Download Analysis on Carbon Information Disclosure of Chinese Forestry

Analysis on Carbon Information Disclosure of Chinese Forestry
Listed Enterprises Under Low-Carbon Economics.
JIANG Deqi, TIAN Zhiwei
School of Economics and Management, Beijing Forestry University, P. R. China, 100083
[email protected]
Abstract: Due to the specialties of forestry business, there are some special meanings to analyze carbon
information disclosure of these enterprises. This paper firstly defines the content of carbon information,
and then examines 17 listed forestry enterprises as the sample of the carbon information disclosure,
drawing the conclusion that the carbon information disclosure of listed forestry enterprises in China is
still at its early age. In order to promote and standardize carbon information disclosure of forestry
enterprises, this paper proposes that the responsible authority should define the content of carbon
information disclosure, specify the greenhouse gases emissions standards, evaluate greenhouse gases
emission by enterprises, calculate carbon sequestration of forest resources, and strengthen accounting
research of carbon emissions.
Keywords: Forestry Enterprises, Carbon Information, Disclosure, Carbon Accounting
1.
Introduction
Scientific research shows that augment of concentration of greenhouse gases in the atmosphere should
bear the most blame for global warming. Greenhouse gases, which cause global climate change, include
carbon dioxide (CO2), sulfur dioxide (SO2), nitric oxide (N2O), methane (CH4), ozone (O3), six fluoride
SF6 and hydrogen sulfide fluorine carbon (HFC),etc. Carbon dioxide is accounted for 60% of the
greenhouse gas emissions and thus is the main greenhouse gases (Su Ming etc, 2009). Nowadays global
climate change has become a major issue concerned by international community. As a committed
emerging power, China attaches great importance to the problem of climate change. Early in 2007, the
government promulgated National Plan to Respond Climate Change. Later on the government
promulgated a series of acts such A Thousand Companies Energy-Saving Action, The Notice of
Establishing Government Forcing to Stock Energy-saving Production System and Comprehensive Plan
on Energy Saving and Emission Reduction. By the end of 2009, the fifteenth Conference of the Parties
to UNFCCC and the fifth Conference of the Parties to the Kyoto Protocol was held in Copenhagen,
Denmark, the Chinese government made solemn promise "slow emissions of carbon dioxide, reduce the
carbon dioxide emission per gross domestic product (GDP) unit by 40-45% by 2020 ".
Enterprise is the main body of the carbon emission source. It is estimated that 80% of the greenhouse
gases in the air is from operation of enterprises. Therefore, emission reduction has become part of
Chinese companies’ commitment to the nation and the climate. Since the enterprises bear this social
responsibility, their implementation should be properly disclosed.
Forestry is a sector with unique characteristics. In June 2009, Premier Minister Wen Jiabao stressed at
the central government conference on forestry work: "Forestry industry plays a crucial role in the
establishment of sustainable development strategy, improvement of ecology environment and the Grand
Design of Western China Development; it also takes a special position of responses to the climate
change". Meanwhile, forestry is an environment-sensitive industry (Patten DM. Exposure, 1991; Neu
P,Warsame H, Pendwell K,1998; NiskanenJ, Nieminen T.,2001). As one of social product providers, the
forestry enterprises share the commonness with those of other industries since they also emit greenhouse
gases to the atmosphere. On the other hand, the huge, carbon-fixating forest resource the industry boasts
（ ）
.
This program is sponsored by Special Fund for Central Government-Instructed Universities Fundamental Research
and Beijing Forestry University Science and Technology Innovation Plan RW2010-3
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plays an irreplacable role in carbon emission reduction. It is estimated by the UN intergovernmental
panel on climate change (IPCC) that about 2.48 trillion ton carbon is stored in the global terrestrial
ecosystems, of which 1.15 trillion ton carbon in the forest ecosystems. Forests cover an area which
equals 27.6% of global land area. Forests also hold 77% carbon storage of that held by all the plant. Soil
in forest reserves about 39% carbon of that in the soil worldwide. The forest ecosystem reserves 57%
carbon stored by world terrestrial ecosystem (Jia ZhiBang, 2008).
