Sgs Climate Change Program

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BECAUSE GREENHOUSE GAS EMISSIONS MATTER

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GREENHOUSE GAS EMISSIONSMATTER TO USAND OUR FUTURE.THAT’S WHY WE CARE


THE SGS CLIMATE CHANGEPROGRAMME offers a range ofservices addressing the growing needfor mandatory and voluntary reporting ofgreenhouse gas emissions. We aim tofacilitate trade in greenhouse gas (GHG)emissions and promote harmonizationthrough application of standardizedverification procedures. Whether youare in the EU Emission Trading Scheme(ETS), opt out of the EU ETS, have aJoint Implementation (JI) or CleanDevelopment Mechanism (CDM) projector simply want to voluntarily report, wehave the service for you.

Your GHG emissions and emissionreductions matter to us - and our future.That's why we are committed toensuring they are reported in acomplete, consistent, transparent,accurate and faithful manner.

� We validate projects to ensure they comply with the relevant eligibility criteria.

� We verify emissions to determine compliance with mandatory emissionlimits and for voluntary reporting.

� And we certify emission reductions.

YOUR COMPANY, YOURSHAREHOLDERS AND YOURSTAKEHOLDERS NEED TO BESURETHATTHESE DATA ARERELIABLE. YOU CAN TRUST SGS.

WHATEVER YOUR NEEDS,SGS OFFERS YOUAN OPINIONYOU CAN DEPEND ON

We hold multiple accreditations and arecontinuously expanding these. Currentlywe are accredited for CDM, EU ETS, UKETS, California Climate Action Registry(CCAR), Chicago Climate Exchange(CCX) and Clean Air Canada.

We employ competent, trained staffand sub-contractors.We have offices in over 1,000 locationsin 140 countries. We have one close toyour project or your facility.We offer services to all kinds of clients– ranging from the smallest through tothe largest multi-site / multi-countryemitters, and from simple through tocomplex and diverse project portfolios.

All of our services share oneindisputable benefit – they are backedby the SGS brand name.

EU EMISSIONTRADINGSCHEME

EU ETS requires annual reporting ofemissions data and regulatory compliance.To meet the tight deadlines associatedwith EU ETS across the EU 25, we offera split verification process. Every year,in Q3/Q4 we will undertake the strategicanalysis and risk analysis (see Annex 5of the EU ETS Directive,http://europa.eu.int/comm/environment/climat/emission/ implementation_en.htmin order to establish compliance withthe approved monitoring plan. We willalso identify opportunities for improvementand review available data. The followingQ1, we will complete the verification,usually by desk review. This is particularlyimportant in 2005 when issues aremost likely to arise.

ACCREDITATION

We are committed to offering verificationservices throughout the EU. SGS Affiliatesthroughout the EU 25 are either gaininglocal accreditation or planning to useexisting accreditations issued by otherEA Member Accreditation Bodies andrecognized under the EA MultilateralAgreement (www.european-accreditation.org).

With offices and EU ETS trained staff inall of the EU 25 counties, you can beassured of a locally based service withlocal language capability and a knowledgeof local legislation and EU ETS reportingrequirements.

Whether large or small, single or multi-facility, you can rely on SGS.

� Early check on your internal system� Interim data to aid market related

decisions (buy, sell, wait)� Time to raise and resolve issues

with the Competent Authority (CA)� Earlier warning of opportunities for

improvement

WHY CHOOSE THE SPLIT VERIFICATION PROCESS?

SPLIT VERIFICATION TOMEET DEMANDINGDEADLINES

VALIDATIONANDVERIFICATIONOF CDM AND JI PROJECTS

To protect the environmental andfinancial integrity of the CDM and JI, weare accredited to offer rigorous validationservices designed to ensure that projectsgenerate real, long term emissionreductions.

Validation involves a desk study andinternational stakeholder consultationfollowed by confirmation of key dataand assumptions in the host country.We use our network to source localassessors with knowledge of locallanguage, common practice, customsand the prevailing policy and legislativeenvironment.

CDM rules require that a differentDesignated Operational Entity (DOE)performs the services of validation andverification, with the exception of SmallScale CDM projects where the sameDOE can act in both roles.

IF YOU DIDN’T CHOOSE SGS TOVALIDATE YOUR PROJECT...

