances that Deplete the Ozone Layer. In Australia, laws have been established to phase out or limit the use of ozone-depleting substances in accordance with this Treaty. Australian Context The Commonwealth Department of Environment and Heritage (Environment Australia) fulfils Australia's international obligations under the Montreal Protocol on Substances that Deplete the Ozone Layer. The Department administers and enforces the Ozone Protection Act 1989 and matching regulations, and has developed national strategies to phase out the use of ozone-depleting substances such as halons, methyl bromide, hydrochlorofluorocarbons (HCFCs), and chlorofluorocarbons (CFCs). Ozone-Depleting Substances Indicator Indicator Name Units Type GRI Equivalent Page Ozone Depleting Ozone depleting substances tonnes of CFC-11 Core EN9. Use and emissions 57 Substances 1 (ODS) emissions equivalent of ozone-depleting substances Ozone-Depleting Substances CORE Indicator 1: Ozone-Depleting Substances (ODS) Emissions This indicator provides information on how an organisation can identify, calculate and report emissions of ozone-depleting substances associated with its activities, products and services. Methodology Every ozone-depleting substance has an ozone-depleting potential, based on its chemical composition that reflects its capacity to damage the ozone layer. CFC-11 has an ozone-depleting potential of one. To provide a consistent approach, ozone-depleting potentials are used to convert total emissions of ozonedepleting substances to tonnes of CFC-11 equivalent. Losses or use of ozone-depleting substances are generally tracked by monitoring purchases of the substances, or through monitoring inventory changes. Once losses of individual substances are determined, emissions are converted to tonnes of CFC-11 equivalent using the following equation: Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 57

66 Total ozone depleting substance emissions = Sum of (emissions of each ozone-depleting substance x ozone-depleting potential for each substance). Ozone-depleting substances which should be included in emissions estimations are listed online within the Montreal Protocol on Substances that Deplete the Ozone Layer at shtml. This publication also includes a list of the ozone-depleting potentials for the various substances. Example OzyAir is a regional airline operating 22 aircraft on domestic routes throughout south-eastern Australia, linking regional centres to Melbourne and Sydney. OzyAir uses two ozone-depleting substances for its operations. The airline has a permit to use halon 1301 as a fire suppressant within aircraft, and uses HCFC-22 as a refrigerant within cool rooms to refrigerate fresh produce transported by air. OzyAir acquires halon 1301 and HCFC-22 on demand to replace gas losses. The airline purchased tonnes of halon 1301 and tonnes of HCFC-22 during the reporting period. The ozone-depleting potential of halon 1301 and HCFC-22 are 10 and 0.055, respectively. The quantity of emissions in tonnes of CFC-11equivalent is calculated as follows: Ozone depleting substance emissions = x x = tonnes of CFC-11equivalent FURTHER INFORMATION ON OZONE-DEPLETING SUBSTANCES INDICATORS AND METHODOLOGIES Additional information on the Montreal Protocol on Substances that Deplete the Ozone Layer and relevant Australian initiatives is available online from Environment Australia at 58 Environment Australia

67 Chapter 5 Suppliers Background and Rationale There is growing recognition that activities upstream and downstream of an organisation s core operations have potential to cause environmental impact. As sustainability strategies mature, some organisations are seeking to align with suppliers that share a commitment to careful management of environmental issues. In practice, this is achieved by incorporating environmental criteria into supplier evaluation processes, and in some cases, by setting minimum environmental management standards such as ISO14001 accreditation. Several automotive manufacturing companies require key suppliers to have a program for ISO implementation. To lead the process, these companies often provide environmental awareness training packages to assist with the introduction of environmental management systems. Arrangements with suppliers can be structured to add value by simultaneously reducing costs and environmental impacts. For example, rather than a waste disposal contract that rewards the contractor for increases in waste produced, some organisations are realising the benefits of programs where the waste contractor shares in savings from waste minimisation. Agreements of this type are beneficial for both business and the environment, foster innovation, and build strong relationships between organisations and service providers. Suppliers Indicator Indicator Name Units Type GRI Equivalent = Suppliers 1 Initiatives to encourage N/A Additional EN33. Performance of suppliers = improved environmental relative to environmental components performance of suppliers of programmes and procedures describd in response to Governance Structure and Management Systems section (Section 3.16) Possible Information to Report Processes that identify and characterise environmental impacts associated with the activities of suppliers. Environmental performance criteria standards for suppliers, and in supplier selection procedures. Contract arrangements which align environmental and economic benefits Environmental performance checks. Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 59

