Building Trust in Methane Emissions: How Traceability and Auditability Help Meet Regulatory, Market, and Investor Demands

In an era where Canadian producers are looking for safe ways and spaces to share traceable and auditable methane data, it can be a competitive advantage for companies that embrace the principles of methane traceability and auditability.

Traceability: The ability to track the source, journey, and destination of emissions data across various stages of a company’s operations. This involves ensuring that every ton emitted can be accurately traced back to a specific process, facility, or activity. Traceability allows for clear, detailed documentation of emissions, to identify and track emission sources, reductions, and offsets over time.

Auditability: The capability of verifying the accuracy, consistency, and completeness of emissions data through an independent review or audit. This means that emissions data is recorded in such a way that external auditors can reliably assess its authenticity and compliance with established standards. Auditability ensures that the reporting process is transparent, follows recognized methodologies, and can withstand scrutiny.

In short, traceability refers to tracking the origin and path of carbon emissions, while auditability ensures that the emissions data can be verified and validated by third parties. Both are essential for robust, trustworthy carbon emissions reporting.

Traceable and auditable accounting of methane emissions is crucial for regulatory compliance (standards), carbon credits and markets (verifiability), investor and stakeholder confidence (proof of informed decisions), corporate reputation (competitiveness), risk management (strategies), and supply chain transparency (meeting demand side expectations).

For effective traceable and auditable methane emissions accounting, robust data management principles and processes must be established and should be supported by appropriate software tools. Like financial accounting, methane accounting can be accurate, consistent, transparent, complete, timely, auditable, and secure. Just as financial accounting adheres to standardized frameworks like GAAP (Generally Accepted Accounting Principles) or IFRS (International Financial Reporting Standards), methane and carbon accounting can follow a recognized international standard such as the Greenhouse Gas (GHG) Protocol, ISO 14064, OGMP 2.0, and others, EU Emissions Trading System (ETS) or California’s Cap-and-Trade Program.

Much like financial assets, emissions and credits recorded on balance sheets and can impact a company’s financial health. Several large companies have started integrating carbon accounting with their financial reporting. These companies recognize that carbon emissions and environmental impacts directly affect their financial health and investor relations. Examples include Microsoft, Unilever, Shell, BP, Tesla, Siemens, and others.

Are you an oil and gas company evaluating how best to provide assurance around your emissions data? Get in touch to learn how software tools like AroViz can support in the process of assurance and verification for oil and gas emissions data.