Therefore, it is very important and representative to analyze the carbon information disclosure of
forestry enterprise. Based on a sample of 17 listed forestry enterprises in China, this paper conducts a
research on carbon information disclosure and puts forward corresponding countermeasures and
suggestions.
2.
Definition & Content of Carbon Information
Since the greenhouse gases are mainly carbon dioxide, this paper will no longer strictly distinguish these
two concepts, and regards Carbon Information as all kinds of information relative to enterprises
emissions of greenhouse gases. The information includes whether show attention to climate change in
their development strategy, whether calculate greenhouse gas emissions, whether take measures to
reduce emissions of greenhouse gases. Based on these above and basic requirements for enterprises to
commit their society responsibility to climate change, this paper summarizes the main content of carbon
information disclosure as follows (see table 1):
Table 1 Content of Enterprise Carbon Information Disclosure
Detailed Content
Environmental protection content in development strategy
Strategy Statement
Clear aim in emission reduction
Analysis on business risks and opportunity caused by climate change
Total amount of greenhouse gases emission
Calculation of greenhouse Fuel consumption by class
gases emission
Value of greenhouse gases emission
Calculation of carbon sequestration by forestry
License on pollution emission
Management of greenhouse Whether total greenhouse gas emissions exceed the limit
gases emission
explicit measures to reduce greenhouse gases emissions
Continuous measuring the emissions of greenhouse gases
Subject
3.
Sample Selections
According to the Classification Forestry and Related Industries issued by State Forestry Administration,
P.R.C and the National Bureau of Statistics of China, the forestry and related industries refer to
industries relying on forest resources, wetland resources, sand resources, which chase ecological benefit ,
economical benefit and social benefit, provide the society (including part of its own need) wood
products, wetland products, sand products and services closely related to activities above. Forestry and
related industries mainly include: (1) the forest cultivation and lumber activities, (2) Non-lumber forest
cultivation and lumber activities, (3) auxiliary services to forestry production, (4) travel and leisure
service of forestry, (5) forestry ecosystem services, (6) professional technical service, (7) forestry public
administration and other organization services, (8) wood processing and wood products manufacture, (9)
paper pulp and paper manufacture (10) bamboo, rattan, palm and reed products manufacture, (11)
wildlife products process and manufacture, (12) Other Non-lumber forest products, (13) unclassified
forestry and related activities.
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Forestry enterprises refer to economic entities aiming to meet the needs of society and people, and
operating independently according to the law. A forestry enterprise involves a corporate body status,
financial self-sufficiency, the capability of cultivating, protecting, developing and utilizing of forest
resources and other related business activities. Currently the main form of forestry enterprises includes:
(1) forest cultivation and lumber enterprise, forestry tourism and service enterprise, (2)forest-paper
syndicate enterprise, (3) forest-board enterprise syndicate enterprise.
This paper mainly refers this definition of forestry enterprise when choosing the samples. All sample
enterprises own certain amount of forestry resources, especially excluding the ST stock enterprise.
Detailed list of sample can be found in the table 2:
Table 2 Study Samples
Company Title
Forestry resources (ended December 31, 2009)
YunNan Greenland
002200
Orient Landscape
(002310)
A 1 299.83 hm2 seedling cultivation base, RMB 137 949 446.99 consumptive
biological assets; RMB 1 111 673.26 productive biological assets.
（
）
71.53 hm2 Seedling Garden, RMB 28 590 261.99 consumptive biological assets.
YongAn Forestry
000663
120 666.67 hm2 Forest, RMB 428 879 963.94 consumptive biological assets, RMB 14
216 680.42 productive biological assets RMB 38 018 466.14 public welfare biological
assets.
JingGu Forestry
600265
34 000 hm2 forest resources.
（
）
（
）
JiLin Forest Industry
600189
（
）
ZhongFu Industries
000592
（
）
ShengDa Forestry
002259
（
）
（
）
WeiHua 002240
Kemian Wood Industry
002354
DeHua TB
002043
Dare Tech.
000910
（
（
（
）
）
）
，
Lumber rights to 300 000hm2 forest (the land belongs to the state and the corporate
ownership has not been officially entitled), RMB334 858.59 consumptive biological
assets Pinus massoniana Lamb. .