68 Products and Services Background and Rationale Environmental impacts occur at various stages of the lifecycle of products or services. For example, to understand the complete environmental implications of a motor vehicle, it is necessary to consider impacts associated with: Extracting the metals used to form vehicle components. Consumption of raw materials, energy and water. Emissions and discharges from the manufacturing process. Emissions arising from vehicle use. The likely method of disposal at end of life. It is clear that integrating environmental considerations with product and service design and development processes is a key opportunity for organisations today. Intervention at this stage is an effective and efficient way to reduce the ecological footprint of products and services, and has potential to open up new markets. Examples of new products developed from a desire for environmental impact reduction include the compact fluorescent light, and water efficient shower heads. Lifecycle assessment is a holistic approach towards examining environmental effects of products and services. This tool can be used by organisations to make decisions regarding production technologies, materials, packaging and service delivery methods. The scale and complexity of lifecycle assessments will vary according to the nature of products and services. Environment Australia has released several publications focusing on designing for the environment, and environmentally-friendly products, including Product Innovation The Green Advantage and Shop Smart Buy Green. These references are available online at: #links. The ecological footprint concept is further developed by the Victorian EPA at Products and Services Indicators Indicator Name Units Type GRI Equivalent Products and Describe where relevant, major Not applicable Core EN14. Significant environmental Services 1 environmental impacts at each stage impacts of principal products of the life cycle of principal products and services and services Products and Product and service stewardship Not applicable Core EN15. Percentage of the weight Services 2 initiatives including efforts to improve of products sold that is reclaimable product design and lessen impacts at the end of the products useful life associated with manufacturing, and the percentage that use and disposal is actually reclaimed Possible Information to Report Processes that identify and characterise environmental impacts associated with each stage of the life cycle of products and services. Initiatives that mitigate environmental impacts of specific stages of product or service life cycle. Any integration of environmental assessment criteria with product or service design processes. 60 Environment Australia

69 Chapter 5 Compliance Background and Rationale A wide variety of environmental legislation exists in Australia to provide a legal basis for environmental protection. Compliance with environmental laws is a fundamental requirement of sound and responsible environmental management. In Australia, States and Territories administer the majority of legislation in relation to management of waste and emissions to air, land and water. For the purposes of this indicator, applicable laws include all legislation, regulatory agreements, permits or licences. Non-compliance occurs when an organisation is served a notice or prosecuted by an authorised regulatory agency. Compliance performance is generally reported either as the number of breaches of environmental laws or the total financial penalty arising from those breaches. There are merits in both approaches. The number of breaches is an indicator of the organisation s compliance culture, whilst the scale of fines indicates the materiality of legislative breaches. Where an organisation is large and has a number of regulatory breaches across its operations, it is useful to report these in relation to defined severity categories. As the gravity of breaches can vary considerably, this approach enables the report audience to assess the seriousness of non-compliance issues. Spills of oils, fuels, chemicals or liquid waste can potentially lead to non-compliance with environmental laws. When spilt material is discharged to land or waterways, regulatory action may result. An organisation's record regarding occurrence of spills is therefore an indicator of its ongoing capacity to comply with regulatory requirements. Compliance Indicators Indicator Name Units Type GRI Equivalent Compliance 1 Incidences of and penalties for Not applicable Core EN16. Incidents of and fines non-compliance with applicable laws for non-compliance with all applicable international declarations/conventions/ treaties, and national, sub-national, regional, and local regulations associated with environmental issues Compliance 2 Significant spills of chemicals, oils Litres Core EN13. Significant spills of chemicals, and fuels in terms of total number oils and fuels in terms of total number and total volume and total volume Possible Information to Report The number of regulatory breaches. Details relating to significant regulatory breaches. The sum of all financial penalties for regulatory breaches. The number of spills and volume of spilt material by spill type. Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 61

