The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) is the independent regulator for offshore petroleum and greenhouse gas storage activities in Commonwealth waters. Its mandate is environmental protection, safety, and well integrity. Climate change and greenhouse gas emissions are regulated under its environmental management framework.

Environment Plans (EPs): All offshore activities must have an approved Environment Plan that:

• Identifies and evaluates environmental risks and impacts, including GHG emissions
• Demonstrates impacts are reduced to As Low As Reasonably Practicable (ALARP) and acceptable
• Sets out controls, monitoring, and reporting systems

Greenhouse gas considerations

• Emissions from activities (e.g., flaring, venting, fuel combustion) must be assessed in EPs.
• Climate change impacts and Australia’s national commitments (Paris Agreement targets: 43% below 2005 by 2030, net zero by 2050) must be considered in approvals
• GHG storage (CCS projects) must comply with offshore GHG storage provisions of the Offshore Petroleum and Greenhouse Gas Storage Act 2006

Incident reporting

• Reportable incidents (moderate to significant environmental damage) must be reported to NOPSEMA orally within 2 hours and in writing within 3 days
• Recordable incidents must be reported monthly within 15 days of month end

Guidance materials

• NOPSEMA issues guidance notes, templates, and information papers to help operators prepare EPs and manage compliance
• Guidance covers consultation processes, environmental risk assessment, incident reporting, and greenhouse gas considerations

Is it voluntary or mandatory?

• Mandatory: All titleholders under the Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations 2023 must comply
• Requirements are tied directly to regulatory approval of offshore activities — non-compliance can result in enforcement action, including suspension of operations

Who does it apply to / company size thresholds?

• Applies to all offshore petroleum and greenhouse gas storage titleholders in Commonwealth waters
• No employee size or revenue threshold — obligations attach to the activity, not company size

Key timelines

• 2019–2023: NOPSEMA strengthened focus on greenhouse gas emissions and climate change in environment approvals
• 2023: New Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations commenced, modernising environment management framework
• Current (2025): All EPs must explicitly assess and manage greenhouse gas emissions as part of impact/risk evaluation
• Ongoing: Reporting obligations (incidents, monitoring, compliance submissions) are continuous and activity-based, not tied to financial year

Relevance for oil and gas companies

• Direct regulatory approvals: Offshore operators cannot conduct activities without NOPSEMA-approved EPs that address GHG emissions
• Operational focus: Unlike ISSB or SB 253/261, NOPSEMA does not focus on investor disclosures but on environmental impacts of operations
• Scope limitation: NOPSEMA regulates operational emissions (Scope 1 and 2) within offshore activities, not full value chain Scope 3
• CCS oversight: NOPSEMA regulates offshore CO₂ injection and storage, relevant for oil & gas operators pursuing carbon capture projects
• Risk of non-compliance: Failure to adequately address emissions in EPs can delay approvals, shut down operations, or trigger enforcement

Singapore is one of the first APAC jurisdictions to commit to mandatory ISSB-aligned climate disclosures. The Accounting and Corporate Regulatory Authority (ACRA) and Singapore Exchange Regulation (SGX RegCo) are co-leading implementation. The rules require listed and large non-listed companies to disclose climate-related information in line with the ISSB’s IFRS S2.

Framework: Full alignment with ISSB IFRS S2 Climate-related Disclosures, integrated into sustainability reporting.

Scope of disclosures:

• Governance, strategy, risk management, metrics and targets
• Scenario analysis for resilience testing
• Scope 1 and Scope 2 GHG emissions disclosure mandatory
• Scope 3 emissions disclosure mandatory, phased in one year later

Assurance

• Limited assurance required for Scope 1 and 2 emissions, phased in
• Listed issuers: FY2027
• Large non-listed: FY2029
• Publication: Annual sustainability reports must be published together with annual financial reports, on company websites and filed with ACRA

Is it voluntary or mandatory?

• Mandatory, phased by entity type and size

Who does it apply to / company size thresholds?

• Listed issuers: All companies listed on the Singapore Exchange (SGX).

Large non-listed companies: Defined as those meeting at least two of the following criteria in each of the previous two financial years:

• Revenue ≥ SGD 1 billion
• Total assets ≥ SGD 500 million
• 1,000 or more employees

Key timelines

• FY starting 2025: Listed issuers must disclose Scope 1 and 2 emissions, governance, risk management, strategy
• FY starting 2026: Listed issuers must add Scope 3 disclosure (if material)
• FY starting 2027: Limited assurance of Scope 1 and 2 emissions required for listed issuers
• FY starting 2027: Large non-listed companies must disclose Scope 1 and 2
• FY starting 2029: Large non-listed companies must disclose Scope 3 and obtain limited assurance for Scope 1 and 2

Relevance for oil and gas companies

• Scope 3 exposure: Oil & gas companies with Singapore listings will need to disclose full value-chain emissions, not just operational
• Investor and regulator pressure: Singapore is a global energy trading hub; transparent reporting is critical for investor confidence
• Operational challenge: Offshore operators and FPSOs with Singapore parent or financing links will need assurance-ready data systems to meet requirements
• Capital access: As disclosures are embedded into SGX listing rules, non-compliance could impact capital raising and investor relations

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Malaysia is transitioning its ESG reporting framework to align with the ISSB (IFRS S1 and IFRS S2). Bursa Malaysia has required sustainability disclosures since 2016, but in September 2022 it issued an enhanced Listing Requirements on Sustainability Reporting, and in September 2024 it confirmed a roadmap for ISSB-aligned climate reporting. These rules apply to all Main Market and ACE Market listed issuers, with timelines phased by company size.

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Annual Sustainability Statement in annual reports, covering:

• Governance, strategy, risk management, metrics and targets
• Climate-related disclosures aligned with ISSB IFRS S2
• Scope 1 and Scope 2 GHG emissions disclosure mandatory
• Scope 3 disclosure required where material, with a phased timeline
• Climate risk assessment, including transition and physical risks

Assurance

• Limited assurance of Scope 1 and Scope 2 emissions disclosure required, phased in starting with large companies
• Later expansion to broader assurance on sustainability information
• Materiality: Dual approach covering financial materiality (investor-focused) and environmental/social impact materiality

Is it voluntary or mandatory?

• Mandatory for all listed issuers on Bursa Malaysia’s Main and ACE Markets
• Phased implementation means large companies adopt earlier, but smaller issuers are also obligated

Who does it apply to / company size thresholds?

