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Materiality

1 st Sustainable Development Mechanisms Joint Coordination Workshop Module 2.4. Materiality. Bonn, Germany, 24 – 25 March 2012. CMP decision in Durban. CMP adopted the application of the concept of materiality and level of assurance in the CDM

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Materiality

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  1. 1st Sustainable Development Mechanisms Joint Coordination Workshop Module 2.4 Materiality Bonn, Germany, 24–25 March 2012 Marsha Cheddi Standard Setting Unit, SDM Programme UNFCCC secretariat

  2. CMP decision in Durban • CMP adopted the application of the concept of materiality and level of assurance in the CDM • Materiality initially applies to verifications (for DOEs) and assessment of requests for issuance (for the EB and its support structure) • CMP defined material information as a piece of information the omission, misstatement or erroneous reporting of which could change a decision by the Board • CMP defined five materiality thresholds • CMP decided that a reasonable level of assurance be used by DOEs in verifications

  3. CMP decision in Durban (cont.) CMP requested the Board to: • Implement the concept of materiality, and report on the experience of implementation at CMP8 • Increase its interaction with DOEs to facilitate a uniform interpretation and application of the concept of materiality • Address the issue of uncertainties of measurements in baseline and monitoring methodologies so that these types of uncertainties are not considered in addressing materiality • Develop guidance on how to apply thresholds and what should be done if they are surpassed

  4. Approach • Implement the concept of materiality • The VVS will be updated to include the concept of materiality, the thresholds, and level of assurance • To support the consistent application of materiality in verifications, guidelines will also be developed. • Increase its interaction with DOEs to facilitate a uniform interpretation and application of the concept of materiality • SDM Joint Coordination Workshop is the first interaction • DOEs and AIEs have been invited to provide concrete examples of application of materiality for the development of the guidelines • Other interactions to come (format and timeline to be determined)

  5. Approach • To address the issue of uncertainties of measurements in baseline and monitoring methodologies so that these types of uncertainties are not considered in addressing materiality • Secretariat to amend the PS and VVS to address the issue of uncertainties of measurements, or develop a separate standard • Materiality guidance to be clear about not considering these types of uncertainties in addressing materiality

  6. Approach • Develop guidance on how to apply materiality thresholds and what should be done if they are surpassed • EB 67 - Secretariat to present a concept note that includes a detailed outline for the proposed guideline for the Board’s consideration • EB 68 - Secretariat to present a first draft of the guideline for the Board’s consideration and launch a call for public inputs • EB 69 - Secretariat to present a final draft for the Board’s consideration and adoption

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