How to implement FRD 24: The Environmental Performance Cycle

In recognition of the substantial variations that exist in public sector entity size, environmental impact and capability, FRD 24 reporting has a tiered approach. Public entities are classified into reporting tiers with tier 1 having the greatest reporting obligations and tier 4 having the least requirements.

Tier 4 entities have minimal FRD24 reporting requirements. Tier 4 entities are required to report on electricity consumption, fleet composition, and in some circumstances office accommodation. However, a simple disclosure may be made when all material consumption across the three areas is sourced through central procurement arrangements. These arrangements include a service level agreement with a portfolio department, State Purchase Contracts, HealthShare Victoria Contracts, or the Shared Service Provider. In these circumstances entities can comply with FRD 24 with a simple disclosure in their annual report that outlines these arrangements. To make a simple disclosure in your Annual Report of Operations, you should succinctly describe the central procurement arrangements that exist for the tier 4 entity. Examples of these statements include:

• The Office of the Science and Technology regulator has a Service Level Agreement in place with the Department of Technology for the provision of office accommodation and fleet services. Data on the environmental impacts is included in the Department of Technology's annual report.
• Technology Promotion Victoria utilises central government contracts for the provision of its services.

Use this guidance to understand what tier your organisation belongs to and what the requirements for your tier are:

• FRD 24, Appendix 1
• Guidance on the application of reporting tiers under FRD 24

Guidance for FRD 24 Reporting pages 2-3.

Organisational boundary defines all the operations and facilities that need to be included in your reporting. FRD 24 requires you to disclose your organisational boundary for the purposes of environmental reporting. You can assess your organisational boundary by working through the following steps and questions:

Step one: Review your entity's organisational structure

• Do I fully understand how my entity is structured, and what facilities and assets it operates?
• Have I identified all the relevant facilities and the potential emission sources?
• Have I considered assets or facilities that I lease and included base building services as appropriate?

Step two: Consider consolidated entities

• Are there any other government entities consolidated into my annual report (such as under section 53 of the FMA)?
• Has my entity agreed to report environmental data of another public entity?

Step three: Consider public private partnerships (PPPs)

• Does my entity (or a consolidated entity) manage any PPP agreements?
• Do the assets operated under these agreements fall within the definition of operational control?

FRD 24 adopts the ‘operational control approach’ of the GHG Protocol Corporate Standard where there is more than one entity involved in the operations of a facility. Under this approach, operational control is determined by the authority to introduce and implement operating or environmental policies. Under the operational control approach, the entity accounts for 100% of the emissions from each operation under operational control. Operational control may need to be assessed for public private partnerships where the nature of the partnership goes beyond that of a simple commercial lease to a private entity.

The FRD 24 Activity and Data Collection worksheet can help you assess your organisational boundary, operational activities and data sources.

For further information see:

• FRD 24, clause 4.3
• Guidance for FRD 24 Reporting pages 4-5.

Accurate and reliable environmental reporting requires a thorough understanding of your entity's operational activities and the environmental impact of those activities. The FRD 24 Activity and Data Collection worksheet can help you assess your organisational boundary, operational activities and data sources. To develop your list of assets or facilities (or group of assets or facilities) for FRD 24 reporting you should include those that:

• consume resources (including electricity, gas, fuels, water)
• generate waste
• use a greenhouse gas in its operation (such as refrigeration, air conditioning, fire suppression or lab equipment)
• emit a greenhouse gas as a result of its operation (such as wastewater treatment).

Identifying data sources is an important planning activity for FRD 24 reporting, to prepare for your reporting and identify where you need to improve your access to data over time. While there are a range of specific sources for particular indicators, common data sources include:

• An Environmental Data Management System, or platform such as Resource Advisor
• Billing information from suppliers
• Asset or fleet management registers or systems
• Data compiled for other reporting or compliance purposes, such as NGER, NPI, or financial compliance such as FBT

Data sources for individual indicators include:

• Electricity
  • Electricity retailer billing / invoices
  • Distribution Network online data portals
  • Smart meters
  • Resource Advisor (Schneider Electric) – for State Purchase Contracts only
  • Asset register or installation paperwork for solar systems
• Stationary fuels
  • Natural gas and/or LPG retailer billing / invoices
  • Bulk fuel supplier billing / invoices
  • Solid fuel supplier billing / invoices
  • Natural gas meters
  • Bulk fuel tank gauge readings or manual dipstick readings
  • Resource Advisor (Schneider Electric) – for users of the Large-site Natural Gas State Purchase Contract
• Transportation
  • Fuel card providers, including online data portals
  • Bulk fuel purchase invoices
  • Vehicle logbooks/odometer readings and average fuel consumption from ADR 80/01.
  • Fleet or asset register
  • Shared Service Provider
  • VicFleet
  • Invoice for leases
  • Corporate Travel Management or other travel service providers
• Sustainable Buildings and Infrastructure
  • The National Australian Built Environment Rating Scheme, or other rating scheme operators
• Water
  • Invoices/billing from water suppliers
  • Water meters
• Waste and recycling
  • Waste management providers
  • Waste audits
  • Estimated based on number of bins (e.g. for sites with municipal waste collection)
• Greenhouse gas emissions (for non-energy sources)
  • Equipment surveys and standard leakage rates
  • Purchase records
  • Servicing records

