Whats Included in this document ?
Complete Chapters Solutions Included
✅
Review & Practice Solutions
Instructor Manuals
GAAP Practice Questions
Data Analytics and Accounting
, Appendix D
Environmental, Social, and Governance Reporting
QUESTIONS
1. What are the six greenhouse gases?
Ans. Carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC),
perfluorocarbons (PFC), and sulfur hexafluoride (SF6).
2. What is carbon dioxide equivalent (CO2e), and how is it computed?
Ans. Carbon dioxide equivalent is converting all of the greenhouse gases into the equivalent
amount of carbon dioxide.
3. What is the difference between absolute emissions and emissions intensity?
Ans. Absolute emissions are the total or gross amount of the carbon dioxide or carbon dioxide
equivalent emitted. Emissions intensity is the absolute emissions divided by a measure of
activity. Common measures of activity are units of output or revenue.
4. Describe the emissions included in Scope 1 emissions.
Ans. Scope 1 emissions are the direct emissions of greenhouse gases from the facilities and
operations that they own or control.
5. Describe the emissions included in Scope 2 emissions.
Ans. Scope 2 emissions are indirect emissions from the generation of electricity that was
purchased by the company.
6. Describe the emissions included in Scope 3 emissions.
Ans. Scope 3 emissions are all other indirect emissions. This includes all of the emissions
across the company’s value chain.
7. What is the difference between limited and reasonable assurance?
Ans. Limited assurance is provided when a third party has reviewed some but not all of the
company’s processes and reporting. Reasonable assurance is provided when the complete
processes and reporting have been reviewed. Reasonable assurance is stronger than limited
assurance.
8. What is a company’s value chain?
Ans. The value chain includes all of the upstream and downstream activities of the organization.
Upstream activities include purchasing goods and services and employee business travel.
Downstream activities include the delivery of goods and services to customers and the use of
the product sold.
Copyright © 2024 Kieso, IFRS, 5/e, Solutions Manual
,9. In addition to carbon emissions, what types of items are reported by companies in the
environmental section of their ESG reports?
Ans. Water use and biodiversity.
10. What are some of the items commonly reported related to employees in the social category
of ESG reports?
Ans. Employee engagement, compensation – both living wages and equal pay, workforce
diversity, and workplace safety.
11. What are common impacts related to communities that are often reported in the social
category of ESG reports?
Ans. Philanthropy and volunteering along with taxation.
12. What attributes of the board of directors are commonly reported in the governance category
of ESG reports?
Ans. Size; mix of executive and independent directors; age, gender, nationality and years of
service for directors; and board committees.
13. How has ESG reporting impacted the work of the board of directors and other aspects of
corporate governance?
Ans.
• Some boards have added an ESG committee.
• Compensation committees have added one or more ESG measures to the variable
compensation component of executive compensation.
• Audit committees have focused on the internal controls and reporting process for ESG
measures.
BRIEF EXERCISES
BED.1 The various scopes using the Greenhouse Gas Protocol are either direct or indirect.
Which one(s) are direct and which one(s) are indirect?
Solution
Scope 1 – Direct
Scope 2 and Scope 3 – Indirect
BED.2 Which one of the following is an example of Scope 1 greenhouse gas emissions?
• Emissions related to the mining of raw material by a company.
Copyright © 2024 Kieso, IFRS, 5/e, Solutions Manual
, • Emissions when a raw material that was purchased by the company was mined.
Solution
Emissions related to the mining of raw material by a company. Scope 1 emissions are from
operations owned or controlled by the company.
BED.3 Which one of the following is an example of Scope 2 greenhouse gas emissions?
• Emissions related to the electricity used when mining of a raw material by a company.
The electricity was purchased from a local utility.
• Emissions when a raw material that was purchased by the company was mined. The
electricity by the supplier was purchased from a local utility.
Solution
Emissions related to the electricity used when mining of a raw material by a company. The
electricity was purchased from a local utility. Scope 2 emissions are from electricity purchased
by the company from others.
BED.4 Which one of the following is an example of Scope 3 greenhouse gas emissions?
• Emissions related to the mining of a raw material by a company.
• Emissions when a raw material that was purchased by the company was mined.
Solution
Emissions when a raw material that was purchased by the company was mined. Scope 3
emissions are from your upstream and downstream activities.
BED.5 Honoly SE emitted 37,325,000 metric tons of CO2e this year. The company reported
revenues of ¥3,110,416,667 for the same period. What is Honoly’s emissions intensity for the
year?
Solution
37,325,,110,416,667 = 0.012 metric ton per ¥ or revenue
BED.6 Match the following dimensions of social reporting with measures that can be used to
report these dimensions?