• Main Market listed issuers: Obligated first, with timelines tied to market capitalisation
• ACE Market issuers: Obligated on a later schedule
• No thresholds based on employees — the trigger is listing status and market cap tier

Key timelines

• 2022: Enhanced Bursa Malaysia Listing Requirements issued
• FYs ending 31 December 2025: Largest Main Market issuers (market cap ≥ RM 2 billion) begin mandatory climate reporting aligned to IFRS S2, including Scope 1 & 2
• FYs ending 31 December 2026: Next tier of Main Market issuers phased in
• FYs ending 31 December 2027: All remaining Main Market issuers in scope
• FYs ending 31 December 2028: ACE Market issuers phased in
• By 2027–2028: Limited assurance of Scope 1 and 2 emissions required for large issuers

Relevance for oil and gas companies

• Sector relevance: Bursa Malaysia has numerous oil & gas service companies and PETRONAS-linked entities; all will need to disclose climate-related risks, emissions, and transition strategies
• Scope 3 exposure: For upstream and refining operators, Scope 3 disclosure will become material due to export value chains and downstream use of hydrocarbons
• Investor expectations: Malaysia’s alignment to ISSB raises comparability to Singapore, Hong Kong, and Japan, meaning international investors will expect consistent disclosures
• Operational readiness: Oil and gas issuers will need strong emissions data systems, assurance-ready processes, and climate risk scenario analysis tied into financial reporting

China is moving quickly toward mandatory ESG and climate disclosures, using its stock exchanges (Shanghai Stock Exchange, Shenzhen Stock Exchange, Beijing Stock Exchange) to set rules for listed companies, while also expanding direct emissions reporting requirements for energy-intensive sectors.

Stock Exchange ESG disclosure (Shanghai, Shenzhen, Beijing)

• Scope: All listed companies must publish an annual sustainability/ESG report
• Content: Must follow the China Sustainability Disclosure Standards for Listed Companies issued by CSRC (China Securities Regulatory Commission) in April 2024

Coverage

• Governance of ESG matters
• Environmental indicators including Scope 1 and Scope 2 GHG emissions
• Scope 3 required if material
• Transition risks, targets, energy efficiency, and pollution control measures
• Framework alignment: Heavily influenced by ISSB IFRS S1 and S2, but tailored to Chinese regulatory and policy context

Sector-specific emissions reporting

• Mandatory GHG emissions reporting applies to companies in key industries, including:
• Power generation
• Petrochemicals and oil refining
• Iron and steel
• Non-ferrous metals (aluminium, copper)
• Cement and building materials
  Aviation
• Data is used to underpin China’s national emissions trading system (ETS), currently covering the power sector and expected to expand to oil refining, cement, and steel later this decade

Is it voluntary or mandatory?

• Stock exchange disclosures: Mandatory for all listed companies, starting with phased requirements from 2025 annual reports (for FY2024 data)
• Sectoral emissions reporting: Mandatory for entities above activity/size thresholds in designated industries

Who does it apply to / company size thresholds?

• Listed companies: All issuers on SSE, SZSE, BSE. No employee threshold — applicability is based on listing status
• Sector reporters: Thresholds set by the MEE, usually based on annual energy use, output, or emissions volumes. For example, power plants above 35 MW capacity are in scope; refineries above certain throughput thresholds are covered

Key timelines

• April 2024: CSRC issues Sustainability Disclosure Standards for Listed Companies
• FY2024 (reports filed in 2025): Mandatory ESG/sustainability reporting starts for Main Board companies and companies in emissions-intensive industries
• FY2026 onward: Expansion to all listed companies across exchanges, including Growth Enterprise Market (ChiNext) and STAR Market issuers
• Mid-2020s: MEE expected to expand ETS coverage to include oil refining, steel, aluminium, and cement — which will trigger mandatory emissions data reporting for those sectors

Relevance for oil and gas companies

• Direct exposure: Oil refining and petrochemicals are explicitly listed as covered sectors for mandatory emissions reporting
• Financial disclosure: If listed on SSE/SZSE/BSE, oil & gas firms must publish ESG reports with emissions data, climate risk, and energy transition strategies
• ETS implications: Refinery and petrochemical facilities are expected to be pulled into the national carbon market within this decade, requiring verified emissions data for allowance trading
• Investor scrutiny: Alignment with ISSB standards means Chinese-listed oil & gas companies must now meet similar expectations as global peers on climate risk, Scope 3 relevance, and transition planning

In April 2023, the Hong Kong Stock Exchange (HKEX) proposed and then confirmed new climate disclosure rules that bring Hong Kong into alignment with the ISSB’s IFRS S2 standard. These requirements significantly upgrade the ESG Reporting Guide in the HKEX Listing Rules, shifting climate disclosure from “comply or explain” to mandatory for listed companies, with phased timelines.

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Scope of disclosures: Climate-related disclosures aligned to IFRS S2 / TCFD, covering:

• Governance of climate risks and opportunities
• Strategy and resilience, including scenario analysis
• Risk management approach
• Metrics and targets

Emissions reporting

• Scope 1 and Scope 2 GHG emissions disclosure is mandatory
• Scope 3 disclosure required where material, with a transition period
• Climate targets: Companies must disclose climate targets (if any), how they are set, and progress against them
• Financial linkages: Entities must explain how climate-related risks and opportunities affect business model, strategy, and financial planning
• Scenario analysis: Large-cap issuers must perform and disclose scenario analysis to test resilience against climate pathways

Is it voluntary or mandatory?

• Previously: ESG reporting under HKEX was “comply or explain.”
• Now: Climate-related disclosures are mandatory, phased in by company size and market category

Who does it apply to / company size thresholds?

• Applies to all Main Board listed companies
• LargeCap issuers (companies with market capitalisation HKD 30 billion or above) are subject to earlier and fuller compliance deadlines
• Smaller issuers follow on a later schedule

Key timelines

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Financial years starting on or after 1 January 2025:

• All Main Board issuers must report Scope 1 and Scope 2 emissions and provide basic climate disclosures, on a comply-or-explain basis

Financial years starting on or after 1 January 2026:

• LargeCap issuers (≥ HKD 30 billion market cap) must fully comply with the New Climate Requirements, aligned to IFRS S2
• This includes scenario analysis and expanded disclosures on strategy, risk, targets, and metrics

Beyond 2026:

• Phased expansion to mid-cap and then all Main Board issuers, with Scope 3 disclosure ramping up where material
• HKEX has indicated further guidance and enforcement steps through 2027–2028

Relevance for oil and gas companies

• High scrutiny sector: Oil and gas firms listed in Hong Kong will face mandatory disclosure of full Scope 1 and 2 emissions and eventually Scope 3 — critical given >90% of sector emissions typically fall in the value chain
• Investor expectations: HK is a major capital-raising hub; international investors will expect audit-ready, IFRS S2-aligned climate disclosures
• Scenario analysis pressure: Companies must demonstrate resilience under 1.5°C–2°C scenarios, highlighting risks of stranded assets, policy shifts, and demand decline
• Operational impact: Audit-ready GHG accounting systems and board-level oversight will be required, integrated with financial reporting cycles

California has enacted two landmark climate disclosure laws, SB 253, the Climate Corporate Data Accountability Act, and SB 261, the Climate-Related Financial Risk Act, that move large companies doing business in California from voluntary to mandatory climate transparency. Regulators are finalizing implementation, and courts have declined requests to pause the laws, so initial reporting timelines remain in place.