While you should aim to report as complete an account of your organisation’s activities as practicable, data for some activities can be difficult to collect or not available. FRD 24 enables continuous improvement in environmental data including through the disclosure of data gaps. Information on data gaps can be just as valuable to stakeholders as the data itself. Where data is difficult to collect, consider the following steps:

Step one: report the data

Where data is available you should include that data in your report, including as voluntary or optional reporting if relevant. If it is not practicable to report the data, then:

Step two: consider materiality

Some facilities and activities will be both very small and have hard to collect data. The FRD 24 materiality clause enables these to be excluded if they have emissions <1% of the organisation’s total and the total amount of excluded activities are <5% of the organisation’s total.

Use back of the envelope calculations, comparisons, or order of magnitude assessments to determine materiality.​ If you can confidently and quickly assess the activity as not material, it can be excluded.

If the activity is material, or you’re not sure, then:

Step three: report an estimate

FRD24 enables the reporting of estimates where it is impracticable to report the data. The Guidance for FRD 24 Reporting provides a number of methods for estimating activities. Estimates can also be used where you lack data for a period of the reporting year.

If you lack the information on which to base an estimate, then:

Step four: disclose planned activities to improve data collection

Where it is impracticable to report the data or an estimate you can outline in your annual report planned activities to improve data collection over time. This disclosure should provide a summary of actions that will be taken to improve data availability and quality including the development of sustainability or environmental plans, development or enhancement of an environmental data management system, facility upgrades, audits, system improvements, negotiations with suppliers etc.

For further information see:

• FRD 24, clause 4.4 and 4.5
• Guidance for FRD 24 Reporting pages 5-6.

During the planning phase you will have identified appropriate data sources for the relevant indicators for your organisation.

Some environmental indicators that require normalisation. These include E4 (units of energy used); W2 (units of metered water consumed); and WR3 (total units of waste disposed). The purpose of normalization, in this context, is to generate a comparable data set over time when changing factors could impact on how the information is interpreted. You should choose an appropriate normalisation factor that is meaningful and relevant for your organisation. Appropriate normalisation factors may include FTE (Full Time Equivalent), headcount, floor area, or passenger kilometres.

To enable an analysis and explanation of trends in data you should report at least two prior years of data, where information is available. For some indicators or activities you may have data or estimates for the current year available, but lack data or estimates for prior years. Where this applies to a whole indicator you can insert a “nc” or similar into the table (with a footnote of “nc = not collected”). Where this applies to an activity, that is data for a particular indicator is now more complete, you can disclose this in table footnotes or note it as a driver behind trends for a particular indicator.

For further information see:

• Guidance for FRD 24 Reporting pages 3-4 and 8-39.

You are encouraged to use the DEECA Environmental Data Reporting Tool, to collate and analyse your FRD 24 data. The tool is updated with the correct emissions and conversion factors, and can import some data from central contracts. This tool outputs FRD 24 compliant tables and enables you to easily provide your data to DEECA for incorporation into the WOVG emissions inventory.

If conducting your own analysis and conversion of data, or engaging a consultant, ensure that data is converted into the correct units for FRD 24 reporting, as specified in FRD 24, and that the current emissions factors are used. Current emissions factors can be found on the Federal Department of Climate Change, Energy, the Environment and Water National Greenhouse Accounts Factors webpage. For the calculation of scope 2 emissions you should use Climate Active’s Electricity Accounting Guidance.

For further information see:

Guidance for FRD 24 Reporting pages 8-39.

The structure of your reporting information will depend upon the reporting requirements for your tier, however guidance for tier 1 entities is provided in the Model Report for Victorian Government Departments.

Alongside the quantitative data in your annual report you should include contextual information to aid interpretation. Use the qualitative disclosure to discuss changes and trends, new environmental programs or activities, how progress is tracking towards any targets and any major data sources, such as an environmental data management system.

Table footnotes should be used to disclose any details relevant to data availability, methods used to calculate estimates, or activities that will improve data availability over time etc. It is important that any estimates be clearly identified and disclosed as such, to distinguish between actual and estimated data.

For further information see:

• Guidance for FRD 24 Reporting pages 5-7.
• The Model Report for Victorian Government Departments