70 A Appendix Linking this Guide to the Global Reporting Initiative (GRI 2002) The suite of indicators in this Guide is closely aligned to the environmental indicators contained within the Global Reporting Initiative s (GRI) 2002 Sustainability Reporting Guidelines. The process proposed therefore provides a basis for organisations to report in a manner that focuses on Australian needs and conditions, whilst being consistent with the GRI. The Table below shows the links between indicators contained in this Guide and corresponding GRI indicators. Some minor deviations from the GRI have been adopted to adapt the GRI for Australian conditions, or in response to stakeholder feedback. Differences are explained in the right hand column of the Table. Category Guide Indicator GRI 2002Indicator Comment Energy Energy 1: EN3. Direct energy use This Guide indicator corresponds broadly to the GRI indicator Direct energy use (kj) segmented by primary source and is in general alignment with the GRI draft Energy Protocol Energy 2: EN4. Indirect energy use This Guide indicator corresponds broadly to the GRI indicator Indirect energy use (kj) except that energy used to deliver energy products is for simplicity limited to the energy used to produce electricity consumed. Energy 3: Initiatives to use EN17. Initiatives to use This Guide indicator corresponds directly to the GRI indicator renewable energy sources and renewable energy sources and increase energy efficiency to increase energy efficiency Greenhouse Greenhouse 1: EN8. Greenhouse gas emissions. This Guide indicator is closely aligned to the GRI indicator Total greenhouse gas emissions (CO 2, CH 4, N 2 O, HFCs, although the Guide adopts a simplified Australian calculation (tonnes CO 2 equivalent) PFCs, SF 6 ) methodology Greenhouse 2: No GRI equivalent aimed at reducing This Guide indicator allows organisations to report on specific Initiatives greenhouse gas emissions initiatives to decrease greenhouse gas emissions Water Water 1: Total water use (m 3 ) EN5. Total water use This Guide indicator corresponds directly to the GRI indicator Water 2: EN22. Total recycling and This Guide indicator corresponds broadly Total water reused (m 3 ) reuse of water with the GRI indicator Water 3: Initiatives No GRI equivalent This Guide indicator, not included in the GRI allows to decrease water consumption organisations to report initiatives to minimise water or increase water reuse consumption Materials Materials 1: EN1. Total materials use other This Guide indicator corresponds broadly with the GRI Total material use (tonnes) than water by type indicator, although fuel is excluded from the definition of material in this instance Materials 2: EN2. Percentage of materials This Guide indicator is a simplified version of the Initiatives aimed at using post- used that are wastes (processed or GRI indicator to allow qualitative or quantitative assessment consumer recycled material and unprocessed) from sources external of material reuse waste from industrial sources to the reporting organisation Waste Waste 1: Total amount of solid EN11. Total amount of waste This Guide indicator directly corresponds waste by type and destination. by type and destination to the GRI indicator Waste 2: EN31. All production, transport, This Guide indicator modifies the wording of the Total amount of hazardous import, or export of any waste GRI indicator to adapt it for Australian conditions. Reference waste produced (as defined deemed hazardous under the to the Basel Convention has been removed and local by the Hazardous Waste Act terms of the Basel Convention definitions included or State regulations) (tonnes) Annex I, II, III and VIII Waste 3: No GRI equivalent This Guide indicator allows organisations to report specific Initiatives and improvements steps they have taken to minimise waste 62 Environment Australia