SB 253 – Climate Corporate Data Accountability Act

• Who is in scope: US-organized entities of any type with total annual revenue over 1 billion dollars that do business in California, public or private. Applicability is determined using prior fiscal-year revenue
• What to disclose: Annual Scope 1, Scope 2 and Scope 3 GHG emissions in line with the GHG Protocol, filed to CARB or a designated emissions reporting organization
• Assurance: Independent third-party assurance is required. Limited assurance for Scopes 1 and 2 begins with first filings, moving to reasonable assurance for Scopes 1 and 2 by 2030. CARB may require limited assurance for Scope 3 from 2030, and can adjust timing in rulemaking
• Deadlines: Scope 1 and 2 disclosure starts in 2026 for FY2025 on a date to be set by CARB. CARB has floated June 30, 2026 for the first Scope 1 and 2 reports. Scope 3 disclosure starts in 2027 on a schedule CARB will set
• Enforcement cadence: CARB has signaled an initial good-faith compliance grace approach in 2026, while still expecting timely filings. Penalties for nonfiling or late filing will be available to CARB via regulation

SB 261 – Climate-Related Financial Risk Act

• Who is in scope: US-organized entities with over 500 million dollars in annual revenue that do business in California. Insurers are exempt because they report under the NAIC climate risk regime. Subsidiaries need not report separately if covered by a parent’s consolidated report
• What to disclose: A public, biennial report describing material climate-related financial risks and the measures adopted to reduce and adapt to those risks. Reports should align with TCFD or an equivalent framework, for example IFRS S2 from the ISSB
• How to publish: Post the report on the company website, then submit the public link to CARB’s docket as specified in guidance. Parent-level consolidation is allowed
• First due date: January 1, 2026, then every two years

Relevance for Oil and Gas Companies

• High materiality and Scope 3 exposure: Oil and gas typically see the majority of emissions in Scope 3, which SB 253 requires from 2027 on CARB’s schedule. Expect heightened scrutiny of value-chain accounting and end-use methodologies, plus phased assurance
• Financial risk focus: SB 261 requires disclosure of physical risks, for example wildfire and extreme weather impacts on assets and logistics, and transition risks, for example policy shifts, demand changes and carbon pricing. Governance and board oversight must be explained
• Audit-ready data and controls: Given assurance and tight timelines, operators will need a single source of truth across facilities, JVs and contractors, with clear ERIs and controls that map to GHG Protocol categories and TCFD or IFRS S2 risk constructs

When is it coming into effect?

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SB 253:

• 2026: Scope 1 and 2 reporting for FY2025, date to be set by CARB, proposed June 30, 2026. Limited assurance begins
• 2027: Scope 3 reporting begins on a CARB-set schedule for FY2026
• 2030: Reasonable assurance required for Scopes 1 and 2. CARB can require limited assurance for Scope 3 from 2030

SB 261:

• January 1, 2026: First climate-related financial risk reports due and publicly posted, then every two years, with link submission to CARB’s docket

Other live points to track:

• Rulemaking details are still being finalized: CARB workshops in 2025 have previewed definitions, fee proposals and practical deadlines, including a proposed definition of revenue tied to California tax code. Watch for final rules by year-end 2025
• Litigation status: Federal courts twice declined to enjoin SB 253 and SB 261 in August and September 2025, and an appeal is pending. Companies should proceed on the current timetable

The EU Taxonomy is a framework that defines which economic activities are considered environmentally sustainable. It helps investors and companies assess whether their operations align with the EU’s climate and environmental goals.

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To qualify as “Taxonomy-aligned,” an activity must:

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1. Substantially contribute to at least one of six environmental objectives:

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• Climate change mitigation

• Climate change adaptation

• Sustainable use of water and marine resources

• Transition to a circular economy

• Pollution prevention and control

• Protection of biodiversity and ecosystems

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2. Do no significant harm (DNSH) to any other environmental objective.

3. Meet minimum social and governance safeguards, such as labour and human rights standards.

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1. Limited Recognition for Fossil Fuel Activities

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• The EU Taxonomy mostly excludes oil and gas from sustainable classification, except in cases where companies are involved in low-carbon energy solutions (e.g., hydrogen, carbon capture, and storage).

• Natural gas power generation is classified as a “transitional” activity but must meet strict GHG emission limits to be considered sustainable.

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2. Investment & Financial Risks

• Investors and banks must disclose the proportion of their assets that align with the EU Taxonomy, influencing their investment decisions.

• Oil and gas companies with high exposure to non-taxonomy-aligned activities may face divestment risks, higher financing costs, or limited access to green capital markets.

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3. Compliance & Reporting Requirements

• Large EU companies (500+ employees) must disclose how much of their revenue, CapEx, and OpEx align with the EU Taxonomy.

• Oil and gas companies must prove significant emission reductions, circular economy contributions, or carbon capture efforts to qualify for sustainable classification.

The SFDR is an EU regulation that enhances transparency in sustainable investments by requiring financial firms to disclose how they integrate ESG factors into their investment decisions. It categorises financial products into three levels based on sustainability criteria:

• Article 6 – No sustainability focus

• Article 8 – Promotes environmental/social characteristics

• Article 9 – Has sustainable investment as its objective

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While SFDR does not directly regulate oil and gas companies, it significantly influences their ability to attract investment. Firms that fail to demonstrate strong ESG practices may struggle to secure funding from EU financial institutions that must comply with SFDR’s sustainability disclosure and investment screening requirements.

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• Reduce greenwashing by ensuring clear, comparable sustainability disclosures

• Help investors assess ESG risks and opportunities

• Align with the EU’s broader Sustainable Finance Agenda, including the EU Taxonomy and Corporate Sustainability Reporting Directive (CSRD)

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Implementation & Compliance:

• Came into effect on March 10, 2021 with phased implementation.

• The Level 2 Regulatory Technical Standards (RTS), specifying detailed reporting requirements, became applicable on January 1, 2023.

Streamlined Energy and Carbon Reporting (SECR) is a framework established by the UK government for mandatory reporting of energy and carbon emissions by certain organizations. SECR requires companies to report their energy use, energy efficiency and greenhouse gas emissions in their annual reports, and to set intensity-based reduction targets for energy and carbon emissions. The goal of SECR is to encourage organizations to reduce their energy consumption and greenhouse gas emissions, and to provide investors and other stakeholders with transparent and comparable information on the environmental performance of companies. SECR is mandatory for large UK companies and large LLPs (Limited Liability Partnerships) that are required to report under the Companies Act 2006. This includes companies on the main market of the London Stock Exchange and companies with over 250 employees.

All UK businesses in the following three categories have to comply, unless they meet certain exemption criteria:

• Quoted companies (i.e. listed on the stock market)
• Large unquoted companies
• Large limited liability partnerships (LLPs)

Companies and LLPs are defined as large if they meet two or more of the following criteria:

• A turnover of £36 million or more;
• A balance sheet of £18 million or more; or
• 250 employees or more.

Large unquoted companies and LLPs are exempt from reporting if they can show that their energy use is less than 40 MWh over the reporting period.

According to the UK’s SECR legislation, quoted companies must report:

• Scope 1 and 2 emissions: They are encouraged to also report Scope 3 emissions, but this is voluntary.
• At least one intensity ratio: Intensity ratios compare emissions data with an appropriate business metric or financial indicator, such as sales revenue or square meters of floor space.
• Energy efficiency actions: A narrative description of the principal measures taken for the purpose of increasing the businesses’ energy efficiency in the relevant financial year.

