Independent Auditor’s Report on Applying Agreed-Upon Procedures

RY2014 Audit Procedures - Set 1 - Project-specific Sales (Sales by Project) Only

To the Board of Directors of [Participant Company for which Audit was Performed] and Center for Resource Solutions (CRS):

[Name of Auditor Company] has performed the procedures enumerated below, which were agreed to by [Participant Company for which Audit was Performed], solely to assist [Participant Company for which Audit was Performed]with respect to complying with annual reporting requirements of the Center for Resource Solutions’ Green-e Climate program for the year ended December 31, 2014. This agreed-upon procedures engagement was performed in accordance with standards established by the American Institute of Certified Public Accountants. The sufficiency of the procedures is solely the responsibility of the specified users of the report.

Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.

III.A.Verification of Emissions Reduction Retirements and/or Transfers

The objectives of performing these procedures are to provide assurances relating to the following:

  • The emissions reductions retired and transferred by Seller were eligible emissions reductions and accurately measured, reported and documented.
  1. Obtain a completed copy of Worksheet 1[1] from the Seller, containing the detail of the annual retirements and transfers of emissions reductions used to supply Certified Offsets. For every project that is identified on Worksheet 1, the Project Name, Project Type, Project Location (country), Project Start Date (year), Endorsed Program, Registry Name, Project ID, Vintage (year), Quantity of Emissions Reductions (Metric tons CO2e), Registry Serial ID Number(s) (range), and Name of WholesaleSupplier (where applicable) must be disclosed on Worksheet 1. Note any exceptions.

Step III.A.1 was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. For each project listed on Worksheet 1, confirm that the Project Name, Project Type, Project Location, and Endorsed Program match the information found on the Checklist. Note if any projects on the Checklist are not included on Worksheet 1, and if any projects on Worksheet 1 are not included on the Checklist.

Step III.A.2 was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. For each project listed on Worksheet 1, confirm that the Endorsed Program reported in Column 1E is either the American Carbon Registry (ACR), Climate Action Reserve (CAR), the Verified Carbon Standard (VCS), or the Gold Standard (GS) (listed by their acronyms), and that only one Endorsed Program is reported for each project listed. Note any exceptions.

Step III.A.3 was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. For ownership of emissions reductions from the American Carbon Registry (ACR), Climate Action Reserve (CAR), the Verified Carbon Standard (VCS), and the Gold Standard (GS) listed on Worksheet 1, the Seller must have a Registry Report from an Approved Registrydemonstrating the retirement or transfer of emissions reductions for Certified Offset sales. Obtain these Registry Reports.

Step III.A.4 was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. For each unique row on Worksheet 1, verify that the combination of Project Name (Column 1A), Vintage (year) (Column 1H), Project ID in Registry (Column 1G), Quantity of Emissions Reductions (metric tons CO2e) (Column 1I), and Registry Serial ID Number(s) (Column 1J) reported matches and corresponds to retirements/transfers, or aggregations thereof[2], listed on the Registry Reports. Note a discrepancy in any of the above categories as an exception. Also for these retirements/transfers, please note if the “retirement reason” or “memo” field, and/or the “subaccount name” in the Registry Report indicates retirement for a voluntary program other than Green-e Climate or a compliance program, or for a RY that is not RY2014.

Step III.A.4.a was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. On all Registry Reports, examine the Registry Serial ID Number(s) associated with all retirements/transfers indicated or marked as being for RY2014 Green-e Climate Certified sales and verify that these numbers are included in the numbers or ranges reported in Column 1J on Worksheet 1. Note any exceptions.

Step III.A.4.bwas performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Confirm the accuracy of all Registry Reports by accessing Seller’s Registry electronic account(s) and comparing Registry Reports to actual data in the Seller’s account(s). Follow the instructions in Section I of Appendix C of the Audit Overview and Provisions document and verify that the information in the Registry matches the information on the Registry Reports. Note any exceptions.

Step III.A.4.c was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. The Registry used must be an Approved Registry listed on the Checklist. Note any exceptions.

Step III.A.4.d was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. For each project, verify that the total unique Registry Serial ID Number(s) in Column 1J equals the total Supply of Emissions Reductions in Column 1I (if a range is provided:[end serial ID]–[beginning serial ID] + 1 = [metric tons reported in Column 1I). Note any exceptions.

Step III.A.5 was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Examine the vintage year reported in Column 1H for each unique combination of Project Type, Project Location (country), and Endorsed Program on Worksheet 1 and verify that the Vintage (year) reported in Column 1H matches or falls within the Vintage (year or range of years) reported in Column 2E of Table 2.1 in Worksheet 2 for that combination.