71 Category Guide Indicator GRI 2002Indicator Comment Emissions Emissions 1: EN10. NOx, SOx and other This Guide indicator corresponds to the GRI indicator, to Air, Land Significant emissions significant air emissions by type but is adapted to suit Australian statutory reporting and Water to air and land (tonnes) of the National Pollutant Inventory requirements performed by many organisations (generally applicable to NPI reporters) as a requirement Emissions 2: EN12. Significant discharges This Guide indicator is closely aligned to the GRI indicator Significant discharges to water to water by discharge by type type (tonnes) Emissions 3: Initiatives to No GRI equivalent This Guide indicator allows reporters to highlight specific reduce discharges and emissions initiatives to reduce pollution discharges and emissions Biodiversity Biodiversity 1: EN6. Location and size of land, This Guide indicator is closely aligned to the GRI indicator Location and size of land owned leased, or managed and references the forthcoming GRI Biodiversity Protocol owned,leased or managed in in biodiversity-rich habitats biodiversity-rich or ecologically significant habitat areas (hectares) Biodiversity 2: EN7. Description of the major This Guide indicator is closely aligned to the GRI indicator Major impacts on land owned, impacts on biodiversity associated biodiversity associated with the with activities and/or products and organisation s activities, services in terrestrial, fresh-water, products and services and marine environments Biodiversity 3: EN27. Objectives, programmes and This Guide indicator broadly corresponds to GRI indicator Initiatives and Improvements targets for protecting and restoring (biodiversity) native ecosystems and species in degraded areas Ozone Ozone Depleting Substances 1: EN9. Use and emissions of ozone- This Guide indicator corresponds to GRI Indicator EN9 Depleting Ozone-depleting substance depleting substances emissions although for simplicity the Guide indicator suggests Substances (tonnes of CFC-11 equivalent) reporting ODS use utilising data that is relatively easy to obtain (eg. inventory changes, purchase quantities) Suppliers Suppliers 1: EN33. Performance of suppliers This Guide indicator broadly corresponds to GRI indicator Initiatives to encourage relative to environmental componimproved environmental ents of programmes and procedures performance of suppliers described in response to Governance Structure and Management Systems section (Section 3.16 in GRI 2002) Products Products and Services 1: EN14. Significant environmental This Guide indicator broadly corresponds to GRI indicator and Services Describe where relevant major impacts of principal products environmental impacts at each and services stage of the life cycle of principal products and services Products and Services 2: EN15. Percentage of the weight This Guide indicator broadly corresponds to GRI indicator, Product and service stewardship of products sold that is reclaimable and includes scope to discuss initiatives where applicable initiatives including efforts at the end of the products useful to improve product design and life and percentage that is actually lessen impacts associated with reclaimed manufacturing, use and disposal Compliance Compliance 1: EN16. Incidents of and fines or non- This Guide indicator corresponds strongly with the GRI. Incidences of and penalties compliance with all applicable inter- Simplified language for Australian first time reporters for non-compliance with national declarations/conventions/ applicable laws treaties, and national, sub-national, regional, and local regulations associated with environmental issues Compliance 2: EN 13. Significant spills of chemicals, This Guide indicator directly corresponds to GRI indicator Significant spills of chemicals, oils, and fuels in terms of total oils and fuels in terms of number and total volume total number and total volume Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 63

72 B Appendix Basic Information and Conversion Factors Calorific value Joule Kilowatt hour Watt The quantity of heat produced by a given mass of fuel upon complete combustion, generally expressed in joules per kilogram A unit of energy or work A unit of work equivalent to the work done when a rate of work of 1,000 watts is maintained for one hour Unit of power (rate of energy use) Abbreviations Abbreviation Prefix Symbol 10 9 Giga (billion 1,000,000,000) G 10 6 Mega (million 1,000,000) M 10 3 kilo (thousand 1,000) k Equivalences 1 Watt 1 Joule/Second 1 Watt-hour 3600 Joules 1000 Watt-hours 1 Kilowatt hour (kwh) 1000 kilograms 1 tonne 1,000,000,000 Joules 1 Gigajoule (GJ) 1,000,000 litres 1 Megalitre (Ml) 1 Megalitre 1 cubic metre Conversion Factors Conversion Formula Units kwh to J kwh x 3.6x10 6 Joules J to kwh J x 1/3.6 x 10-6 kwh kwh to MJ kwh x 3.6 MJ MJ to kwh MJ x kwh kwh to GJ kwh x 3.6 x 10-3 GJ GJ to kwh GJ x 278 kwh 64 Environment Australia