1. Employees
2. Suppliers
3. Customers
4. Communities
5. Society
Copyright © 2024 Kieso, IFRS, 5/e, Solutions Manual
Complete Chapters Solutions Included
✅
Review & Practice Solutions
Instructor Manuals
GAAP Practice Questions
Data Analytics and Accounting
, Appendix D
Environmental, Social, and Governance Reporting
QUESTIONS
1. What are the six greenhouse gases?
Ans. Carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC),
perfluorocarbons (PFC), and sulfur hexafluoride (SF6).
2. What is carbon dioxide equivalent (CO2e), and how is it computed?
Ans. Carbon dioxide equivalent is converting all of the greenhouse gases into the equivalent
amount of carbon dioxide.
3. What is the difference between absolute emissions and emissions intensity?
Ans. Absolute emissions are the total or gross amount of the carbon dioxide or carbon dioxide
equivalent emitted. Emissions intensity is the absolute emissions divided by a measure of
activity. Common measures of activity are units of output or revenue.
4. Describe the emissions included in Scope 1 emissions.
Ans. Scope 1 emissions are the direct emissions of greenhouse gases from the facilities and
operations that they own or control.
5. Describe the emissions included in Scope 2 emissions.
Ans. Scope 2 emissions are indirect emissions from the generation of electricity that was
purchased by the company.
6. Describe the emissions included in Scope 3 emissions.
Ans. Scope 3 emissions are all other indirect emissions. This includes all of the emissions
across the company’s value chain.
7. What is the difference between limited and reasonable assurance?
Ans. Limited assurance is provided when a third party has reviewed some but not all of the
company’s processes and reporting. Reasonable assurance is provided when the complete
processes and reporting have been reviewed. Reasonable assurance is stronger than limited
assurance.
8. What is a company’s value chain?
Ans. The value chain includes all of the upstream and downstream activities of the organization.
Upstream activities include purchasing goods and services and employee business travel.
Downstream activities include the delivery of goods and services to customers and the use of
the product sold.
Copyright © 2024 Kieso, IFRS, 5/e, Solutions Manual
,9. In addition to carbon emissions, what types of items are reported by companies in the
environmental section of their ESG reports?
Ans. Water use and biodiversity.
10. What are some of the items commonly reported related to employees in the social category
of ESG reports?
Ans. Employee engagement, compensation – both living wages and equal pay, workforce
diversity, and workplace safety.
11. What are common impacts related to communities that are often reported in the social
category of ESG reports?
Ans. Philanthropy and volunteering along with taxation.
12. What attributes of the board of directors are commonly reported in the governance category
of ESG reports?
Ans. Size; mix of executive and independent directors; age, gender, nationality and years of
service for directors; and board committees.
13. How has ESG reporting impacted the work of the board of directors and other aspects of
corporate governance?
Ans.
• Some boards have added an ESG committee.
• Compensation committees have added one or more ESG measures to the variable
compensation component of executive compensation.
• Audit committees have focused on the internal controls and reporting process for ESG
measures.
BRIEF EXERCISES
BED.1 The various scopes using the Greenhouse Gas Protocol are either direct or indirect.
Which one(s) are direct and which one(s) are indirect?
Solution
Scope 1 – Direct
Scope 2 and Scope 3 – Indirect
BED.2 Which one of the following is an example of Scope 1 greenhouse gas emissions?
• Emissions related to the mining of raw material by a company.
Copyright © 2024 Kieso, IFRS, 5/e, Solutions Manual
, • Emissions when a raw material that was purchased by the company was mined.
Solution
Emissions related to the mining of raw material by a company. Scope 1 emissions are from
operations owned or controlled by the company.
BED.3 Which one of the following is an example of Scope 2 greenhouse gas emissions?
• Emissions related to the electricity used when mining of a raw material by a company.
The electricity was purchased from a local utility.
• Emissions when a raw material that was purchased by the company was mined. The
electricity by the supplier was purchased from a local utility.
Solution
Emissions related to the electricity used when mining of a raw material by a company. The
electricity was purchased from a local utility. Scope 2 emissions are from electricity purchased
by the company from others.
BED.4 Which one of the following is an example of Scope 3 greenhouse gas emissions?
• Emissions related to the mining of a raw material by a company.
• Emissions when a raw material that was purchased by the company was mined.
Solution
Emissions when a raw material that was purchased by the company was mined. Scope 3
emissions are from your upstream and downstream activities.
BED.5 Honoly SE emitted 37,325,000 metric tons of CO2e this year. The company reported
revenues of ¥3,110,416,667 for the same period. What is Honoly’s emissions intensity for the
year?
Solution
37,325,,110,416,667 = 0.012 metric ton per ¥ or revenue
BED.6 Match the following dimensions of social reporting with measures that can be used to
report these dimensions?
1. Employees
2. Suppliers
3. Customers
4. Communities
5. Society
Copyright © 2024 Kieso, IFRS, 5/e, Solutions Manual