Large unquoted companies and LLPs  must report:

• UK energy use (as a minimum gas, electricity and transport, including UK offshore area) and associated GHG emissions.
• At least one intensity ratio: Intensity ratios compare emissions data with an appropriate business metric or financial indicator, such as sales revenue or square meters of floor space.
• Energy efficiency actions: A narrative description of the principal measures taken for the purpose of increasing the businesses’ energy efficiency in the relevant financial year.

The Task Force on Climate-related Financial Disclosures (TCFD) is an organization established by the Financial Stability Oversight Council (FSOC) with the goal of providing recommendations for voluntary climate-related financial disclosures. The TCFD's recommendations are intended to help companies identify and disclose information that would be material to the understanding of their exposure to risks and opportunities related to climate change. The main goal of the TCFD is to increase transparency and accountability of companies on their climate-related risks and opportunities and provide useful information for investors, lenders, insurers and other stakeholders to assess the long-term value of companies.

• All UK businesses with more than 500 employees traded on a UK regulated market, as well as banking and insurance companies.
• All UK companies and LLPs with more than 500 employees and over £500M in turnover.

• Companies must report on their governance, strategy, risk management, targets, and metrics with respect to climate-related risks and opportunities.
• Companies must disclose their  scope 1,  scope 2, and, if appropriate,  scope 3 emissions.

The Securities and Exchange Commission (SEC) is an independent federal agency that oversees the securities industry and protects investors. In relation to the environment, the SEC plays a role in ensuring that companies disclose accurate and relevant information about the material risks and impacts of climate change and environmental issues on their business operations and financial performance. The SEC has issued guidance to companies on the disclosure of climate-related risks in their financial filings, and has taken enforcement actions against companies that have failed to provide adequate disclosure of such risks. Additionally, SEC has also issued interpretive guidance on the use of Non-GAAP measures and encourage companies to include Environmental, Social, Governance (ESG) information in their financial filings. The SEC also monitors the activities of companies and investors to ensure compliance with securities laws and regulations, and to detect and prevent fraud and other forms of misconduct related to environmental issues.

Among other things, companies would need to disclose the following:

• Scope 1 and scope 2 emissions
• Scope 3 emissions, if they are material or if the company has set scope 3 targets (small companies are exempt from this requirement)
• Governance of climate risks
• The material impact of climate risks on its business
• The impact of climate risks on strategy and business model
• The impact of climate-related events (e.g. severe weather) on items of their consolidated financial statements

The EU Directive on corporate sustainability due diligence is essential for companies to understand due to its broad implications on corporate governance and value chain management.

Here's a concise overview:

Scope and Purpose:The directive aims to foster sustainable and responsible corporate behaviors by integrating human rights and environmental considerations into corporate activities and governance. Companies are expected to identify, address, and report on negative impacts within their operations and their value chains. This is both inside and outside Europe, ensuring a responsible global footprint.

Core obligations:

1. Due Diligence Duty: Companies must establish processes to identify, prevent, and mitigate adverse human rights and environmental impacts resulting from their activities or those of their subsidiaries and value chains.
2. Climate Alignment: Large companies must also ensure that their business strategies align with the goal of limiting global warming to 1.5 °C as per the Paris Agreement.

Implications for companies:

• Legal Framework: The directive creates a harmonized legal framework across the EU, enhancing legal certainty and fostering a level playing field.
• Risk Management: Companies will need to enhance their risk management processes to address potential environmental and human rights impacts proactively.
• Financial and Competitive Advantages: Compliance could increase attractiveness to investors and customers focused on sustainability, potentially leading to better access to finance and markets.
• Innovation and Reputation: The directive encourages innovation and can significantly boost a company’s reputation by demonstrating commitment to sustainable practices.

Directors' duties:

• Directors are tasked with integrating due diligence into the corporate strategy and must consider the broader consequences of their decisions on human rights, the environment, and climate change.

Affected companies:

• The directive targets large EU companies and other high-impact sectors with substantial turnover and employee thresholds. It also applies to certain non-EU companies operating in the EU.

Enforcement and compliance:

• Enforcement will be carried out through administrative supervision at the national level and coordinated through a European network, ensuring consistency. Civil liability provisions will ensure that companies can be held accountable for non-compliance.

This directive marks a significant step in ensuring that companies operating in the EU adopt more sustainable and responsible business practices. As such, it is crucial for businesses to prepare adequately for its implementation to leverage the opportunities it presents and mitigate any potential risks.

Penalties

Companies that fail to comply with the EU's Corporate Sustainability Due Diligence risk being faced with a compliance order, or even large financial penalties based on the company's turnover. These penalties include fines of up to 5% of companies' net worldwide turnover.

Impact on energy companies

As an executive in an energy company, the CSDDD represents a significant shift towards more accountable and sustainable business practices. The directive will require energy companies to:
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• Enhance Due Diligence Processes: Strengthen existing due diligence frameworks to meet the new EU standards, which may involve additional resources and investments in compliance infrastructure.
• Broaden Scope of Responsibility: Extend sustainability efforts beyond direct operations to include all partners in their value chain, which could complicate relationships and contracts with third-party suppliers and business partners.
• Prepare for Legal and Financial Risks: Understand the potential legal implications and financial risks associated with non-compliance, including fines and reputational damage.

Compliance challenges

Implementing the CSDDD will pose several challenges:
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• Complex Value Chains: As an energy company, the value chain is extensive and complex, making it challenging to monitor and ensure compliance across all levels.
• Increased Costs: The need for enhanced due diligence and compliance mechanisms will likely result in increased operational costs.
• Stakeholder Engagement: There will be a need to engage more actively with stakeholders, including civil society and local communities, to ensure operations align with broader human rights and environmental standards.
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In conclusion, the CSDDD mandates comprehensive sustainability and due diligence practices that will significantly impact how energy companies operate within the EU. It necessitates a strategic review of current practices and potentially substantial adjustments to business operations and compliance strategies.

The Corporate Sustainability Reporting Directive (CSRD) is a directive of the European Union (EU) that requires certain large companies to report on their environmental, social, and governance (ESG) performance. The companies that have to comply with the CSRD are the ones that meet two of the following three criteria:

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• an average of at least 500 employees during the financial year;
• a balance sheet total of at least €20 million;
• an annual net turnover of at least €40 million.

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In addition, listed SMEs, and non-EU-based companies with subsidiaries or securities in the EU must also comply with CSRD.

The CSRD was signed into law on November 10 2022 and is set to replace the NFRD, starting in the financial year 2024. Listed SMEs are given until 2027 to comply.

These companies will have to provide a non-financial statement as part of their management report and disclose information on their policies, risks, and outcomes related to environmental, social, employee-related matters, respect for human rights, anti-corruption and bribery matters and diversity. The CSRD is also known as the Non-Financial Reporting Directive (NFRD) The directive aims to improve the transparency and accountability of companies on their sustainability performance and to support investors, consumers, and other stakeholders in assessing the long-term sustainability of companies.

