The International Public Sector Accounting Standards Board (IPSASB) has issued the draft of its first climate-related disclosure standard for governments, aiming to set the stage for greater accountability in addressing climate change across the public sector. The new Sustainability Reporting Standard (IPSASB SRS) is open for public comment until 28 February 2025, offering accountants and public finance professionals an opportunity to shape the final standard.

The IPSASB's draft highlights the pivotal role governments play in mitigating climate change by providing transparent, comparable, and verifiable climate-related information. IPSASB Chair, Ian Carruthers emphasised the role public sector leadership in addressing climate change, particularly given the scale of investments needed and the fact that public sector finances already stretched.

What public sector entities are the draft standard aiming at?

The draft standard is designed for public sector entities that:

• Deliver services to benefit the public or redistribute income and wealth;

• Mainly finance activities through taxes, government transfers, social contributions, debt, or fees; and

• Do not have a primary profit-making objective.

This includes entities such as national, regional, and local governments; government ministries, departments, boards, agencies; public sector social security funds; and international governmental organizations.

What is in the draft standard SRS?

The draft standard addresses the following disclosure requirements for public sector entities:

1. Climate-related Risks and Opportunities that affect their operations and the outcomes of their climate-related public policy programs.

2. Governance structures overseeing climate-related risks.

3. Strategies for entities to manage these risks, including current and future impacts on financial and operational plans.

4. Risk Management processes to identify and address climate-related risks and opportunities.

5. Metrics, such as greenhouse gas emissions, and Targets enabling reporting on expected progress.

The draft includes application guidance in three appendices:

• Appendix A1: Guidance for disclosing risks and opportunities related to the entity's own operations.

• Appendix A2: Guidance for entities responsible for climate-related public policy programs.

• Appendix B.AG: General requirements for applying climate-related disclosure principles.

Join the IPSASB Webinar and Provide Feedback

To facilitate a deeper understanding of the draft and its implications, IPSASB is hosting an online event on 13 November 2024, 14h00 UTC (16h00 SA time) featuring discussions with key leaders from IPSASB, ISSB, and IFAC. Register for the online launch event to learn more and engage in shaping this critical public sector standard.

Accountants from around the world are encouraged to review the draft and provide their comments. This is a unique opportunity to influence how public sector climate disclosures are shaped, contributing to more transparent governance and better climate accountability.

The Exposure Draft, "Climate-related Disclosures," and the “At a Glance” document can be downloaded from the IPSASB website.