A member firm of Ernst & Young Global Limited Ernst & Young LLP 5 Times Square New York, NY 10036-6530 Tel: 1 212 773 3000 Fax: 1 212 773 6350 ey.com
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Ernst & Young LLP 5 Times Square New York, NY 10036-6530 Tel: +1 212 773 3000 Fax: +1 212 773 6350 ey.com Independent Accountants' Review Report To the Management of Verizon Communications Inc.: We have reviewed the Verizon Communications Inc. (Verizon) Schedule of environmental indicators (the Subject Matter) included in the Appendix for the year ended December 31, 2019 in accordance with Verizon's criteria (the Criteria) as set forth in the Appendix. Verizon's management is responsible for the Subject Matter included in the Appendix, in accordance with the Criteria. Our responsibility is to express a conclusion on the Subject Matter based on our review. Our review was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants (AICPA) AT-C section 105, Concepts Common to All Attestation Engagements, and AT-C section 210, Review Engagements. Those standards require that we plan and perform our review to obtain limited assurance about whether any material modifications should be made to the Subject Matter in order for it to be in accordance with the Criteria. A review consists principally of applying analytical procedures, making inquiries of persons responsible for the Subject Matter, obtaining an understanding of the data management systems and processes used to generate, aggregate and report the Subject Matter and performing such other procedures as we considered necessary in the circumstances. A review is substantially less in scope than an examination, the objective of which is to obtain reasonable assurance about whether the Subject Matter is in accordance with the Criteria, in all material respects, in order to express an opinion. Accordingly, we do not express such an opinion. A review also does not provide assurance that we became aware of all significant matters that would be disclosed in an examination. We believe that our review provides a reasonable basis for our conclusion. In performing our review, we have also complied with the independence and other ethical requirements set forth in the Code of Professional Conduct and applied the Statements on Quality Control Standards established by the AICPA. As described in the Appendix, the Subject Matter is subject to measurement uncertainties resulting from limitations inherent in the nature and the methods used for determining such data. The selection of different but acceptable measurement techniques can result in materially different measurements. The precision of different measurement techniques may also vary. Based on our review, we are not aware of any material modifications that should be made to the Schedule of environmental indicators for the year ended December 31, 2019 in order for it to be in accordance with the Criteria. August 13, 2020 A member firm of Ernst & Young Global Limited 1095 Avenue of the Americas New York, New York 10036 Appendix A: Management's Assertion Verizon Communications Inc. Schedule of environmental indicators For year ended December 31, 2019 Final Results Indicator Name Total energy consumed Percentage grid electricity Percentage renewable electricity Scope 1 greenhouse gas (GHG) emissions Scope 2 GHG emissions (locationbased) Scope 3 GHG emissions (exclusively related to corporate business travel) Network traffic Carbon Intensity Water withdrawal Unit Gigajoules (GJ) % % Metric tonnes (MT) of CO2 equivalent (CO2e) MT of CO2e MT of CO2e Petabytes Metric tonnes of CO2e per terabytes (TB) Billions of gallons Amount 42,450,781 84.7% 1.5% 358,753 4,006,874 95,971 173,500 0.02457 2.35 Criteria Reporting Boundaries Verizon has selected an organizational boundary based on operational control. Where available, energy, greenhouse gas emissions and water withdrawal are calculated for the year ended December 31, 2019 on the basis of actual (e.g., metered) data received as of April 2020. In certain instances where actual data is not available, Verizon estimates usage data based on estimation methodologies defined in the Greenhouse Gas Protocol. Energy Total energy consumed is calculated based on SASB TC301-01 for emissions sources included in scope 1 and 2 GHG emissions, namely natural gas, gasoline, diesel, jet fuel, propane, kerosene, compressed natural gas, B02, B05, B11, B20, E85, methanol, ethanol, electricity, steam and chilled water. Percentage grid electricity is calculated based on SASB TC301-01 as total electricity consumed as purchased from the grid (and reported for Scope 2 GHG emissions) divided by total energy consumed. Percentage renewable electricity is calculated based on SASB TC301-01 as total renewable electricity generated on-site or purchased in the form of energy attribute certificates divided by total energy consumed. GHG emissions 1. Scope 1 emissions reported include direct emissions from stationary and mobile fuel combustion from the follow sources: Natural gas B02 Gasoline B05 Diesel B11 Jet Fuel B20 Propane E85 Kerosene Methanol Compressed natural gas Ethanol For all fuels, except natural gas and ethanol, only CO2 emissions are reported. Business-related fuel consumption from vehicles provided through executive compensation packages is deemed to be de minimis and therefore excluded from Scope 1 emissions. 