Atlassian has brought its net zero commitment forward to 2040 after recording a 34% rise in Q1 revenue

Atlassian has brought its net zero commitment forward to 2040 after recording a 34% rise in Q1 revenue
  • Atlassian booked first-quarter revenue of $614 million, up 34% on the $459.5 million they pocketed last year.
  • CEOs Mike Cannon-Brookes and Scott Farquhar announced that the company will bring forward its net zero commitment from 2050 to 2040, two years after moving their offices to 100% renewable energy.
  • To reach its net zero ambitions, though, CEO Mike Cannon-Brookes said the firm will need to do more than focus solely on renewable energy. 
  • Visit Business Insider Australia’s homepage for more stories.

In a letter to shareholders on Friday, Atlassian co-CEOs Mike Cannon-Brookes and Scott Farquhar brought the company’s net zero ambitions forward from 2050 to 2040, after recording a 34% first-quarter revenue lift.

The software giant, known best for its project management software Jira, booked $614 million in revenue through the first quarter of the 2022 financial year, up 34% on the $459.5 million they pocketed in the first quarter of last financial year. 

Most of that revenue came from growth across its corporate customer base — the company doesn’t count “single user customers” — which expanded to 216,500 customers over the last three months, as 11,746 new businesses signed up on either a subscription or “maintenance agreement”. 

Cannon-Brookes and Farquhar said a large portion of their new customers came to them from other platforms, driving growth of 53% across the company’s cloud offering which they said was helped by a steady uptick in the adoption of its “premium” products. 

“All that said, migrating our server customer is a multi-year journey, with much of it still ahead of us,” the CEOs wrote. “To help smooth the way, we consolidated all our migration content in our updated Atlassian Migration Center this quarter.”

“This hub serves as customers’ one-stop shop, providing clear steps for progressing through each phase,” they said. “Our original Migration Center generated thousands of cloud migration trials in FY21, and we’re excited to watch the updated version build on that success.”

Beyond detailing revenue and flaunting various corporate achievements, the duo’s quarterly earnings report also set an ambitious new net-zero commitment, detailed in the release of a new sustainability report. 

Atlassian, which has been running on 100% renewable energy since the start of the 2020 financial year, will look to reach net zero by 2040 instead of its earlier target of 2050

“The risks posed by climate change and structural inequalities are risks to Atlassian’s business, to say nothing of our customers’, employees’, and community stakeholders’ well-being,” Cannon-Brookes and Farquhar wrote.

“Earlier this month, we released our third annual Sustainability Report detailing our progress in four focus areas,” they said. 

“We’re making great progress when it comes to reducing emissions, protecting customer privacy, and our philanthropic programs run by the Atlassian Foundation.”

The company’s exclusive shift to renewable energy was just one of those four focus areas, while a culture focused on “inclusion” and diversity is another, along with privacy commitments and a “community” approach to philanthropy geared toward “social impact”. 

To reach its net zero ambitions, though, Cannon-Brookes said the firm will need to do more than focus solely on renewable energy. 

“This year we built on that with an increasingly data-driven approach to climate mitigation, steps to integrate human rights within Atlassian, and a full 10-point increase in volunteer participation,” Cannon-Brookes said. 

“That’s not to say we’re nailing it on all fronts,” he said. “As we mentioned in the last report, we still have lots of work ahead of us in the area of diversity, equity, and inclusion (DEI).”

“While we’ve always believed in the importance of the work, this year we learned that we had a long way to go to make our actions live up to our words,” he said. 

“So, we approached FY21 as a ‘rebuilding year’. We slowed down some of our outward-facing work so we could invest in research, planning, and staffing that will set us up to move faster toward our DEI goals and the kind of company we want to be in FY22 and beyond.”

The company has also revised its DEI strategy to include external audit and assessment infrastructure to keep them accountable. According to the report, the software giant brought in consulting firm Trusaic to undertake an audit of its DEI commitments through 2021.

The audit’s findings haven’t yet been published, but the firm says it will reassess its strategies and redesign them if required. 

Australian companies lag on ESG

Australia’s largest companies have continued to lag on environmental, social, and corporate Governance (ESG) in recent years, with most falling far short of offering the resources made available by Atlassian to its staff and shareholders to help them quantify their commitments.

Recent analysis of Australia’s ASX200 companies conducted by consulting firm PwC found that while 87% of the top 200 firms undertook “meaningful ESG reporting” over the last year, as many as 62% of them failed to make details related to their “short, medium and long-term goals” publicly available. 

Matthew Lunn, ESG assurance lead at PwC Australia, said the Australian market has seen notable cosmetic improvements, but critical areas continue to go unaddressed. 

“We’re witnessing enormous investor-driven demand for information about a company’s commitment to ESG activities, which provides a significant opportunity to impress capital markets and reap the rewards of doing so by clearly demonstrating goals and commitments,” Lunn said.

“But while we’ve seen improvement in 2021, there’s a long way to go. A strategy without a plan, a timeframe and measurable targets to be held accountable against is not a strategy, but merely a statement of ambition.

PwC found that only 36% of ASX200 companies have some semblance of a net zero target, while just 4% have spoken about carbon-negative plans and goals. 

Meanwhile, some 66% of these companies don’t have their ESG reporting externally assured, leaving no way of knowing whether commitments can even be achieved. 

The firm’s research found that despite the limited ESG efforts launched by Australia’s largest companies, the expectations of investors continue to outpace them.