About 66 666.67 hm2 woodland 40 000hm2 of which has been entitled the forest
ownership) RMB 496 529 420.30 consumptive biological assets.
About 15 287.94 hm2 raw material forest, 14 291.54hm2 of which has been entitled the
forest ownership. The company cultivates another 8 707.20 hm2 raw material forest.
Forestation cost for woods without canopy: RMB 44 996 593.51, Forestation cost for
woods with canopy: RMB 153 663 098.94 .
The enterprise has cultivated a fast-growing woodland of 43 333.33hm2 consumptive
biological assets RMB 286 192 645.01.
（
）
，
，
The enterprise has contracted a woodland of 33 333.33hm2 for 50 year.
RMB 12 610 530.53 consumptive biological assets.
RMB 27 238 988.90 consumptive biological assets.
YiHua Timber
600978
The enterprise has cultivated a fast-growing woodland of 6 666.67hm2; . a base of 13
333.33 hm2 in Jiangxi Province is in blueprint, consumptive biological assets RMB
21 213 179.15.
YueYang Paper
600963
140 000 hm2 raw material base, woodland assets RMB1 247 369 232.04.
（
（
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）
ChenMing Paper
000488
raw material base of 40 000hm2,lumber volume more than 3 000 000m3, consumptive
biological assets RMB 177 547 350.59, RMB 1 821 929.00 public welfare biological
assets.
A woodland base of 163 333.33hm2, 137 333.33hm2 of which has been entitled the
forest ownership.consumptive biological assets RMB 496 725 000.
MCC Meili Paper
A woodland base of 20 300hm2, of which forest takes 11 520hm2, consumptive
QingShan Paper
600103
（
（
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）
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（000815）
biological assets RMB 312 401 931.95.
Nanzhi Co.
600163
A woodland base of 50 000hm2 in construction and will finish in 5 years. 3 788.07hm2
woodland finished at the end of 2009. Consumptive biological assets RMB
134 594 501.58.
（
4.
）
Descriptive Analysis of Forestry Enterprises’ Carbon Information Disclosure
In order to reflect the real situation of sample enterprises’ carbon information disclosure, this paper
obtains relevant information from the Ju Chao consulting website (http://www.cninfo.com.cn) and the
annual reports or social responsibility reports of enterprises. Carbon information disclosure of sample
enterprises is listed in table 3:
Table 3 Carbon Information Disclosure of 17 Sample Enterprises
Subject
Detailed Content
Environmental protection
development strategy
Strategy Statement
Status-quo
content
in
Clear aim in emission reduction
No disclosure
Analysis on business risks and
opportunity caused by climate change
No disclosure
Total amount of greenhouse gases
emission(carbon dioxide, Unit: ton)
Calculation
of
greenhouse gases
emission
Management
of
greenhouse gases
emission
All 17 enterprises state environment
protection idea in their development strategy
：
2 enterprise disclosed their emission of
carbon dioxide (CO2) and sulfur dioxide
(SO2)
Fuel consumption by class (Unit MW)
No disclosure
Value of greenhouse gases emission
No disclosure
Calculation of carbon sequestration by
forestry
No disclosure
License on pollution emission
No disclosure
Whether total greenhouse gas emissions
exceed the limit
explicit measures to reduce greenhouse
gases emissions
Continuous measuring the emissions of
greenhouse gases
No disclosure
3 enterprise disclosed their measures
No disclosure
Through analysis above we can draw the following judgments:
(1) Since nowadays China takes environmental protection as a basic state policy, nearly all the sample
enterprises can realize the importance of environmental protection, and regard carbon emissions
reduction as an important social responsibility to climate change. But many enterprises have not made it
clear how to fulfill their promise during their production, some of them even know no more than the
literal meaning of the flashy slogans. This is demonstrated by the fact that although all 17 enterprises
state environment protection idea in their development strategy, no enterprise submited its goal of
reduction on greenhouse gases emission or analyzed potential business risks and opportunity caused by
climate change.
