Farid Steel: sustainability disclosures and a carbon neutral claim

Tick each point that your answer made clearly and only once. Points here are this site's own. A real examiner may accept other valid points.

• Governance: the oversight of the body for climate risks and opportunities, and the role of management.
• Strategy: the risks and opportunities, the effect on the business model and the value chain, and the financial effects.
• Strategy also includes resilience, assessed using scenario analysis, and a transition plan if the company has one.
• Risk management: how the risks are identified, assessed, prioritised and monitored.
• Integration with overall risk management processes.
• Metrics: gross Scope 1, 2 and 3 emissions in tonnes, measured using the GHG Protocol.
• Targets: any target set, how progress is measured and whether credits are used.
• Industry-based metrics and the amounts of assets and activities exposed to risk, and capital deployed.

Marks counted: 0 of 8

Tick each point that your answer made clearly and only once. Points here are this site's own. A real examiner may accept other valid points.

• Total emissions = 200,000 tonnes.
• Intensity = 200,000 / 400 = 500 tonnes per $ million of revenue.
• Scope 1 and 2 emissions are 50,000 tonnes, which is 25% of the total, so the claim does not cover 75% of the footprint.

Marks counted: 0 of 3

Tick each point that your answer made clearly and only once. Points here are this site's own. A real examiner may accept other valid points.

• Impairment tests should reflect climate-related risks in cash flow forecasts and discount rates, and be consistent with the disclosures.
• Useful lives and residual values of plant may need to be reviewed if the plant will be retired earlier.
• Provisions and contingent liabilities, for example for carbon taxes or for restoration obligations.
• Consistency of assumptions between the sustainability report and the financial statements, and the same reporting entity and period.

Marks counted: 0 of 4

Tick each point that your answer made clearly and only once. Points here are this site's own. A real examiner may accept other valid points.

• The claim may mislead investors and others because it excludes the major part of emissions and relies on offsets, which is greenwashing.
• The principle of integrity requires that the statements be honest and not misleading.
• Reputation and legal risks, including action by regulators or customers.
• Suggest a more precise statement of the scope, the offsets used and the progress to reduce emissions, with a target.
• The accountant should raise the matter with the board or the audit committee and document the advice.

Marks counted: 0 of 5