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Under the CSRD, companies must report on five core areas:

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• Business model (e.g. resilience to climate-related risks)
• Policies (e.g. measurable sustainability targets, due diligence processes implemented).
• The outcome of those policies.
• Risks and risk management (principal sustainability risks and how they are managed).
• Key performance indicators:
• Full scope 1, 2, and 3 emissions
• Energy consumption
• Intensity ratios (e.g. emissions per unit revenue)

The European Green Deal's Corporate Sustainability Reporting Directive (CSRD) mandates over 50,000 companies, including large, listed, and third-country companies with EU undertakings, to report sustainability information under the European Sustainability Reporting Standards (ESRS). Reporting starts on or after 1 January 2024 for large public-interest companies, banks, and insurance companies already under the Non-Financial Reporting Directive (NFRD); 1 January 2025 for other large companies; and 1 January 2026 for small or medium-sized entities and other undertakings. The CSRD and ESRS incorporate double materiality, prospective information, information about the upstream and downstream value chain, and sustainability due diligence into their reporting requirements. All sustainability information in the management report must be verified by a third party. The first set of ESRS were approved in November 2022 and emphasizes the importance of tackling climate change. The ESRS aim to harmonize with various other standards like ISSB, TCFD, and GRI to avoid repeated disclosure efforts by companies. The ESRS will bring topics previously limited to voluntary reporting into the realm of regulatory requirements under the CSRD.

On April 21, 2021, the European Commission (EC) proposed the Corporate Sustainability Reporting Directive (CSRD) requiring companies to report according to European Sustainability Reporting Standards (ESRS), with the European Financial Reporting Advisory Group (EFRAG) serving as the technical advisor. The first draft of ESRS was released for public consultation by EFRAG on April 29, 2022, with the process concluding in August 2022. After reviewing all feedback, the EFRAG Sustainability Reporting Board and Technical Expert Group approved a first set of ESRS on November 15, 2022, to be submitted to the EC, which is expected to adopt these standards by June 2023. This first set of ESRS consists of 12 standards covering environmental, social, and governance matters and includes both general and specific standards. Future plans include the publication of sector-specific standards and standards for small and medium-sized enterprises (SMEs) not covered in the public consultation. The Council approved the proposal on November 28

When do companies have the obligation to report sustainability information according to the ESRS?

The proposed CSRD shall apply for financial years starting on or after 1 January 2023, but based on the latest communication of the Council of the European Union, deadlines for implementation by companies (EU refers to undertakings) are proposed to change to:
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• 1 January 2024 for undertakings already subject to the Non-Financial Reporting Directive (reporting in 2025 on 2024 data)
• 1 January 2025 for large undertakings not currently subject to the Non-Financial Reporting Directive (reporting 2026 on 2025 data)
• 1 January 2026 for listed small and medium-sized enterprises, as well as for small and noncomplex credit institutions and for captive insurance undertakings (reporting in 2027 on 2026 data)

Is assurance mandatory?

Assurance of the sustainability reporting is proposed to be mandatory at the limited level, planning a transition to reasonable assurance in the upcoming years.

What is the period covered by the sustainability reporting?

The sustainability reporting period should be aligned to the reporting period used for the financial statements.

When will it be enforced on the NCS?

Scope 1, 2 & 3 to be enforced on the NCS as from 01.01.2024

Overview of the initial steps

The first set of European Sustainability Reporting Standards (ESRS) establishes a structure for reporting sustainability information in a comprehensive manner. It includes four main reporting areas as set out in ESRS 2. These areas are:
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1. Governance: This pertains to the processes, controls, and procedures used for monitoring and managing impacts, risks, and opportunities.
2. Strategy: This considers how a company's strategy and business models interact with material impacts, risks, and opportunities, and the approach to addressing them.
3. Impact, Risk, and Opportunity Management: This involves the processes by which impacts, risks, and opportunities are identified, assessed, and managed through policies and actions.
4. Metrics and Targets: This describes how a company measures its performance, including progress towards the targets it has set.

The first set of draft standards under the European Sustainability Reporting Standards (ESRS) includes only cross-cutting and sector-agnostic standards. Sector-specific standards and those proportionate for Small and Medium Enterprises (SMEs) are still under development and will be presented for separate public consultation in the near future. Companies are required to include the sustainability information mandated by the ESRS in their management reports.

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Japan’s Sustainability Standards Board of Japan (SSBJ), under the Financial Services Agency, issued its first sustainability disclosure standards in March 2025. These adopt the ISSB’s IFRS S1 (general sustainability disclosure) and IFRS S2 (climate disclosure) almost in full, with modifications tailored to Japan’s capital markets. The standards apply primarily to listed companies on the Tokyo Stock Exchange (TSE) Prime Market, phasing in by market capitalisation.

• Governance, strategy, risk management, metrics & targets disclosures in line with IFRS S1
• Climate disclosures under IFRS S2: physical risks, transition risks, resilience, climate scenario analysis
• Emissions: Scope 1, Scope 2, and Scope 3 GHG emissions if material
• Link to financial reporting: sustainability information must be reported alongside financial statements, in annual securities reports
• Industry-specific metrics: companies expected to draw on SASB / industry guides to identify material disclosures
  

Is it voluntary or mandatory?

• Voluntary from FYs ending on or after March 31, 2026
• Mandatory phased in from FYs ending March 31, 2027, depending on company size.

Who does it apply to / company size thresholds?

• Applies to listed companies, beginning with the largest market cap firms
• Thresholds:
• Companies with market cap ≥ JPY 3 trillion: mandatory from FYs ending March 2027
• Companies with market cap ≥ JPY 1 trillion: mandatory from FYs ending March 2028
• Other listed companies phased in later, likely into the 2030s
• No employee count threshold is used, only market capitalisation

Key timelines

• March 2025: Standards formally issued by SSBJ
• FYs ending March 31, 2026: Voluntary application begins
• FYs ending March 31, 2027: Mandatory for companies ≥ JPY 3 trillion market cap
• FYs ending March 31, 2028: Mandatory for companies ≥ JPY 1 trillion market cap
• 2030s: Broader adoption expected across remaining listed companies

Relevance for oil and gas companies

• High exposure because disclosures require detailed Scope 1, 2, and 3 data, with Scope 3 particularly material for oil and gas
• Climate scenario analysis will stress-test long-term viability of reserves, LNG, and upstream projects under transition scenarios
• Assurance and alignment with annual securities filings mean Japanese investors will expect audit-ready, finance-linked disclosures
• Japan is a key LNG importer and host to upstream investments; foreign oil and gas operators with Japanese listings or significant investor base will face pressure to align

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The International Sustainability Standards Board (ISSB), under the IFRS Foundation, has issued global baseline standards for sustainability-related financial disclosures:

• IFRS S1: General Requirements for Disclosure of Sustainability-Related Financial Information
• IFRS S2: Climate-Related Disclosures

These are intended to provide investor-focused, comparable, and decision-useful ESG / climate risk disclosures, globally.