(2) Calculation of greenhouse gases emission is the foundation of carbon information disclosure and
further management. Only two enterprises roughly disclosed their emission of carbon dioxide (CO2) and
sulfur dioxide (SO2). No enterprise disclosed its fuel consumption or valued greenhouse gas emissions.
At the same time, for forestry enterprises, forest resources are generally recognized to function
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significantly in carbon sequestration, which is a positive external effect. From general principles, the
enterprise should willing to disclose relevant information, but in reality no enterprise does so ( Though
most forestry enterprises revealed information on their owned or controlled forest resource, probably
because they don't fully understand the calculation of carbon sequestration by forest resources, these
enterprises didn’t disclose such information.).
(3) On the management of greenhouse gas emissions, no enterprise disclosed whether obtain licenses on
pollution emission. No enterprise conducted continuous measurement of greenhouse gas emissions.
Only three enterprises revealed the measures to reduce greenhouse gases emission, but relatively brief.
As mentioned above, carbon information disclosure of listed forestry enterprises in China is still at
its early age. Because the information disclosure of listed companies is relatively strict and standard
among all enterprises, accordingly private forestry enterprise's information disclosure condition will be
much more primitive. Generally speaking, information disclosure of forestry enterprises is far from
perfect.
5.
Suggestions to Improve Carbon Information Disclosure of Enterprise
5.1 Authorities Concerned Shall Specify the Requirement for the Content of Carbon Information
Disclosure
The development of ecological environmental protection consciousness is along with the progress of the
society, thus carbon information disclosure of forest enterprise should be gradually improved. From the
perspective of carbon information disclosure, presently there are following laws guiding the disclosure
of carbon information: Guiding opinions on Central Government-Owned Enterprises’ Fulfillment of
Social Responsibilities Document No.1, 2008, SASAC , Guide on Environment Information Disclosure
of Listed Companies of Shanghai Stock Exchange, Guide on Social Responsibilities of Listed Companies
of Shenzhen Stock Exchange, Application Guide on Enterprise Internal Control, Chapter 4—Social
Responsibility Document No.11, 2010, MOF & CSRC .The content of carbon information disclosure in
current regulation can be found in the table 4.
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）
（
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Table 4
Content of Carbon Information Disclosure in Current Regulations
Regulations
Content of Carbon Information
Guiding opinions on Central
Government-Owned Enterprises’
Fulfillment
of
Social
Responsibilities
Meet its respective goal of energy saving and emission reduction. Promote
energy-saving sectors and products. Makes the economic growth
sustainable and its procedures recyclable. More budget for environmental
protection. Refine the production sections and reduce the emission of
pollutants. The development should be following a cost-effective,
eco-friendly manner
Guide
on
Environment
Information Disclosure of Listed
Companies of Shanghai Stock
Exchange
Guide on Social Responsibilities
of Listed Companies of Shenzhen
Stock Exchange
Application Guide on Enterprise
Internal Control, No.4—Social
Responsibility
（1）Guidelines and annual target for emission reduction;
（2）Annual budget for cost in energy and resources;
（3）Types, quantity, pollutant concentration and outlet.
Reduce all-round energy and resource cost; Polluters should resort to local
environment protection department for registration; Pay for necessary
carbon trading and take up responsibility for the pollution.
Meet its respective goal of energy saving and emission reduction. Reduce
the cunsumption of energy and the emission of pollutants. Establish a
comprehensive management of waste gas, waste water and waste residue.
From regulations in the table 4, we can see that current legal system has not given a detailed content of
carbon information, and thus not feasible. Only through these regulationes can we hardly make sure the
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information disclosed fully and accurately. Therefore, the author think that the authority should follow
the frame of table 2, or put forward a specific law to standard the carbon information disclosure.
5.2 Authorities Concerned Should Specify Measurement Standards of Greenhouse Gases
Emissions
To make the enterprise information disclosure full and accurate, we should specify measurement
standards of greenhouse gases emissions. Take CO2 emissions for instance, according to the benchmark
given by the 2006 IPCC list of Greenhouse Gases, CO2 emissions produced by fossil fuel consumption
can be calculated as followed
CO2 emissions = fossil fuel consumption × coefficient of CO2 emissions
Coefficient of CO2 emissions = Low calorific value × coefficient of carbon emissions × carbon
oxidation rate × carbon conversion coefficient
From the formulas above, the enterprise should take record of fuel consumption statistics, then
calculated carbon emission amount according to certain standards Main fossil fuels for CO2 emissions
can be obtained from the government’s standard or from the 2006 IPCC list of Greenhouse Gases.