73 Appendix C Further Information Australian Greenhouse Office (AGO) The AGO site is the principal source of information relating to greenhouse and ozone issues in Australia. The AGO administers the Greenhouse Challenge program, which includes detailed methodologies for calculating greenhouse gas emissions. The Commonwealth Department of Environment and Heritage (Environment Australia) Environment Australia has implemented a number of initiatives to assist business with environmental reporting. The following two publications provide step-by-step guidance on preparing public environmental reporting. A Framework for Public Environment Reporting: An Australian Approach. Environment Australia (March 2000) (also available online) Environmental Reporting: Handbook for Small and Medium Size Businesses. Australian Business Limited (June 2001) (also available online) Commonwealth Department of Family and Community Services (FaCS) FaCS is developing two guides to assist Australian organisations to report on their social and economic performance. Environment Protection and Biodiversity Conservation Act This site contains relevant information pertaining to the EPBC Act 1999, in particular, guidance on biodiversity indicators for nationally significant flora, fauna and sites of ecological significance. Global Reporting Initiative (GRI) The Global Reporting Initiative (GRI) is an international, multi-stakeholder initiative aimed at creating a common global framework for voluntary reporting of the economic, environmental and social impact of organisation-level activity. The GRI mission is to elevate the comparability and credibility of sustainability reporting practices worldwide. The Institute of Social and Ethical AccountAbility AccountAbility is an international, not-for-profit, professional institute dedicated to promoting social, ethical and overall organisational sustainability. Its AA1000 series provides a framework to assist organisations to build accountability and social responsibility through quality social and ethical accounting, auditing and reporting. ISO Standards The ISO series of Standards provides management tools to assist organisations to address environmental risks associated with their operations. The environmental management systems standard ISO provides a framework to identify significant environmental aspects and impacts, and provides a basis for performance improvement. ISO provides guidance on how organisations can evaluate their environmental performance. The standard addresses the selection of suitable performance indicators as a basis for internal and external environmental reporting. ISO Standards are not available free of charge, however information relevant to the Standards and purchase details are available online. Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 65

74 National Pollutant Inventory (NPI) The NPI is a database of key pollution sources across Australia. It contains information for NPI reporters, including access to methodologies for emissions calculations. National Round Table on the Environment and the Economy (Canada) The NRTEE provides a simple framework and methodologies guide for organisations wishing to report eco-efficiency indicators in public environmental reports. It focuses on core eco-efficiency indicators of energy, waste and water intensity. Prime Minister s Community Business Partnership The Prime Minister has asked the Partnership to take forward a national framework of triple bottom line reporting for the corporate sector. In this context the Partnership is currently developing and information statement on TBL that will describe the economic and social value of TBL for Australia from the perspective of business government and community organisations. SustainAbility SustainAbility is a consultancy focusing on sustainable development practices. It provides many relevant online documents regarding how sustainable development philosophies and practices fit within business strategy and the Triple Bottom Line. United Kingdom Department of Environment, Food and Rural Affairs (DEFRA) DEFRA coordinates environmental protection in the United Kingdom. Similar to Environment Australia, it provides online links to United Kingdom strategies and protocols for environmental management. United Kingdom Government Sustainable Development The United Kingdom government has established a Sustainable Development section within its Department of Environment, Food and Rural Affairs to provide leadership to industry and commerce on sustainable development. United Nations Department of Economic and Social Development The UN Department of Economic and Social Development administers a range of programs across economic, environmental and social dimensions. It provides online links to UN initiatives and programs in sustainability, the environment and public reporting, along with links to information and guidance on international environmental and sustainability law, including the Montreal Protocol, the Basel Convention and the Kyoto Protocol. World Business Council for Sustainable Development (WBCSD) The WBCSD is a coalition of 160 international companies united by a shared commitment to sustainable development via the three pillars of economic growth, ecological balance and social progress. The WSBC has prepared Eco-efficiency Guidelines to assist businesses to report on environmental influences in relation to product and service value. These guidelines are available online Environment Australia

