Document ID: chunk:federal_register_of_legislation:F2025L00107:front:0:p139
Version: federal_register_of_legislation:F2025L00107
Segment Type: other
Provision Reference: 
Character Range: 437194–440383

for example, the entity may be developing and improving its process to prepare the sustainability information and the entity-developed criteria may have been changed to reflect more appropriate or modern approaches, data or methods.

           * The basis for the change is sufficiently disclosed and explained in the sustainability information.

           * The criteria are different from those commonly used in the entity's industry or sector, as this may be an indicator of management bias.

           * The change results in information that is always positive (e.g., management changes the criteria year on year so that the outcome looks more positive).

Understandability of the Criteria (Ref: Para. 78(c)(v), 107)

 1.       In evaluating whether the criteria are understandable, the practitioner may consider whether the criteria:

           * Are clear and unambiguous.

           * Will enable the intended users to identify readily the main points being made and to infer appropriately whether they affect their decision-making.

           * Will result in a presentation that does not obscure relevant information.

           * Will result in clear presentation of the sustainability information in a way that effectively summarises and draws attention to key features of the information reported.

           * Will result in the sustainability information being coherent, easy to follow, clear and logical.

           * Will result in sustainability information that can be readily located, for example, the information may be difficult to locate if it is spread across different reports, webpages or included by reference.

           * Will result in sustainability information that is appropriately balanced between conciseness to be understandable and relevance.

           * Will result in logical and comparable time periods, whether those be:

                   + A point in time (e.g., for description or implementation of a process not covering the period).

                   + Periods that have ended (e.g., for historical information).

                   + Periods that end in the future (e.g., for strategy, targets or commitments).

Understanding the Entity's Reporting Policies (Ref: Para. 108–109)

 1.       Reporting policies are the bases, conventions, rules and practices applied by an entity in preparing and presenting the sustainability information. The entity's reporting policies are not criteria by themselves, but assist the entity in complying with the applicable criteria. The criteria need to encompass sufficient principles as the basis for the entity to select and apply reporting policies that are consistent with the underlying concepts in, and meet the objectives of, the requirements of the criteria, as explained in paragraph A2. If the existing criteria do not provide sufficient principles for the entity to select and apply reporting policies, criteria from another framework may need to be identified or entity-developed criteria may need to be developed. Matters that the practitioner may consider when obtaining an understanding of the entity's selection and application of reporting policies, including any changes and