Step III.A.6 was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. For hydropower facilities listed on Worksheet 1[3] where the Project Location (country) in Column 1C is listed as the United States or Canada, verify that at least one of the following is true for each hydropower facility listed:

a.The facility is listed on the Low Impact Hydropower Institute (LIHI) website, at: also in this case, check that the date of LIHI certification is on or before the first generation date of any emissions reduction being claimed from a LIHI Certified facility; note any exceptions;

b.For Canadian hydropower facilities only, the facility is listed as EcoLogoTM Certified at: also in this case, check that the date of EcoLogo certification is on or before the first generation date of any emissions reduction being claimed from a EcoLogo Certified facility; and/or

c.The hydropower facility consists of a turbine in a pipeline or a turbine in an irrigation canal.

Explain how these were confirmed[5] and note any exceptions.

Step III.A.7 was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. For hydropower facilities listed on Worksheet 1 where the Project Location (country) in Column 1C is listed as a country other than the United States or Canada, verify that the nameplate capacity of the hydropower facility is less than 10MW, or if it is a “grouped project” (consisting of more than one instance of the project activity at multiple locations within a defined geographic boundary), which is certified as a group or program of activities, verify that no single instance of the project within the group exceeds 10MW nameplate capacity.[6] Note any exceptions.

Step III.A.8 was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Examine any projects where the Endorsed Program in Column 1E is listed as CAR and the Project Type in Column 1B is listed as Forestry, and verify that the project was certified/validated under version 3.0 or later of the CAR Forest Protocol.[7] Note any exceptions.

Step III.A.9 was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Examine any projects where the Endorsed Program in Column 1E is listed as VCS.

a.Confirm that the project was validated according to version VCS 2007 or VCS 3.0.[8] Note any exceptions.

Step III.A.10.a was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

b.If the project was validated according to version VCS 2007 and used VCS “Test 2 – Performance Test” to demonstrate additionality (see the Project Design Document for the project, available on the VCS website[9]), confirm that the performance standard used explicitly lists eligible technologies. Note any exceptions.

Step III.A.10.b was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

c.Where the Project Type in Column 1B is NOT listed as Agriculture, Forestry and/or Land Use (AFOLU), confirm that the period of time for which GHG reductions/removals are verified (verification period) does not exceed three years.[10] Note any exceptions.

Step III.A.10.c was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

d.Where the Project Type in Column 1B is listed as Agriculture, Forestry, and/or Land Use project, confirm that the period of time for which GHG reductions/removals are verified (verification period) does exceed seven years.[11] Note any exceptions.

Step III.A.10.d was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

e.Where the Project Type in Column 1B is listed as Agriculture, Forestry, and/or Land Use, verify receipt of proof from Seller that the project meets the native species requirement under the Green-e Climate Standard v2.1[12] (Section 6.4.d, pg. 10). Note any exceptions.

Step III.A.10.e was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

f.Where the Project Type in Column 1B is listed as Agriculture, Forestry, and/or Land Use, and where the project start date is before 2002, verify that the project was validated with 5 years of the start date.[13] Note any exceptions.

Step III.A.10.f was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Examine any projects where the Endorsed Program in Column 1E is listed as ACR.[14]
  2. Confirm that the project was validated in accordance with an ACR methodology that was approved after v2.0 of the ACR Standard in 2010. Note any exceptions.

Step III.A.11.a was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Confirm that the project was not operational for five years without becoming validated or producing verified emissions reductions according to ACR’s or another Endorsed Program’s requirements (i.e. that the period of time between the project’s start date and the date of validation does not exceed 5 years).[15] Note any exceptions.

Step III.A.11.b was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Where the Project Type on Column 1B is listed as Agriculture, Forestry and/or Land Use (AFOLU), determine whether the project was registered under ACR’s Afforestation and Reforestation of Degraded Lands methodology. If so, verify that the project was approved under v1.1 or later of the methodology.[16] Note any exceptions.

Step III.A.11.c was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Where the Project Type on Column 1B is listed as Industrial Process Emissions, determine whether the project was registered under ACR’s Conversion of High-Bleed Pneumatic Controllers in Oil and Natural Gas Systems methodology. If so, verify that the project was approved under v1.1 or later of the methodology.[17] Note any exceptions.

Step III.A.11.d was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Test the mathematical accuracy of Worksheet 1. Agree total Quantity of Emissions Reductions in Column 1I of Table 1 to the total listed in the last row of Column 1I. Note any exceptions.

Step III.A.12 was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

B.Verification of Sales

The objectives of performing these procedures are to provide assurances relating to the following:

  • The emissions reductions sold were accurately measured and reported.
  • The quantity and characteristics of the emissions reductions sold are accurately calculated and reported.
  1. Obtain a completed copy of Worksheet 2. Reference the Seller’s Checklist for a list of the projectsthat must be included in Table 2.1. For each project listed in Column 2A of Table 2.1, confirm that the Project Name (Column 2A), Project Type (Column 2B), Project Location (Column 2C), and Endorsed Program (Column 2D) match the information found on the Checklist. Note if any projects on the Checklist are not included in Table 2.1, and if any projects in Table 2.1 are not included on the Checklist.