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IFRS S1 requires:

• Disclosure of sustainability-related risks and opportunities that are reasonably expected to affect the entity’s cash flows, financial position, or performance
• Governance, strategy, risk management, metrics & targets, across material sustainability issues (not just climate)
• Use of industry-based metrics (e.g., SASB / similar) for material issues

IFRS S2 adds:

• Specific climate-related disclosures including physical risk, transition risk, resilience, scenario analysis
• Emissions reporting: Scope 1, Scope 2, and, if material, Scope 3 GHG emissions
• Climate-related targets, how targets are set, progress, how climate risk is managed

Key timelines

• Global baseline, IFRS S1 and IFRS S2: effective for annual periods beginning on or after 1 January 2024, voluntary unless adopted by a jurisdiction
• Hong Kong, HKEX “New Climate Requirements” aligned to IFRS S2
• Effective on a comply-or-explain basis from 1 January 2025 for all Main Board issuers
• Mandatory from 1 January 2026 for Large Cap issuers, with phased items thereafter  
• Singapore, ISSB-aligned climate-related disclosures
• Listed issuers: FY2025 start for Scope 1 and 2, with Scope 3 from FY2026
• Large non-listed companies: FY2027 start for Scope 1 and 2, limited assurance phases in later (listed FY2027, large non-listed FY2029)
• Regulators confirmed extended timelines in August 2025 while keeping the FY2025 start for listed issuers’ emissions metrics  
• Malaysia, National Sustainability Reporting Framework, Bursa Malaysia
• Phased ISSB adoption beginning 1 January 2025 for the largest Main Market issuers, extending to others in 2026
• Full climate reporting aligned to IFRS S2 and broader ISSB compliance maturing by 2027–2028 depending on issuer category  
• Japan, SSBJ Sustainability Disclosure Standards (ISSB-based)
• Standards issued March 2025
• Voluntary reporting available for FYs ending March 31, 2026
• Mandatory for companies with ≥ JPY 3 trillion market cap for FYs ending March 31, 2027, extending to ≥ JPY 1 trillion for FYs ending March 31, 2028

Relevance for Oil & Gas Companies

• Oil & gas companies typically have large Scope 1, 2 and substantial Scope 3 emissions; IFRS S2 puts explicit requirement (where material) for Scope 3 reporting, increasing visibility of value-chain and end-use emissions
• Need for scenario analysis (transition & physical risks) affects upstream, midstream, and downstream assets ‒ how resilient are assets under carbon pricing, demand decline, policy change, climate impact for operations
• Governance, targets, risk management must be robust and tied into financial reporting. Enables investor scrutiny, capital allocation risk, stranded asset risk
• Assurance / verification expectations are rising; even if not required by the standard initially, jurisdictions tend to require third-party assurance once mandated

When will it become binding in relevant APAC jurisdictions?

• Singapore: 2025 for listed; 2027 for large non-listed
• Malaysia: Main Market listed by end 2027
• Hong Kong: Full climate disclosure (aligned with IFRS S2) for LargeCap from FY commencing Jan 2026
• Japan (SSBJ): Exposure drafts in place; expected effective dates around financial year ending ~2025 for Prime Market listed companies

Climate Active is the Australian Government’s voluntary carbon neutral certification program. It recognises businesses, products, services, buildings, events and precincts that measure, reduce and offset emissions to achieve carbon neutrality within a defined boundary. Certification is administered by the Department of Climate Change, Energy, the Environment and Water, and certified claims are made public via a Climate Active Public Disclosure Statement.

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Scope and who it applies to:

• Voluntary certification, open to Australian and international entities that want to claim carbon neutrality for an organisation or a defined offering, for example a product, service, event, building or precinct
• What to do: Define the boundary and inventory: Prepare a GHG inventory for the chosen certification, following the Climate Active Carbon Neutral Standard and Technical Guidance Manual. These map to the GHG Protocol and Australian practice, including NGER factors
• Reduce emissions: Document reduction activities and targets as part of the certification application
  Offset residual emissions: Purchase and retire eligible offsets listed in the Standard and Technical Guidance Manual, then reconcile these in the application
• Publicly disclose: Publish a Public Disclosure Statement, PDS on the Climate Active website that sets out the boundary, methods, emissions and offsets used

Validation and assurance

• Third-party validation is required. Climate Active applies a risk-proportionate validation schedule by certification type and size. The June 2024 Third-Party Validation requirements document details evidence expectations and scheduling. Technical assessments are performed on application and periodically thereafter

Timing and cadence

• Annual cycle: Participants update inventories and offsets annually and keep the PDS current on the Climate Active site. Periodic independent validation occurs per the program’s schedule

Relevance for oil and gas companies

• Use cases: While Climate Active is not a regulatory scheme, it is widely used for voluntary carbon neutral claims at the corporate level or for offerings such as carbon neutral fuels, LNG cargoes, or services. Certification requires audit-ready inventories and credible offsets consistent with the Standard
• Market and stakeholder expectations: Certification includes a public, detailed PDS, which increases transparency on boundaries, Scope 1, 2 and relevant Scope 3 categories for the certified claim. This places scrutiny on methodologies for combustion and value-chain emissions
• Interaction with regulation: Climate Active is separate from the Safeguard Mechanism or financial disclosure rules. It can complement regulatory reporting by providing a recognisable, government-backed label for voluntary carbon neutral claims

When is it coming into effect?

• Program status: Climate Active is already in effect and certifying claims today. Certification types and guidance are maintained on the official program site, and updated Technical Guidance was published in 2024

Other live points to track

• Program reforms: The government consulted on program updates through late 2023. Climate Active has since issued refreshed guidance and validation procedures, with further refinements under consideration. Monitor the Climate Active and DCCEEW pages for changes to offset eligibility, validation cadence and claims guidance
• Offset integrity settings: Eligible offsets are defined in the Standard. Policy advice has recommended tighter rules over time, for example offset vintage guidance, which the government has been considering. Check the latest Standard and Technical Guidance Manual when procuring units
• Market sentiment: Media and industry groups have called for strengthening Climate Active to prioritise direct emissions cuts alongside offsets. This does not change current certification mechanics, but it is relevant to reputational risk for claims

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The Greenhouse Gas (GHG) Protocol is the global standard for measuring and managing greenhouse gas emissions. It was developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) in 2001 and has since become the foundation for corporate, policy, and regulatory carbon accounting frameworks worldwide.

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The GHG Protocol provides comprehensive guidance on how organisations should quantify and report their emissions, ensuring consistency, transparency, and comparability across industries. It is widely adopted by governments, businesses, and financial institutions and serves as the basis for reporting under various regulatory regimes, including the EU’s Corporate Sustainability Reporting Directive (CSRD), the US SEC climate disclosure rules, and California’s SB 253.

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The GHG Protocol requires organisations to categorise their emissions into three scopes.

• Scope 1 covers direct emissions from owned or controlled sources, such as fuel combustion in company vehicles and on-site energy generation
• Scope 2 includes indirect emissions from purchased electricity, heat, or steam
• Scope 3 accounts for indirect emissions from an organisation’s value chain, including suppliers, transport, product use, and waste disposal

The protocol provides standardised methodologies for emissions calculation, including location-based and market-based approaches for Scope 2 emissions. Companies must report emissions annually and ensure transparent, verifiable data collection. It encourages target-setting and emission reduction strategies, often aligned with the Science-Based Targets initiative (SBTi) and net-zero commitments.

The protocol also includes sector-specific guidance to address unique emissions sources in industries such as oil and gas, transport, and manufacturing.

Usage

The GHG Protocol itself is voluntary, but it serves as the basis for many mandatory reporting frameworks.