2. Scope 2 emissions reported on the location-based method include indirect emissions from the following sources and are calculated on the basis of actual (e.g., metered) and estimated data. Electricity Steam 3. Scope 3 emissions reported include exclusively emissions from corporate business travel (air and rail) and are calculated based on miles traveled as provided by travel agencies to a third-party data aggregator which then provides total miles traveled to Verizon. Air travel distance categorizations are determined using miles traveled data of which 75% is calculated based on individual travel leg with the remaining 25% calculated based on origin and destination. Miles traveled are based on original bookings, excluding exchanges. These impacts have been determined to be immaterial to overall corporate business travel emissions. Travel booked outside of our approved vendors is not included. Emissions Reporting Standards Verizon calculates scope 1, scope 2 and scope 3 (exclusively related to corporate business travel) GHG based on the following standards: The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard Revised Edition by the World Resources Institute (WRI)/World Business Council for Sustainable Development (WBCSD) GHG Protocol Scope 2 Guidance: An amendment to the GHG Protocol Corporate Standard by WRI The Corporate Value Chain (scope 3) Accounting and Reporting Standard: Supplement to the GHG Protocol Corporate Accounting Standard, by the WRI/WBCSD Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report (2007) The Climate Registry General Reporting Protocol, Version 2.0, March 2013 UK Department for Environment Food & Rural Affairs (DEFRA) 2012 guidance (used for air travel distance categorizations) Table 1 - Emission Factors Used Emission factors Scope 1 emissions Scope 2 emissions Scope 3 emissions (exclusively related to corporate business travel) US EPA 2013 Revisions to the Greenhouse Gas Reporting Rule: 40 CFR Part 98 Subpart C, Tables C-1 and C-2 (released November 29, 2013) US Energy Information Agency (EIA) Voluntary Reporting of Greenhouse Gases Form EIA-1605, Appendix H: Fuel Emissions Factors (November 18, 2010) WRI GHG Protocol Emission Factor from Cross Sector Tools (March 2017) Stationary Combustion, Table 1-3 and Table 12 · US EPA 2016 Emissions and Generation Resource Integrated Database (eGRID) (released February 15, 2018) · International Energy Agency (IEA) 2017 CO2 Emissions from Fuel Combustion Highlights Report, "CO2 emissions per kWh from electricity generation" Table (released 2019) · US Energy Information Agency (EIA) Voluntary Reporting of Greenhouse Gases Form EIA-1605, Appendix F.1 Domestic Electricity Emission factors, 1999-2002 and Appendix N: Emission Factors for Steam and Chilled/Hot Water (November 18, 2010) · UK Department for Environment Food & Rural Affairs (DEFRA) 2019 GHG conversion factors for company reporting Network traffic Network traffic is calculated according to the estimation methodologies in Table 2 in TB divided by 976.5625. Where possible, Verizon uses actual network data throughput, in the event that actual data is unavailable, some network data might be extrapolated based on historical data, seasonality, expected growth or other business changes. Table 2 - Terabytes of data traffic estimation methodologies by network Business Segment Network Methodology Wireless EVDO + 1X PMD: These Data traffic is measured in megabytes (MB) for downlink are the 3G mobile (forward) and uplink (reverse) traffic across Verizon's broadband technologies Evolution Data Optimized (EVDO) and 1X Packet Mode used by Verizon. Data (PMD) networks. MB are converted into total terabytes (TB) by using the binary conversion factor (1TB = 10242 MB). Wireless Voice Voice traffic is measured in centum call seconds (CCS) across Verizon's wireless network. CCS is a unit of traffic density that is equivalent to one call (including call attempts and holding time) in a specific channel for 100 seconds. CCS are converted into minutes of usage (MOUs) by dividing total CCS by 0.6 (1CCS = 1.66 pegs/min). MOUs are converted into bits by multiplying MOUs by 14,256 bits per second (bps) and then multiplying by 60 seconds per minute. A wireless voice call generates 9,600 bps and it is assumed that the activity factor is 90% (0.45 uplink and 0.45 downlink) and the hand-off factor is 1.65 (9,600 bps * 90% * 1.65 = 14,256 bps). Bits are converted into bytes by dividing by 8 (bits/byte) and then to total terabytes (TB) by using the binary conversion factor (1TB = 10244 bytes). Wireless Long-term evolution: This is the high speed 4G network. Data traffic is measured in megabytes for downlink (forward) and uplink (reverse) data traffic across Verizon's 4G LTE network. MB are converted into total TB by using the binary conversion factor (1TB = 10242 MB). Wireless 5G Fixed Data traffic is measured in megabytes for downlink (forward) and uplink (reverse) data traffic across Verizon's 5G Fixed Wireless network. MB are converted into total TB by using the binary conversion factor (1TB = 10242 MB). Wireline Telecom Transport: This network consists primarily of point to point data transport services sold to small and medium businesses, large corporations, government or individual customers in the US (In Franchise = Verizon Network) Data traffic was measured in bps by multiplying the monthly billed circuit counts by standard bandwidth rates per circuit type. 100% utilization over each circuit was assumed. The circuits included are the following: ISDN-PRI (Integrated services digital network - Primary rate interface), DS1, DS3, OC3, OC12, OC48, OC192 SONET (synchronous optical networking) and VON_10M_100M_Gain. Bits per second are converted into total TB by using the binary conversion factor (1TB =10244 bytes). Wireline Telecom Switched Ethernet Service Data traffic is measured in bytes per second (Bps) for all (SES): This network egress (output) data transferred from aggregation switches includes metropolitan (AS) to edge switches (ES), aggregation switches to OLT- Wireline Telecom Wireline Telecom Wireline Telecom Ethernet data services in the US. SNI (Optical line termination service node interface) ports and aggregation switches to customer circuits (CC). Data traffic is collected daily by polling each interface on all AS devices in this network. The Bps are converted into total TB by using the binary conversion factor (1TB = 10244 bytes). Video- Broadcast: This network includes video broadcasts through FiOS cable services in the US. Data traffic is measured in megabits per second (Mbps) for all egress data transferred across all broadband multiplex routers (BMRs). Data traffic is collected daily by polling directly all BMR ports. On a monthly basis, average monthly data traffic per device is estimated by adding daily traffic captured for the entire month and dividing it by the number of days for which data was collected in that given month. Then the averages for each device are summed at month-end and multiplied by total number of days in that given month to obtain total traffic (in Mbps). The Mbps are converted into total TB by using the binary conversion factor (1TB = 10244 bytes). Video on Demand (VOD): This network includes video streaming services (pay per view, subscription or free) available only to FiOS Video customers in the US. Data traffic is measured in megabits per second (Mbps) for average ingress (input) data received at the video aggregation routers (VAR) from the video distribution routers (VDR). Data traffic is collected daily by sample polling each interface on all VAR devices connected to a VDR every five minutes. The Mbps are converted into TB by using the binary conversion factor (1TB = 10244 bytes). Frame Relay (FR), Asynchronous Transfer Mode (ATM): This network provides local DSL (digital subscriber line) services in the US. Data traffic is measured in cell counts for all egress data transferred across the FR/ATM switches. Cells are of a fixed length of 53 octets (or bytes). Cell counts are converted into bytes by multiplying cell counts by 53 octets (or bytes). Bytes are converted into TB by using the binary conversion factor (1TB = 10244 bytes). Wireline Telecom Voice: includes services Verizon. This network legacy Voice provided by Data traffic is measured in minutes of usage (MOUs) for calls originating in Verizon's Telecom network (VZT), transit calls that do not originate or terminate on the VZT network, and calls terminating on the VZT network that originated outside the VZT network. MOUs are captured hourly through all US class 5 and 4/5 access switches. The voice channels transporting this data have a maximum circuit capacity (or bandwidth rate) of 64,000 bps. MOUs are converted into bps by multiplying total MOUs by 60 seconds per minute and by 64,000 bps. The bps are converted into Bps by dividing the bps by 8 bits per byte. The Bps are converted into total TB by using the binary conversion factor (1TB = 10244 bytes). Wireline Business Domestic Public Internet Protocol (IP): This network includes enterprise and residential public wireline services such as, FiOS internet, high speed internet (DSL), partner ports, peering and security in the US. Data traffic is measured in megabits per second (Mbps) as the average of ingress and egress from backbone to edge routers domestically (US). Data traffic is collected daily by sample polling the interface from backbone to edge routers every five minutes. The Mbps are converted into total TB by using the binary conversion factor (1TB = 10244 bytes). Wireline Business International Public Internet Protocol (IP): This network includes enterprise and residential public wireline services in Latin America, Asia, Europe, Canada and Mexico. Data traffic is measured in megabits per second (Mbps) as the average of ingress and egress from backbone to edge routers internationally (Latin America, Asia, Europe, Canada and Mexico). Data traffic is collected daily by sample polling the interface from backbone to edge routers every five minutes. The Mbps are converted into total TB by using the binary conversion factor (1TB = 10244 bytes). Wireline Business Transport: This network consists primarily of point to point data transport services sold to customers as defined by circuit and speed, typically medium to large businesses globally. (Out of Franchise Legacy VZB network) Data traffic is measured in billed bandwidth (gigabits/second) to customers. For 2019, data traffic was reported based on the inputs and data available from the monthly volume reports. These reports are pulled on approximately the second week of the following month. 