This guidance is applicable to all central government departments, non-ministerial departments, agencies and non-departmental public bodies which produce annual reports and accounts (ARAs) in accordance with the Treasury‘s government financial reporting manual (FReM). They are required to report on sustainability, unless exempted from doing so.

The Treasury says organisations are strongly encouraged to demonstrate, through integrated reporting, how sustainability is an essential characteristic within strategic objectives, operations and policy making. It is also important to reflect what the risks are to achieving integration and how the risks are being managed. Additional context should be given to explain areas of particular focus and those which are the most material to the organisation.

The guidance includes details of minimum reporting requirements in each of the main reporting areas: greenhouse gas emissions; waste minimisation; finite resource consumption, biodiversity action planning; sustainable procurement; climate change adaptation; and sustainable construction.

Organisations should, wherever possible, make use of their normal accounting and environmental management systems to regularise the collection of such information throughout the year. This may require additions / changes to new or existing systems (e.g. fields to capture quantitative information, additional subjective codes in financial systems etc.) or processes.

All information included in sustainability reporting should conform to the normal public sector financial year of 1 April to 31 March (recognising that UK strategic carbon budgets are set by calendar year).

There is no prescribed proforma for reporting – organisations should develop their own format to fit their business but are reminded that integrated reporting is strongly encouraged. The reporting format should provide minimum information requirements (including nil returns) and comparisons of data for at least the previous three years (as it becomes available).

Reporting entities must include commentary explaining performance in terms of key performance indicators (KPIs), direct impacts and indirect impacts. This must discuss trends and the organisation‘s strategic role in improving performance. Where applicable, performance that contributes to one of the 17 sustainable development goals (SDGs) should be flagged.

The Treasury says the purpose of sustainability reporting is to provide transparency on public sector performance in organisations year-on-year. For this reason, it is important that the top level of organisations (generally departments) communicate clear accounting treatments or policy for areas in this guidance where discretion is given.

The key is ensuring that treatments are consistent within organisations and from year-to-year so that trends can be easily recognised and understood. Where inconsistencies within accounting boundaries or between different years exist, they should be explained.

Whilst external assurance and verification of reported figures is not required for sustainability reporting, it is important that all organisations have relevant audit or scrutiny arrangements to ensure that the correct procedures are in place to produce robust data on performance.

Public sector annual reports: sustainability reporting guidance 2017-18 is here.

Report by Pat Sweet