• Various countries and regulatory bodies have integrated GHG Protocol standards into legally binding regulations
• These include the EU’s Corporate Sustainability Reporting Directive (CSRD), California SB 253, the proposed US SEC climate disclosure rules, the UK’s Streamlined Energy and Carbon Reporting (SECR), and the CDP climate disclosures and Science-Based Targets initiative (SBTi)

Relevance for oil and gas companies

• The GHG Protocol is highly relevant for oil and gas companies, which are among the world’s largest emitters of greenhouse gases
• Scope 3 emissions, which account for the majority of total emissions in the sector, must be fully accounted for and disclosed
• The protocol provides detailed sector-specific guidance to help companies measure emissions from activities such as flaring, venting, fugitive emissions, refining, and transportation of hydrocarbons, as well as downstream emissions from fuel combustion
• Many oil and gas companies must comply with multiple reporting frameworks that use the GHG Protocol, making adherence essential for regulatory compliance and investor confidence

When is it coming into effect?

• The GHG Protocol is already in effect and widely used by businesses, investors, and regulators worldwide
• Companies reporting under the EU’s CSRD and California SB 253 will need to align with the GHG Protocol from 2026 onwards
• The US SEC climate disclosure rules, if finalised, will also require companies to follow GHG Protocol methodologies
• Many organisations have already adopted the GHG Protocol voluntarily as part of their climate risk management and ESG reporting strategies

The GHG Protocol is the most widely used and trusted carbon accounting framework in the world. While voluntary, it serves as the foundation for regulatory compliance in multiple jurisdictions. Oil and gas companies, in particular, must integrate the GHG Protocol into their emissions tracking and reporting processes to meet regulatory requirements, secure investor confidence, and align with global climate targets.

The Oil & Gas Methane Partnership (OGMP) 2.0 is a voluntary reporting framework launched by the United Nations Environment Programme (UNEP) and the Climate and Clean Air Coalition in 2020. It is the leading global standard for methane emissions reporting in the oil and gas sector, designed to improve the accuracy and transparency of methane emissions data across the supply chain.

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OGMP 2.0 builds on the original OGMP framework (established in 2014) but introduces more stringent and standardised reporting requirements. The framework enables oil and gas companies to track, report, and ultimately reduce methane emissions using empirical measurements rather than estimates.

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It is widely regarded as the most credible standard for methane reporting and is endorsed by over 100 companies, representing more than 35% of global oil and gas production.

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Companies must report their methane emissions across five levels of accuracy, moving toward direct measurement-based reporting rather than estimations.

• The framework requires companies to disclose emissions data for all sources, including upstream, midstream, and downstream operations

Members must submit annual reports detailing:

• Facility-level data for methane emissions
• Improvement in accuracy over time, with a goal of reaching Level 5 (direct measurement)
• Mitigation strategies and progress toward methane reduction
• Companies must commit to improving their reporting methodology and integrating measurement-based data by 2025

Relevance for oil and gas companies

• OGMP 2.0 is already in effect for companies that choose to participate
• Members must reach Level 5 (direct measurement) by 2025
• The EU is considering making OGMP 2.0 mandatory for methane reporting, which could affect companies operating in or exporting to Europe

OGMP 2.0 is the gold standard for methane emissions reporting, and oil and gas companies that adopt it will be better prepared for future regulations and market expectations. While not yet mandatory, it is becoming an industry norm, and failure to comply could result in increased scrutiny from regulators, investors, and environmental groups.

ISO 50001 is an international standard designed to help organizations establish, implement, maintain, and improve an energy management system (EnMS). It provides a systematic framework for managing energy use and performance to enhance energy efficiency and reduce environmental impact.

ISO 50001 is a voluntary standard. Organizations can choose to adopt and certify their energy management system against this standard to demonstrate their commitment to energy efficiency and environmental responsibility. While it is not legally required, many companies adopt ISO 50001 to improve energy performance, reduce costs, and gain a competitive advantage.

Purpose

The primary purpose of ISO 50001 is to enable organizations to continually improve their energy performance, which includes optimizing energy efficiency, reducing energy consumption, and lowering greenhouse gas emissions. The standard helps organizations integrate energy management into their overall efforts to improve sustainability and reduce operational costs.

Key components

• Energy Policy: A formal commitment by the organization to improve energy performance.
• Energy Planning: Identifying and reviewing energy use, establishing a baseline, setting objectives, and determining energy performance indicators (EnPIs).
• Implementation and Operation: Developing and implementing plans and processes to meet energy objectives.
• Monitoring and Measurement: Tracking, measuring, and analyzing energy performance data to ensure goals are met.
• Continuous Improvement: Regularly reviewing and refining the EnMS to ensure ongoing energy performance improvements.

What are the requirements?

Organizations must:

• Develop and document an energy management policy.
• Conduct energy reviews and establish a baseline.
• Set energy objectives and targets aligned with the policy.
• Implement action plans to achieve these targets.
• Monitor and measure key characteristics of operations that determine energy performance.
• Conduct internal audits and management reviews to ensure the effectiveness of the EnMS.
• Ensure continuous improvement through regular updates and refinements to the system.

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The ISO 14064 standards are a set of international standards developed by the International Organization for Standardization (ISO) that provide a framework for measuring, quantifying, and managing greenhouse gas (GHG) emissions. The standards are designed to assist organizations in creating credible and consistent GHG inventories, as well as to promote transparency and integrity in reporting and verification processes. The ISO 14064 series consists of three parts:‍

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ISO 14064-1: Specification with Guidance at the Organization Level for Quantification and Reporting of Greenhouse Gas Emissions and Removals

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Purpose‍

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This part of the standard provides guidance on the principles and requirements for designing, developing, managing, and reporting GHG inventories at the organizational level.

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Key Components

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1. GHG Inventory Establishment:

• Identification of GHG sources, sinks, and reservoirs
• Quantification of GHG emissions and removals, ensuring the use of consistent and transparent methods
• Selection of appropriate GHG quantification methodologies, including direct measurement and calculation

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2. Organizational Boundaries:

• Definition of the organizational boundaries (operational control, equity share, etc.) to determine which emissions are included in the inventory

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3. GHG Emissions Reporting:

• Development of a GHG report that includes details on GHG emissions, removals, and any relevant activities that influence these figures
• The report should include information on base years, scope of emissions, data collection methodologies, and uncertainties

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4. Management Systems:

• Integration of GHG management into existing management systems to ensure continuous improvement and accuracy in GHG accounting

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5. Internal Verification:

• Internal procedures to ensure the reliability and accuracy of the GHG inventory before external validation or verification

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ISO 14064-2: Specification with Guidance at the Project Level for Quantification, Monitoring, and Reporting of Greenhouse Gas Emission Reductions or Removal Enhancements

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Purpose

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This part of the standard provides a framework for the quantification, monitoring, and reporting of GHG emission reductions or removals at the project level. It is particularly relevant for projects aimed at reducing GHG emissions or enhancing GHG removals.