100% utilization is assumed over each circuit. The product categories included are the following: core synchronous optical networking (SONET), core time division multiplexing (TDM), strategic SONET and strategic wave. Gigabits/second are converted into total TB by using the binary conversion factor (1TB = 1024 gigabytes). Wireline Business Private Internet Protocol (PIP): This network provides voice, data and video applications over an integrated network infrastructure. It offers e- commerce, voice over IP (VoIP), converged solutions, shared intranets and extranets to private businesses globally. Data traffic is measured in Bps for all ingress data transferred across all PIP edge routers. Data traffic is collected daily by polling the network every 15 minutes. Data traffic is added for the day and averaged for the month. The Bps are converted into total TB by using the binary conversion factor (1TB = 10244 bytes), bytes being the total ingress octets for the month. Wireline Business Voice: Includes competitive local exchange carrier (CLEC), long-distance and international networks. Data traffic is measured in minutes of usage (MOUs) for all calls originating in Verizon's Business network (VZB), transit calls that do not originate or terminate on the VZB network, and calls terminating in the VZB network that originated outside the VZB network for competitive local exchange carrier (CLEC), long-distance and international services. MOUs are captured hourly through all US class 5 and 3 switches. The voice channels transporting this data have a maximum circuit capacity (or bandwidth rate) of 64,000 bps. MOUs are converted into bps by multiplying total MOUs by 60 seconds per minute and by 64,000 bps. Bits are converted into Bps by dividing the bps by 8 bits. The Bps are converted into total TB by using the binary conversion factor (1TB = 10244 bytes). Wireline Business Converged Packet Access (CPA): This network converges multiple services, IP, Ethernet, private line data and voice, over a single Ethernet interface. This network can deliver Ethernet access in bandwidth speeds ranging from 1 Mbps to 10 Gbps in various bandwidth increments. Data traffic is measured in Bps as the average of ingress and egress data transferred across all CPA edge routers. Data traffic is collected daily by polling every edge router every 15 minutes. Data traffic is added for the day and averaged for the month. The Bps are converted into total TB by using the binary conversion factor (1TB = 10244 bytes). Carbon intensity Verizon's carbon intensity metric is calculated as scope 1 and 2 GHG emissions measured in MT of CO2e per TB of network traffic. Water withdrawal Water withdrawal (in billions of gallons) is based on criteria established by the Global Reporting Initiative Standard 303-3, total volume of water withdrawn from municipal water utilities1 for all sites that use municipal water1 within Verizon's operational control. The amounts have been prepared based on: · Pro-rated monthly domestic and international billed consumption data for the year ended December 31, 2019 received from utility providers and property management companies as of April 2020. · Estimated usage calculated by applying Verizon's water usage intensity (WUI) factors (in kgal per square foot), by region (US state averages and US total average) and facility type, to sites2 without billed data available. The WUI factors are derived from billed consumption and square footage data available from comparable US sites.3 o For US sites without billed data, the state average WUI factors by facility type are applied when available. Otherwise, the US average WUI factors by facility type are used. o For international sites without billed data, the US average WUI factor by facility type is applied. o For sites without billed data and unknown square footage, estimated square footage is calculated based on known square footage from similar facility types. The WUI factors are then applied as described above. Note on Non-Financial Reporting Non-financial information is subject to measurement uncertainties resulting from limitations inherent in the nature and the methods used for determining such data. The selection of different but acceptable measurement techniques can result in materially different measurements. The precision of different measurement techniques may also vary. 1 Does not include surface, ground or rain water. 2 Sites that use water (e.g., administrative offices, retail stores, data centers, central offices, equipment, garage and warehouses and motor vehicle maintenance centers) are included. Sites that do not routinely use water (e.g., network cabinets and huts, microwave equipment, towers and antennas) are excluded from the estimate. 3 Sites with billed consumption but unknown square footage data are excluded from the WUI calculation.PDF-XChange Standard (8.0 build 339) [GDI] [Windows 10 Enterprise x64 (Build 17763)]