5.3 Valuations of the Enterprise’s Greenhouse Gases Emissions
The quantitative measurement of carbon emission is the first step of disclosure. Based on this, we should
further conduct valuation of the emission. Valuation mainly includes following expenses: (1)
amortization expenses of waste emission license, (2) fines for excess emissions of greenhouse gases, (3)
carbon tax payment, (4) amortization of depreciation of the waste emission license. (Jiang Deqi ,Tian
Zhiwei, etc.2009)
5.4 Quantitative Researches on Carbon Sequestration Function of Forest Resources
Activities such as restoration of forest and reduction of deforestation can reduce the atmospheric CO2
concentration and slow climate warming. Therefore, the enterprises owning the forest resources have
positive external effects. But all the forestry enterprises have not disclosed this information, the main
reason is that enterprise does not know how to measure and disclose such information. This paper lists
common-used calculation methods of carbon sequestration in table 5. The enterpriseS can adapt
appropriate method to calculate the disclosure of the amount of carbon sequestration by their forest.
Table 5
Measurement Methods of Forest Carbon Sequestration Function
Methods
photosynthesis
Biomass method
Carbon volume method
Biomass list method
Whirlpool method
Box method
Main Content
According to photosynthesis, the forests need 1.63g CO2 to produce 1g pure
matter.
Calculation is based on the biological amount at unit area, forest area,
distribution of biological amount in tree, carbon content in every organ of
trees.
Method is based on sampling of main kind of trees in forest. Researcher needs
sample the main kind of tree in forest and calculate their average carbon
volume, then transfer the total amount to biomass and use coefficient between
biomass and carbon volume to calculate the biomass.
Mathematical model is based on the relationship between biomass and carbon
volume.
Method directly measures the whirlpool rate above treetop, and then
calculates the carbon sequestration by forestry ecology system.
Put part of plant into a enclosed testing box, then measure the change of
CO2 concentration, which is the carbon absorbed by forest.
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5.5 Strength the Accounting Research of Carbon Emission
From 1990s, the ecologists started research on the local and global carbon accumulation volume and
flow. However, these researches mainly macroscopically focused on matter flow and carbon substance,
isolating from the corporate accounting system (Zhou ZhiFang, Xiao Xu, 2009). In 2003, FASB tried to
put forward EITF03-14 – Accounting Method under Certificated Emission Trade Mechanism. This trial
was blocked due to conflicts with other accounting principles. In 2004, IASB issued IFRIC3, but this
document was withdrawn after 6 months. Since 2007, IASB and FASB started a joint research on
accounting method under certificated emission trade. Hopefully this program will be finished in 2011.
Recently, Chinese scholars attached their attention on carbon emission but still at stage of theoretical
discussion. An in-depth research on not only the substance research but also the accounting method was
strongly called for. We should also apply these ideas to guide our work as soon as possible, not just on
paper.
6.
Conclusion
Carbon emission is one of the most important reasons responsible for global warming, therefore control
of carbon emission means a lot in stopping unexpected climate change. Meanwhile calculation and
disclosure of carbon emissions is an important aspect of responding management, helping carbon
emissions management deepened and refined. This paper mainly analyzed carbon information disclosure
on the basis of listed forestry enterprises. Since forestry enterprises play special role in carbon emissions
and carbon sequestration, they are entitled unique function to address climate change. From the analysis
of sample enterprises, the carbon information disclosure is found not very optimistic and still at its early
stage. To strengthen the theoretical research and the quantitative measurement of carbon information is
the cornerstone of high quality carbon information. Quantitative measurement includes not only the
accounting of real items, but also transformation to monetary sense. We should gradually integrate this
information with accounting system, only by doing so can we make carbon information disclosure full,
complete and accurate, thus can we provide more accurate quantitative data to the management of
carbon emissions.
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