A Sustainability Communications Checklist for the New Era of Disclosure

A whole raft of new ESG disclosure requirements – from WGEA reporting expansion to mandatory climate-related financial disclosures – are being introduced in 2024, with even more on the horizon. 

Tackling the disclosure challenge 

In the rush to meet the proposed requirements, many organisational functions are already feeling stretched by the task at hand. Taking climate-related financial disclosures as one example, the challenge of capturing relevant data across a whole range of climate risks and associated financial impacts is one of the biggest shifts in corporate reporting seen this century.

As new layers of ESG disclosure requirements come on stream in the coming months and years, the complexity and momentum is increasing and so is the pressure on companies to prepare for this dynamic and demanding reporting landscape. 

In our Discussion Paper: How to Thrive in the New Era of ESG Disclosure we offer insights and advice to help companies navigate their reporting journey for the next 18 months and beyond.

To develop this step-by-step guide, we’ve drawn on our expertise and working practice across Edge Impact to call out the strategy and steps, resources and knowledge it will take to achieve compliance and realise the potential advantages of embedding sustainability into business practices and decision-making.

Stepping up to this challenge makes new demands for organisations at every level – for directors, executives and employees and across operations, legal, risk and finance and more. These people and functions will have their work cut out to ensure data is captured, collated, verified and assured for new reporting standards to be met with accuracy.

Reassuring boards with a rigorous approach 

At the board level, concern about accuracy and risk – in both sustainability data and storytelling – is at code red level.

When this risk averse stance results in a paring back of both ambition and communication on sustainability, this sets up a significant challenge for executives and teams looking to implement the strategies that will make positive impact possible. 

To bring the rigour to match this zero-tolerance stance on missteps in risk and sustainability, Edge has a wealth of experience in taking clients on a journey towards maturity across their sustainability strategy, initiatives and reporting.

Our expertise in helping organisations incorporate science-based frameworks and metrics into strategic objectives, reporting and broader communications on sustainability, sets them up for success when they come to present their sustainability ambitions, performance and narrative to a board who are understandably wary of their liability for unfounded sustainability claims.

Closing the communications gap 

In the flurry of activity that reporting demands, the communications effort needed to land the output favourably with stakeholders is often left to the last minute – rather like icing on a cake that’s taken months to bake because you had to build the kitchen and grow the ingredients.  Or it can be vetoed by board members due to their perception of risks involved in saying more than is strictly required by legislation. 

And yet this part of the reporting process represents an opportunity for organisations to reinforce or even enhance their market position as an authentic and responsible voice in the sustainability conversation. 

In addition to covering what this communications effort might entail in the handbook, we’ve put together this checklist to help organisations get set up for an approach to reporting – and sustainability communications more broadly – that keeps the opportunities front and centre without losing sight of risks.

Consider your audience 

With sustainability reporting speeding to the top of the corporate agenda, boards and investors are likely to dominate when it comes to audience considerations. These specialist audiences are very clear on the data they’re looking for to tell them how a company is tracking on critical sustainability goals that could impact their risk profile and financial outcomes.  

Generalist audiences – employees, customers, suppliers and communities – are looking to the same report for the vision and story that bring the data and overall sustainability scorecard to life.

Ask yourself if a pared back narrative will engage this generalist audience and help them understand where sustainability sits in relation to company values and other strategic priorities. Put as much effort into telling a compelling story as you have for the evidence to back it up and you’ll have a set of sustainability messages with much broader application from an audience perspective.

Be clear on commitment, progress and action 

Verified data on impacts is essential for mapping the past and forecasting the future.

This couldn’t be more important in the sustainability context as it sets organisations up for selecting strategic priorities that ladder up to targets for reducing negative impacts.

For construction giant Boral, an ASX-listed company, setting a specific target for Scope 1 and 3 emissions reduction in 2019 left them with a risk exposure to manage when it became clear their ambitions were not aligned with progress.

In a media release from 23 October 2023, the company went public with a reduction in their 2025 emissions target from 18 percent to 12-14 percent. Along with abundant proof points supporting their strategic approach to emissions reduction, this communication sends a clear message that their directors take seriously their responsibility to set targets based on the investments and initiatives that make progress possible.

With their Board commitment to ‘carefully review targets before they are set as well ensuring there is a sound, achievable basis for our targets’ Boral is speaking with confidence on their ability to meet expectations of investors and regulators under the new reporting regime.

When challenges present, call out the opportunity 

At a time when use of carbon offsets has been hotly debated in sustainability circles and the media, many companies have been unsure how to navigate – and communicate - their position on climate-related targets. In their statement on where they’re heading on emissions reduction, media company JC Decaux have turned their new direction into a compelling soundbite.  

This is a fine example of turning a challenge into an opportunity. By going out with a strong position – and a chosen vendor for providing transparency on their emissions – they’re taking a leadership role as sustainability advocates for their industry. 

Anchor sustainability to brand and values 

As a brand that’s all about the benefits of innovation, Lego has long been a voice in the sustainability conversation. Having made some big bets on increasing recycled materials in their products, they’ve had to back down on their expected pathway to sustainable products and cutting emissions.  

When they discovered their rPET solution wouldn’t help their carbon footprint they took the hit and walked away, acknowledging that being innovative sometimes means making mistakes. 

It’s a message that’s right on target for their brand – staying true to their sustainability commitments means admitting when they’ve got it wrong so they can work on finding a better solution.

Set the scene to limit surprises 

Ambitions on corporate climate action are growing ever higher.

91% of global GDP is now captured by national government net-zero targets, up from 68% in December 2020.​ But for a lot of companies, their goals are unrealistic, according to reports that 93% of the world’s largest companies will fail to reach their net zero targets. 

In light of this, it’s essential for companies to consider how to prepare their case for a change in their forecast, or results that don’t live up to expectations.

As these examples have shown, there are communication strategies that can help these surprises become part of an authentic and cohesive narrative.

But this takes preparation and consideration of brand, audience and context as strategic inputs.

It means making communication central to your sustainability resourcing and reporting at every step.