EB: Conduct and conclude reviewwithin two meetings

CDM project activity registed

Project activity rejected,possibly to start process again

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APPROVED METHODOLOGY

NEW METHODOLOGY

Design of project activity; Submission ofProject Design Document to DOE

DOE: Checks validation requirement

EB

EB: To consider newmethodology

If approved, DOE:Finalises validation

YESRequest for review within 8 weeks

NO

...SGS IS YOUR NATURALPARTNER FOR VERIFICATION AND CERTIFICATION OF CDMAND JI PROJECTS

Verification involves repeated visits tothe project to verify the implementationof the monitoring plan and verification andcertification of emission reductions (ERs).

Turning Emission Reductions into CASHWe believe that we can realisticallyoffer cost effective verification andcertification of ERs on a monthly orquarterly basis, turning an annual yieldof Certified Emission Reductions (CERs)into a regular cash flow. With over1,000 offices in 140 countries, moreoften than not we will be closer to yourproject than anyone else.

Verification experience reduces riskWe know you have worked long andhard and invested heavily to get this far.We have extensive experience ofverification from the UK ETS, EU ETS,CCAR, voluntary projects and otherschemes. Don’t risk any further delay orproblems. Choose a partner with aproven track record.

AND THEFIRST TIMEYOU CROSSTHE LINE,YOU’LLDESERVE ACELEBRATION!

CALIFORNIA CLIMATEACTION REGISTRYThe California Climate Action Registry(CCAR and www.climateregistry.org) isa non-trading register where participantsare invited to register certified (verified)GHG emissions. Two reasons to do soare to create an authoritative record ofan entity’s historic emissions and gainexperience in reporting. Companies canthen make better informed decisionsabout abatement options and will bebetter able to understand the implicationsof California’s legislative regime.

SGS North America Inc. is an accreditedcertifier to the CCAR. We apply thesame principles and procedures toverification in California as we do in theEU ETS, UK ETS and CDM.Consequently, we firmly believe that weare bringing best practice to verificationin the US and we will continue thispractice as we expand our services intoother schemes and initiativesthroughout the US.

CCAR is also developing projectprotocols to include forestry and SGSwill be providing certification services tothese activities as well.

WWW.CLIMATEREGISTERY.ORG

VOLUNTARY ACTIVITIESAND OTHER SCHEMES

SGS verifies voluntary GHG inventoriesthat can be used for public or internalreporting, cost management anddemonstrating to shareholders andregulators that senior management isaware of the potential impact of acarbon constrained economy on thefuture of your business.

SGS is active in a range of other voluntaryschemes such as CCX and CanadaClean Air where third party verification isrequired. As new schemes and initiativesdevelop and the demand for reliablethird party involvement materializes, wewill invest in gaining accreditation tooffer highly credible services.

The SGS Climate Change Programmeoffsets emissions from corporatefunded air travel by purchasing carbonoffsets from CLIPP www.clipp.org

VOLUNTARY PROJECT DEVELOPERS CHOOSESGS BECAUSE OF OUR BRAND NAME.

SGS validates and verifies emissionsreductions from voluntary projects thatare scientifically credible but fail to meetcompliance criteria – usually for politicalreasons. For example, the host countryhas not ratified the Kyoto Protocol orthe project started before 2000. Theprojects must be additional to businessas usual activities, account for leakage,minimize negative environmental andsocial impacts and have infrastructureand resources that will demonstratethat emissions have been avoided.

WHY ARE DATA ANDCOMPLIANCE SOIMPORTANT?GHG emission trading is a market-basedregulatory instrument. Rights to emitGHGs are an asset and the emissionsare a liability. Consequently, significantand sometimes substantial sums ofmoney will need to be passed throughcompany accounts, with impacts uponfinancial performance. Accurate andreliable data is needed to makemanagement decisions. Chief financialofficers and financial accountants willneed to be confident that the data arecorrect before annual accounts can besigned off. Getting the data wrongcould have unpleasant consequences.

Mandatory Emission Trading Schemesalso have compliance requirements.Failure to comply could result in a rangeof penalties, culminating in criminalcharges for directors.

GREENHOUSE GASEMISSIONSMATTERTO US ALL. TAKE THEMSERIOUSLY.

CON

TACT

US:

[email protected]

SGS is the world’s leading inspection,verification, testing and certificationcompany. SGS is recognized as theglobal benchmark for quality andintegrity. With 42,000 employees, SGSoperates a network of about 1,000offices and laboratories around theworld. Our aim is to be the clear globalleader and innovator in inspection,verification, testing and certificationservices, building upon our brand,integrity, unique network and theexcellence of our people.


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Sgs Climate Change Program