Australia’s mandatory climate reporting framework is now in place, and the first annual reports prepared under the new requirements are being published. These reports use a variety of methods to clearly communicate complex climate-related information.
What are the new sustainability reporting requirements?
Under the national Corporations Act 2001 (Cth), reporting entities must now release annual sustainability reports at the same time as they issue financial reports.
The Australian Sustainability Reporting Standards set out the requirements for sustainability- and climate-related financial disclosures for sustainability reports and general-purpose financial reports.
The Australian Securities and Investments Commission monitors compliance and provides guidance and resources for organisations preparing a sustainability report.
Entities must disclose their greenhouse gas emissions, along with information about their climate-related risks and opportunities, governance, targets and strategy. This reporting gives stakeholders insight into how an organisation is responding to climate issues and managing its impacts. It also offers marketing benefits to the reporting company by demonstrating its commitments to and progress towards sustainability.
However, meeting the requirements is only one part of the challenge. The reports must also be useful and understandable to stakeholders. This is where good writing matters. Accessibility, clarity and an easy-to-navigate structure make it much easier for readers to understand this complex information.
Recently published reports from retail giant Woolworths Group, Commonwealth Bank and energy company Santos, as a selection of cross-sector examples, provide useful examples of best practices you can draw on when developing your own reports.
What’s the best way to highlight key climate information?
Reports typically start with a positive message from the CEO about why climate matters to the organisation and then dive into the greatest risks and opportunities the organisation faces – and how management is responding. Those risks and opportunities aren’t always obvious.
For example, you might be surprised to learn that only 4% of Woolworths Group’s reported emissions are produced by its direct operations, while 96% are Scope 3 emissions: the results of suppliers’ activities in forest, land and agricultural management; energy use; packaging; transportation; and waste production. Rather than leaving readers to find that figure in a dense table, Woolworths highlights it with a clear infographic and then guides readers through its action strategy.
This is a useful example of how clear presentation can help readers understand the scale and significance of an issue before moving into the details.
How can companies simplify complex climate disclosures?
Mandatory climate reporting requires organisations to present large amounts of information. A clear structure helps readers find and understand the information they need.
Commonwealth Bank uses clear section headings, tables and charts to organise its climate disclosures. For instance, its presentation of emissions intensity data across the sectors it supports makes it easy for readers to see current performance and the trajectory towards June 2030 targets.
Climate reporting involves a range of specialised terms, assumptions and methodologies. It’s important to explain technical strategies and technologies in plain English, with clear definitions and concrete descriptions. This helps an organisation’s investors and other stakeholders understand these concepts and how they relate to its climate strategy.
Oil and gas company Santos uses plain English to explain the engineering complexities of carbon capture and storage, direct air capture, low-emissions fuels and other tricky terms. A glossary can also help readers understand unfamiliar terminology.
What makes a sustainability report clear and credible?
These reports provide useful models for organisations preparing their own mandatory disclosures. They take different approaches to meeting the same requirements, but they share some basic characteristics:
- a logical structure aligned with reporting requirements
- a clear information hierarchy
- clear, jargon-free text that makes complex information easy to understand
- visual aids such as charts, tables and infographics to make it easier for readers to interpret sustainability data.
Ultimately, effective sustainability reports do more than present a complex set of numbers. They explain what the numbers mean, why they matter and how the organisation is responding to them in a way that complies with government requirements and supports its brand.
Editor Group writes, edits and proofreads annual and sustainability reports for a wide range of listed companies, private businesses, not-for-profit organisations and government agencies, helping them to communicate their performance in clear and compelling ways.
Learn about how we can help with your next sustainability or annual report or get in touch to discuss your requirements.
