In a bid to strengthen climate-related transparency, the International Public Sector Accounting Standards Board® (IPSASB®), with support from The World Bank, has introduced the world’s first climate disclosure standard tailored specifically for governments. Released today for public comment, the Sustainability Reporting Standard (SRS ED 1) draft provides guidance to enhance climate-related financial reporting across the public sector.
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 behaviours across entire economies.”
He added, “Public sector finances are already stretched following the pandemic, so while stronger public financial management can release some of the resources required, the capital markets will need to fill the gap. With sovereign bonds already making up almost 40% of the $100 trillion global bond market in 2022, IPSASB’s proposed standard on climate-related disclosures will help governments provide consistent, comparable, and verifiable information and will ultimately help them maintain access to capital markets.”
To promote global consistency and comparability, SRS ED 1, Climate-related Disclosures proposes public sector specific guidance which builds on the International Sustainability Standards Board (ISSB) global baseline. In doing so, SRS ED 1 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, “The public sector is a major component of global capital markets so ensuring public sector organisations disclose high quality, comparable sustainability information is important to meet the information needs of investors. 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.”
The IPSASB invites input from all stakeholders—public sector preparers, regional and national reporting standard setters, accountants, and the broader public—by 28 February 2025, to refine the final standard. An online launch event on 13 November 2024 will further explore the significance of the new standard and its role in public sector leadership on climate reporting.
