The International Public Sector Accounting Standards Board (IPSASB) announced the release of SRS ED 1, a new draft climate-related disclosure standard for governments and other private sector entities, which would be the first sustainability reporting standard for the public sector.

The new standard is being developed with the support of The World Bank, which called on IPSASB in 2022 to lead a process aimed at gaining support for the development of public sector-specific sustainability reporting guidance. Following the request, IPSASB issued a consultation paper to evaluate demand, with respondents indicating an urgent need for public sector sustainability reporting standards.

After considering three potential sustainability reporting projects, including general requirements for disclosure of sustainability-related financial information, climate-related disclosures, and natural resources non-financial disclosures, IPSASB announced in 2023 that it would begin development of the climate-reporting standard, citing the urgent need to address climate change, and the ability to build the standard off existing resources such as the IFRS S2 Climate-related Disclosures standard and GRI climate-related topic standards.

Ian Carruthers, IPSASB Chair, said:

“The rapid progress needed to address climate change requires public sector action. The scale of the investment involved and the need for coordinated action across all sectors of the economy mean that only governments are equipped to lead the changes required. Using policy tools, such as taxation, regulation, and subsidies, governments can influence behaviors across entire economies.”

The organization added that the new standard proposes specific guidance which builds on the global baseline of the IFRS Foundation’s International Sustainability Standards Board (ISSB), noting that the draft standard proposes principles for the more limited group of public sector entities that have responsibility for climate-related public policy programs and their outcomes.

Sue Lloyd, ISSB Vice-Chair, said:

“By building on the ISSB’s global baseline ꟷ which is being adopted by jurisdictions around the world ꟷ IPSASB is bringing the public sector into the global sustainability reporting ecosystem. Consistency in disclosure requirements will help support comparability across sectors and is essential to driving an efficient corporate reporting system, reducing complexity and fragmentation that could undermine the usefulness of sustainability information in investor decision-making.”

With the release of the draft, IPSASB is opening the proposed standard for public comment until February 28 2025, with feedback requested from public sector stakeholders, including preparers of public sector climate-related and other sustainability reports, regional and national sustainability reporting standard setters, professional accountants, sustainability assurance providers, and interested members of the public.

Click here to access the draft standard.