Our use of natural resources

Our use of natural resources and managing the environmental impact of our activities.

Public organisations need to use their resources wisely – including the natural resources they consume – and minimise their impact on the environment. We have been assessing our activities for the past few years, looking for opportunities to reduce or mitigate that impact.

We have:

• implemented a policy that does not allow business class travel in our international air travel;⁴
• updated our flexible working practices and adapted our audit practise (partly through technology) to reduce time working at client sites, which helped reduce travel and emissions;
• determined the number of employees working from home and their modes of travel between work and home;
• enhanced our financial processes to produce higher quality data, including an improved mileage claim form;
• implemented a pilot programme to record emissions from our outsourced audits for next year;
• reported on our greenhouse gas emissions for 2022/23, as a voluntary contribution to the Government’s Carbon Neutral Government Programme; and
• committed to designing and implementing reduction targets and plans from 2023/24.

As part of our commitment to reporting on our greenhouse gas emissions, we started measuring emission sources (where we had enough data) for 2018/19 (our base year). This year, 2022/23, is the second year we have measured our emissions. Although we could measure more emission sources this year, such as employee commuting, we could not reflect our entire carbon footprint. We currently exclude some sources of emissions (such as our outsourced audits to other audit service providers). Work is under way to collect emissions data from external audit service providers from 1 July 2024.

We will continue to review our systems to provide a more complete carbon footprint over time.

We chose 2018/19 as our base year to measure emission sources because our reduction efforts were best represented in a year before the onset of Covid-19. Our main sources of emissions are from auditors travelling to client sites.

Our emissions inventory complies with the ISO 14064-1:2018 standard and reflects a financial control consolidation approach to determine the scope of our emissions reporting. This means we have included only those entities and assets that we have financial control of within categories 1 and 2. Other emissions outside of the organisational boundary are reported in categories 3-6.

Changes to emission factors and additional sources in 2022/23

This year, we were able to calculate emissions from three new sources: employee commuting, number of employees working from home, and recycling.

• Employee commuting and number of days worked from home: We designed and sent out an employee survey for one week to extrapolate how many employees worked from home and the modes of travel used between home and work. There was a high level of estimation and extrapolation involved; however, this was a good indicator of the employee commuting habits and the number of days worked from home. There is no comparative data in our base year for these two new sources.
• Recycling: This is the first year that we disclosed emissions produced from recycling in our offices with recycling facilities. The emissions from recycling were not material.

In 2022/23, the Ministry for the Environment updated a number of emission factors as new underlying data became available. The new emission factors have been applied to the 2022/23 year and did not affect our baseline year. The overall impact of changing these emissions factors on the 2022/23 results was less than 5% of the total emissions.

Inventory summary

Based on the sources we are currently able to measure, our emissions for 2022/23 are in the table below. Comparative figures for our baseline are also shown.

Note: tCO₂e stands for tonnes (t) of carbon dioxide (CO₂) equivalent (e).

We plan to establish emission reduction targets and to reduce our emissions in 2023/24.

The main increase in emissions in 2022/23, compared to our base year, was caused by an increase in Category 3 indirect emissions of 432 tCO₂e.

The increase Category 3 emissions arose from:

• increased recruitment and relocation of new auditors from overseas to support audit delivery (316 tCO₂e);
• recognising emissions for employees commuting between work and home, which were not measured in our base year (290 tCO₂e);
• recognising emissions for employees working from home, which were not measured in our base year
  (11 tCO₂e); and
• increases in freight emissions (10 tCO₂e).

The above increases were offset by reductions in emissions from:

• international air travel, excluding travel from overseas relocations (37 tCO₂e);
• domestic air travel (96 tCO₂e); and
• rental cars, taxis, accommodation, and fuel from Office fleet vehicles (62 tCO₂e).

Excluding emissions from new sources (employee commuting and working from home), our gross and net emissions only increased by 109 tCO₂e rather than 410 tCO₂e noted above in our inventory summary.

Inherent uncertainty

There is some uncertainty associated with preparing a greenhouse gas emissions inventory. To minimise this uncertainty, source data has been obtained directly from suppliers, where possible. In some instances, we have had to estimate or extrapolate information, such as emissions from employees’ mileage claims and employees commuting to work. This estimation process increases the level of uncertainty.

There is also a degree of uncertainty with emissions factors. For example, as vehicles become more efficient over time, the emissions for each kilometre travelled reduces and this is reflected in the annually published emission factors by the Ministry for the Environment. The electricity emission factor tends to move more than other factors because in some years there is more thermal generation and in other years more renewable generation.

We calculated our emissions based on supplier sources and the most up-to-date emission factors available from the Ministry for the Environment at the time our inventory was produced and independently verified. Electricity was the only emission factor that could be applied to our base year because the Ministry for the Environment changed its methodology in 2022.

We have assessed the effect of the change on our base year figure for electricity as not material to our performance and have not restated our baseline figure using the updated emission factor.

4: As part of measuring our emissions we must measure indirect greenhouse gas (GHG) emissions from transportation, including air travel. There are different emissions factors for each class of travel, and the Office previously allowed employees to book business class in limited circumstances for overseas travel. Prohibiting the use of business class is expected to reduce the amount of emissions incurred.