Reduction in energy consumption

Disclosure focus

Disclosure 103-5 requires an organisation to report the reduction in energy consumption achieved during the reporting period in joules, watt-hours or an appropriate multiple. The disclosure must explain whether and how the reduction resulted from the organisation’s conservation and efficiency initiatives and from other factors.

Conservation and efficiency initiatives can include process redesign, equipment conversion or retrofitting, fuel switching and behavioural change. Other factors can include lower production capacity, outsourcing, changes in organisational boundaries and weather conditions. Where possible, the organisation can provide a quantitative breakdown of the total reduction by individual initiative and other factor, but this breakdown should be identified as additional information rather than a separate mandatory datapoint.

The organisation must identify the types of energy consumption included in the reduction: fuel, electricity, heating, cooling and steam. Individual energy sources, such as natural gas, diesel, solar electricity or district heating, can be reported as additional detail.

The organisation must state whether the reduction was achieved within the organisation, in its upstream and downstream value chain, or both. Where the reduction occurred in the value chain, it must list the relevant upstream and downstream categories. It should additionally provide a numerical breakdown of the reduction by category.

The organisation should consider the whole life cycle of its products and services when assessing energy reductions. This is particularly relevant for products with high use-phase energy demand, such as vehicles and electronic equipment. Where applicable, it can report reductions in the energy requirements of sold products or services using a clearly defined functional unit and consistent use-phase assumptions.

The organisation must state whether the reduction is sourced from direct measurements, estimated or modelled. Where estimates or models are used, it must describe the relevant methods. If a total combines measured, estimated and modelled components, each component should be identified and reconciled.

The organisation must report either a base year or a baseline and must distinguish between them. A base year is a historical year or historical period against which performance is compared. A baseline is the projected energy consumption that would have occurred in the absence of the reduction activity.

For the selected base year or baseline, the organisation must explain why it was chosen and report the associated energy-consumption value. The current and comparison boundaries, energy types and calculation methods should be consistent.

The organisation should report the percentage reduction compared with the energy consumption in the base year or baseline. This percentage supplements and does not replace the mandatory absolute reduction in energy units.

The organisation must report the standards, methodologies, assumptions and calculation tools used. It should explain why they were selected and describe any changes from previous reporting periods, including updates to energy-consumption models made to reflect technological improvements.

A practical disclosure should therefore show:

the absolute reduction and unit;

the contribution of conservation and efficiency initiatives and other factors;

fuel, electricity, heating, cooling and steam included;

whether the reduction occurred within the organisation, in the value chain or both;

the relevant value-chain categories;

direct, estimated or modelled measurement basis;

the base year or no-action baseline, rationale and energy-consumption value;

the percentage reduction;

standards, methodologies, assumptions and calculation tools.

This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official Global Reporting Initiative source.