Expert Group Meeting ‘Using Energy Management Standards to stimulate persistent application of Energy Efficiency in Industry’ Alexandre V. MELLO Environmental Department – Climate Change Brazilian Confederation of Industries - CNI 22 March 2007 UNIDO – Vienna/Austria

Investigating the attitude of Brazilian organisations with CDM projects towards ISO Alexandre V. MELLO MSc Climate Change and Sustainable Development Institute of Energy and Sustainable Development - IESD De Montfort University / UK Environmental Management on Climate Change ISO research

Overview Why a ISO study? Research –Objectives and Hypotheses –Literature Review –Method –Results –General Outcomes –Conclusions

Why a ISO study? (1) To investigate its acceptability; To identify its potential benefits and barriers;

Why a ISO study? (2) Due to pressure from governments and organisations to standardise GHG requirements; Due to appearance of others GHG standards; It was published recently: –Lack of academic researches (Probably this is the first research); –Lack of case studies (only 3 examples – draft standard).

Why a ISO study? (3) Due to its specificity as ISO – Part 2 focuses on GHG projects (mainly CDM projects).

Objectives of the research To identify whether the Brazilian organisations with CDM projects will adopt ISO and the potential motives and/or barriers to implement it; To analyse how Brazilian organisations with CDM projects manage their environmental aspects / CDM projects and what their experiences are with ISO standards / GHG guidelines.

Hypotheses of the research (1) H1: Brazilian organisations with CDM projects will be interested in implementing ISO 14064; H2: Brazilian organisations with CDM projects that have experience on environmental programs such as EMS and ISO certification will be the most interested in adopting ISO 14064;

Hypotheses of the research (2) H3: Large Brazilian organisations with CDM projects (International corporations, high number of employees, high turnover) will be interested in ISO 14064; H4: Since ISO is a voluntary and a new standard to apply in the carbon market, the Brazilian organisations with CDM projects will not be interested due to the lack of information and potential benefits of the standard.

Literature Review ISO certifications worldwide and in Brazil (high demand); Kyoto Protocol and the CDM worldwide and in Brazil (high demand); Standards for GHG emissions accounting and reporting (5) ISO 14064:2006 (mainly Part 2 – Projects).

Voluntary standards for GHG projects GHG Protocol: Corporate accounting / Project quantification WBCSD / WRISep 01 / Nov 05 CCB standardsCCB AllianceOct 05 ISO (1,2,3)ISOMar 06 Voluntary Carbon Standard (VCS) The Climate Group / IETA Mar 06 (ver 1 for consultation) Final: not published Gold Standard - Methodology Group of 40 NGOsMay 06 Final: not published

Comparison of ISO popularity and other GHG standards TermResults “ISO 14001”8,830,000 “ISO 14064”76,900 “The Gold Standard” carbon credits47,800 “GHG Protocol Initiative”975 “CCB Standard”480 “Voluntary Carbon Standard”60 Source: Google, 12/08/2006

Research’s framework

Research Method (1) Information sources: literature and reports; climate change and environmental experts (WG09 – CB38/ABNT); and ISO questionnaire reports; Questionnaire applied to 47 Brazilian organisations that have 60 CDM projects - registered (57) and requested registration (3) in the UNFCCC – 11 th July 2006 (applied by – 2 organisations by telephone);

Research Method (2) Results are from 6 organisations’ sectors identified from the LR: –SASector (24 projects), –AWMSector (14), –LSector (10), –ECgSector (9), –RSector (2), –N 2 OSector (1), Organisations are treated with confidentiality;

Results of the research (1) Response rate: Number of organisations: 47 Number of CDM projects: 60 Returns related to CDM projects 19 (31.7%) Questionnaire responses 15 Returns without questionnaire 4

Results of the research (2) Section 1: the organisation –64.3% are large organisations; –33.3% of CDM projects are from SASector; –ECgSector and LSector (13.3% each one); –60% work independently.

Results of the research (3) Section 2: the EM and certification –66.7% have ISO 9000 and 53.3% have ISO certificates; –90% work with international certifier bodies; –80% have EM programmes (e.g. recycling and EMS); –50% have energy efficiency program.

Results of the research (4) Section 3: the CDM Project –80% hired external consultancy; –Most consultants work internationally with offices in Brazil; –60% use KP CDM guideline to account and verify GHG emissions; –40% believe that ISO and CDM requirements could be integrated (e.g. GHG emissions reduction becomes a requirement of an EMS);

Results of the research (5) Section 3: the CDM Project –Reasons to have developed CDM project: Reduce GHG emissions (60%); Improve environmental performance (53.3%); Only 6.7% developed their CDM project to attend regulatory needs, government policy and promote SD.

Results of the research (6) Section 4: the ISO Standard –46.7% declared the intention to learn more about the standard; –26.7% have limited knowledge and have already heard of it; –20% never had contact with ISO 14064;

Results of the research (7) Section 4: the ISO Standard –Adoption: 46.7% do not have interest to implement it in their CDM projects ; 33.3% did not answer this question (lack of knowledge); 20% have the intention to implement it (as soon as possible; after one year; during ); 53.3% believe that ISO will be implemented in Brazilian organisations (comparing to ISO 14001);

Results of the research (8) Section 4: the ISO Standard –Adoption: 60% demonstrated that ISO will be implemented in organisations with CDM projects; 46.7% implemented it in large organisations; 33.3% implemented it in organisations that have ISO standards implemented;

Results of the research (9) Section 4: the ISO Standard –Reasons to adopt ISO 14064:2006: 46.7% 20% 6.7% 33.3%

Results of the research (10) Section 4: the ISO Standard –Reasons not to adopt ISO 14064:2006: 13.3% 6.7% 20% 66.7% not answered

General Outcomes (1) Internal benefits to implement ISO 14064: Organisational benefitsFinancial benefitsPeople benefits  Better management of a specific GHG issue  Improve credibility of the CDM project  Improve employee commitment External benefits to implement ISO 14064: Commercial benefitsEnvironmental benefitsCommunication benefits  Improve transparency of the CDM project  Improve the image of the organisation  Improve GHG reductions compliance  Improve relationship(s) with governmental authorities/agencies

General Outcomes (2) Internal barriers to implement ISO 14064: Capacity building / Resources Understanding and perception Organisation attitude  Lack of knowledge  Lack of specialist staff  Perception of high cost for implementation  ISO is too bureaucratic for the size of our organisation  CDM requirements are sufficient to the project External barriers to implement ISO 14064: Verifier bodiesEconomicSupport and Guidance  Lack of knowledge and experience  CERs’ trade only with ISO organisations  Lack of knowledge and experienced consultants

Conclusions (1) Brazilian organisations with CDM projects, at first, will not adopt ISO (problems: lack of knowledge; costs related to validation and verification processes); They support the necessity to standardise requirements to quantify, monitor and verify GHG emissions reductions; They understand that standardised procedures can improve credibility and financial aspects of CDM projects (can attract investors);

Conclusions (2) Small organisations are more interested than large organisations (minimise risks related to the CDM project); Brazilian organisations with CDM projects have pro-environmental attitude (high number of EM programs and ISO certificates – good tendency to adopt ISO 14064);

Conclusions (3) Standards are environmental and business tools to tackling climate change and improving profits (LR); Dissemination is a key to ISO adoption (it was achieved in Brazilian organisations with CDM projects); It was recommended an action plan at ISO and National standards associations to disseminate ISO (plan: who, where, when and how).

MANY THANKS ! Full study: Alexandre V. MELLO QUESTIONS ?