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Key Components

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1. Project Design and Implementation:

• Guidance on how to structure GHG reduction or removal projects, including defining the project’s objectives, scope, and boundaries
• Identification of baseline scenarios against which the project’s GHG impacts are measured

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2. Quantification of GHG Emission Reductions:

• Methods for quantifying actual GHG reductions or removals achieved by the project
• Consideration of leakage (indirect emissions) and how it impacts the project’s GHG benefits

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3. Monitoring Plan:

• Development of a monitoring plan that includes the parameters to be monitored, frequency, and data quality requirements

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4. Reporting and Documentation:

• Requirements for transparent and accurate reporting of the project’s GHG outcomes, including the methods and assumptions used

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5. Validation and Verification:

• Procedures for third-party validation and verification to confirm that the project has achieved the claimed GHG reductions or removals

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ISO 14064-3: Specification with Guidance for the Validation and Verification of Greenhouse Gas Assertions

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Purpose

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This part of the standard provides the principles and requirements for validating and verifying GHG assertions, ensuring that an organization’s GHG reports and claims are accurate, credible, and reliable.

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Key Components

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1. Validation and Verification Process:

• Guidance on conducting the validation and verification process, which includes planning, data sampling, and evaluation of GHG assertions

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2. Roles and Responsibilities:

• Definition of the roles of the verifier, organization, and other relevant stakeholders in the validation and verification process

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3. Verification Criteria:

• Establishment of criteria for evaluating the accuracy and reliability of the GHG assertions, including the data quality, methodologies, and GHG inventory boundaries

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4. Materiality:

• Application of the materiality principle to determine whether the errors or omissions in GHG data are significant enough to influence decisions based on the GHG report

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5. Reporting Verification Results:

• Requirements for the verification report, which should include the scope, objectives, and conclusions of the verification process

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6. Third-Party Validation:

• Importance of using accredited third-party bodies to validate and verify GHG assertions to enhance the credibility of the reported data

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Applications of ISO 14064 Standards

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These standards are applicable across a wide range of sectors and can be used by organizations of all sizes, from small businesses to large multinational corporations. They are particularly relevant in sectors with significant GHG emissions, such as energy, manufacturing, transportation, and agriculture. Organizations may adopt these standards to:

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• Demonstrate their commitment to reducing their carbon footprint
• Prepare for regulatory compliance and participation in carbon markets
• Enhance their reputation and gain competitive advantages through responsible environmental practices

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Global Relevance

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The ISO 14064 standards are recognized globally and are applicable in any country. They are often used as the basis for regulatory frameworks and voluntary GHG reduction programs worldwide.

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The North Sea Transition Authority (NSTA) Framework Document outlines the governance, responsibilities, and operational guidelines for the NSTA, established under the Department for Energy Security and Net Zero (DESNZ). The NSTA, previously known as the Oil and Gas Authority (OGA), is a non-departmental public body (NDPB) that plays a critical role in the UK’s oil and gas sector, particularly in facilitating the transition towards net zero emissions by 2050.

The NSTA is responsible for:

1. Licensing and Supervision: Issuing licenses for exploration, production, and storage of hydrocarbons and CO2.
2. Regulatory Compliance: Ensuring compliance with relevant legislation and regulations, including the Energy Act 2016.
3. Emissions Reduction: Supporting the government’s net zero goals through emissions monitoring and reduction initiatives.
4. Collaboration and Stewardship: Encouraging collaboration across the industry to maximize economic recovery and support net zero transition.
5. Supply Chain and Decommissioning: Leading efforts to reduce costs and enhance efficiency in decommissioning activities while supporting the UK supply chain​​.

Summary

The NSTA Framework Document establishes a comprehensive governance structure to guide the NSTA in its role as a steward and regulator of the UK’s offshore oil and gas industry. It emphasizes collaboration with DESNZ to achieve net zero emissions by 2050, setting out the NSTA’s responsibilities in licensing, regulatory compliance, emissions reduction, and support for the supply chain and decommissioning. While not legally binding, it represents a mutual agreement between the NSTA and DESNZ to work within its terms to promote sustainable and efficient practices in the sector​​.

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The Task Force on Climate-related Financial Disclosures (TCFD) is an organization established by the Financial Stability Oversight Council (FSOC) with the goal of providing recommendations for voluntary climate-related financial disclosures. The TCFD's recommendations are intended to help companies identify and disclose information that would be material to the understanding of their exposure to risks and opportunities related to climate change. The main goal of the TCFD is to increase transparency and accountability of companies on their climate-related risks and opportunities and provide useful information for investors, lenders, insurers and other stakeholders to assess the long-term value of companies.

• Companies must report on their governance, strategy, risk management, targets, and metrics with respect to climate-related risks and opportunities.
• Companies must disclose their  Scope 1,  Scope 2, and, if appropriate,  Scope 3 emissions

The SME Climate Commitment is a global initiative that encourages small and medium-sized companies to halve their greenhouse gas emissions before 2030 and reach net zero emissions before 2050. The commitment also includes yearly progress disclosures to ensure accountability and transparency.

• Companies commit to halving their scope 1, scope 2 and business travel emissions by 2030, and to reaching net zero by 2050.
• If Scope 3 emissions are material to your total emissions, and the data allows you to measure them, you should also aim to cut scope 3 emissions in half this decade.
• Companies must disclose their progress on a yearly basis.

The Science-Based Targets initiative (SBTi) is a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF) that helps companies set science-based targets for reducing their greenhouse gas emissions. The SBTi provides companies with a clear and transparent method for setting targets that are in line with the latest climate science, and helps them to align their goals with the Paris Agreement. The main goal of SBTi is to help companies to contribute to the reduction of emissions in the order of magnitude necessary to meet the Paris Agreement and to limit global warming to well-below 2 degrees Celsius above pre-industrial levels.

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This is a voluntary framework.

• Companies must set reduction targets for their scope 1 and 2 emissions for the next 5-15 years that are consistent with a temperature rise below 1.5°C compared to pre-industrial levels.
• Companies must also measure all of their scope 3 emissions
• If the company’s Scope 3 emissions make up more than 40% of their total emissions, they must also set a reduction target for Scope 3 emissions.

The Carbon Disclosure Project (CDP) is a non-profit organization that aims to encourage companies and cities to disclose their environmental impact information, such as greenhouse gas emissions, and to manage and reduce their environmental impact. CDP works with investors, companies, cities, states and regions to disclose their environmental impact data through CDP's platform. The main goal of CDP is to encourage companies to take action on climate change, water security and deforestation by providing them with the necessary data and tools to manage their environmental impact and make informed decisions.

To comply with the CDP, companies must disclose the following emission metrics:

• Scope 1, 2, 3 emissions
• Emission intensities
• Whether they had any emissions targets and emission reduction initiatives.

The Global Reporting Initiative (GRI) is an international organization that provides a framework for organizations to report on their economic, environmental and social performance, and promote sustainability reporting. GRI's framework is widely used, flexible and includes guidelines on a variety of sustainability topics, such as governance, labor practices, human rights, and environmental impact. The main goal of GRI is to increase transparency and accountability of organizations and support stakeholders in assessing the long-term sustainability of companies.

The GRI is one of the most common sustainability reporting standard, used by over 10,000 organizations around the world.

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• You must include a statement on your sustainable development strategy.
• You must determine which sustainable development topics are material to your business.
• If you decide that GHG emissions are a material topic, you must report on the following:
• Scope 1, 2, 3 emissions
• GHG emissions intensity ratio
• Reduction of GHG emissions