75 Appendix D Participating Organisations Australian Chamber of Commerce and Industry Aurion Gold Avcare Australian Greenhouse Office Australian Bureau of Statistics Barton Group Bendigo Bank BP Australia Canegrowers Association Centre for Australian Ethical Research Commerce Queensland Connell Wagner Consolidated Rutile CSR Commonwealth Department of Employment and Workplace Relations Commonwealth Department of Family and Community Services Commonwealth Department of Industry, Tourism and Resources Commonwealth Department of Natural Resources and Environment Victorian Department of Transport and Regional Services Commonwealth Department of Treasury Durham Davis & Associates EcoSTEPS Energex Melbourne Port Corporation Melbourne Water Monash Sustainability Enterprises MIM Holdings Minerals Council of Australia Murray Goulburn Co-operative Company National Pollutant Inventory Ocean Watch Origin Energy Quality Assurance Services Queensland Environmental Protection Agency Resources NSW Rio Tinto Sustainable Energy Authority Victoria SIRIS Sinclair Knight Merz Sydney Water Corporation Thiess Toyota University of Western Sydney Victorian Water Industry Association VicRoads Victorian Environment Protection Authority Westp ac Westpac Governance Advisory Service Worthwhile Projects Ford Motor Company of Australia Global Reporting Initiative Insurance Group Australia KPMG Triple Bottom Line Reporting in Australia A Guide to Reporting Against Environmental Indicators 67

76 E Appendix Evolution of Triple Bottom Line Reporting The concept of public environmental reporting emerged strongly from the United Nations Conference on Environment and Development held in Rio de Janeiro in It was a significant contribution from the business community and was an important step forward, as it allowed organisations to engage with sustainability. In the following decade, leading businesses recognised potential benefits of environmental reporting and began voluntarily disclosing environmental performance in public documents. In response to calls from business and industry in Australia, the Commonwealth Government published the Australian Public Environmental Reporting Framework in The framework is a step-by-step manual for organisations wishing to prepare a public environmental report. The next evolution in voluntary reporting was to expand environmental reporting to include social and economic criteria the Triple Bottom Line (TBL). During the late 1990 s an intense international multistakeholder effort focused on developing a consistent set of TBL indicators for reports led to the release in 2000 of the Global Reporting Initiative s first Sustainability Reporting Guidelines. In September 2002, the GRI updated its Sustainability Reporting Guidelines. These guidelines, which were launched at the World Summit on Sustainable Development in Johannesburg, have been well received by both business and government. Changes include a significantly expanded suite of social and economic indicators, a cross-referenced table so readers can track content and compare reports more readily, and a revised discussion on the principles that underpin sustainability reporting. 68 Environment Australia

77 Appendix F Feedback Form If you have used this Guide or simply would like to contribute to its further evolution so it can more effectively meet the needs of reporting organisations and their stakeholders, we would like to receive your feedback. This can be done either by contacting Environment Australia directly or completing appropriate sections of this form and returning it to: Director Industry Partnerships Team Policy Co-Ordination and Environment Protection Division Environment Australia PO Box 787 CANBERRA ACT 2601 or [email protected] Have you used this Guide in developing or assisting your organisation s environmental reporting program? Has it been useful? Is the information in Part A Why Report on Environmental Performance appropriate and useful for reporters or stakeholders? What additional information could be included to improve this part? Are the environmental management indicators and methodologies appropriate and useful for reporters and stakeholders? How could they be improved? Please cut along here

78 Are the environmental issues categories appropriate and useful for reporters and stakeholders? How could they be improved? Are the environmental performance indicators and methodologies appropriate and useful for reporters and stakeholders? How could they be improved? Are there any additional environmental issues and environmental management and performance indicators and methodologies that should be included? If so please provide details. How can Environment Australia further assist and promote TBL reporting? Please cut along here

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