Step III.B.1 was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Verify that projects and vintages listed in Columns 2A and 2E, respectively, in Table 2.1 match Columns 1A and 1H in Worksheet 1, respectively. Note any exceptions.

Step III.B.2 was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Obtain copies of Internal Reporting Documents that Indicate Sales (“internal reporting documents”) from the Seller that were used to complete Worksheet 2. They should contain the details of sales and scheduled deliveries under multi-year purchase agreements per customer, including the projects,the transaction type (online sales, offline sales, automatic recurring sales, or multi-year purchase agreement), the customer type (individual/residential, commercial, or wholesale customer), the customer location (US State or non-US country), whether or not it was a sale made by a Third-party Distributor, and whether or not it was a sale for LEED certification(see Appendix B of the Audit Overview and Provisions document for a list of documents that Sellers should supply to their Auditor). From the Internal Reporting Documents:
  1. Recalculate the Total Sales (metric tons CO2e) per projectand per vintage (year) and agree this to sales recorded in Column 2F in Tables 2.1.[18] Note any exceptions.

Step III.B.3.a was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Using the Sampling Guidelines in Section II.G of the Audit Overview and Provisions document, select a sample of customer sales transactions detailed in the Internal Reporting Documents for customers that purchased fewer than 25,000 metric tons CO2e of emissions reductions from Seller.[19],[20] Report the total population size and the sample size chosen.

Step III.B.4 was performed: Yes. No. N/A.

Total population:

Sample size:

Exceptions, Notes, Reason for “No” or “N/A”:

  1. For each transaction selected in III.B.4:
  2. Obtain copies of Billing Statements and/or any other necessary records that contain the details of the individual sale. This could be a multi-year agreement entered into in a previous RY, or an automatic recurring purchasing agreement entered into in a previous RY. Specify what type of records are used.

Step III.B.5.a was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Using Billing Statements obtained in the previous step, confirm that the emissions reductions sold per customer that is reported on the Internal Reporting Documents is accurate in terms of the amount of emissions reductions and vintage sold. Note any exceptions.

Step III.B.5.b was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Verify that the sale from each project in RY2014 occurred within the range of “Dates when Active in 2014” reported on the Checklist. Note any exceptions.

Step III.B.5.c was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Using the Billing Statements obtained in Step III.B.5.a, verify that the details of the sale reported on the Internal Reporting Documents are accurate, including the project, vintage (year),customer type (individual, commercial, or wholesale), customer location (US state or non-US country), transaction type (online, offline, multi-year purchase agreement, or automatic recurring sale), whether or not it was a sale made by a Third-party Distributor, and whether or not it was a sale for LEED certification. Note any exceptions.

Step III.B.5.d was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Note if review of RY2014 Billing Statements reveals evidence or indication that Certified Sales were made (Billing Statements exist for sales) which were not reported on Internal Reporting Documents.

Step III.B.5.e was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

f.Compare the information reported on the Internal Reporting Documents to the Project Information that the customer received and verify that the customer received the emissions reductions from the correct project and vintage. Note any exceptions.

Step III.B.5.f was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Confirm that the list of Project Names included in Column 2A in Table 2.1 matches both Column 2G in Table 2.2and Column 2L in Table 2.3.[21] Note any exceptions.

Step III.B.6 was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Using Internal Reporting Documents obtained in Step III.B.3:

a.Recalculate the sales and scheduled deliveries to individual customers per project and agree this to Column 2I in Table 2.2. Note any exceptions.

Step III.B.7.a was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

b.Recalculate the sales and scheduled deliveries to commercial customers per project and agree this to Column 2Hin Table 2.2. Note any exceptions.

Step III.B.7.b was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

c.Recalculate the sales and scheduled deliveries to wholesale customers per project and agree this to Column 2Jin Table 2.2.[22] Note any exceptions.

Step III.B.7.c was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

d.Recalculate online sales per project and agree this to Column 2M in Table 2.3. Note any exceptions.

Step III.B.7.d was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

e.Recalculate the one-time, offline sales per project and agree this to Column 2N. Note any exceptions.

Step III.B.7.e was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

f.Recalculate the scheduled RY2014 deliveries under multi-year purchase agreements per project and agree this to Column 2O. Note any exceptions.

Step III.B.7.f was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

g.Recalculate automatic recurringsales per project and agree this to Column2P. Note any exceptions.

Step III.B.7.g was performed: Yes. No. N/A.

Exceptions, Notes, Reason for “No” or “N/A”:

  1. Using the Sampling Guidelines in Section II.G of the Audit Overview and Provisions document, select a sample of transactions detailed in the Internal Reporting Documents for customers scheduled to receive deliveries in RY2014 in accordance with a multi-year purchase agreement. Report the total population size and the sample size chosen.

Step III.B.8 was performed: Yes. No. N/A.