IPSASB Develops Climate Disclosure Standards for the Public Sector.
With Sustainability and ESG disclosures becoming more and more prevalent across the world, the public sector is now seeing its first climate-related disclosure standard for governments and other private sector entities. The International Public Sector Accounting Standards Board (IPSASB) has taken a proactive step towards developing a climate-related reporting standard specifically tailored for the public sector.
IPSASB's Climate-Related Reporting Standard:
IPSASB, in collaboration with the International Federation of Accountants (IFAC) and the CDP (Carbon Disclosure Project), has started creating a reporting standard for the public sector. Like many of the standards we are seeing, this standard aims to provide guidance to governments and public sector entities on disclosing climate-related information in a transparent and consistent manner. Transparency and consistency are key in ESG and sustainability disclosures and we see this effort in other standards such as CSRD and the SEC regulations. The IPSABS’s reporting standard’s main objective is to assist public sector organizations in effectively assessing and communicating their climate-related risks and opportunities, thereby supporting global sustainability efforts.
IPSASB's Consultation on Sustainability Reporting:
IPSASB has launched a global consultation to gather insights and feedback from key stakeholders regarding sustainability reporting in the public sector. The consultation paper explores the potential development of a comprehensive sustainability reporting standard, taking into account the unique characteristics and needs of public sector entities. Stakeholders are encouraged to provide their input on key topics such as the scope, objective, content, and implementation considerations of the sustainability reporting standard.
Within the consultation paper, the IPSASB presents the following proposals:
IPSASB will become the standard or leader for global public sector-specific sustainability reporting guidance, leveraging its extensive experience, established processes, and broad international relationships.
Develop initial guidance with a focused approach on two key areas: general disclosure requirements for sustainability-related information and climate-related disclosures. This guidance will build upon the preliminary efforts of the newly formed International Sustainability Standards Board, ensuring alignment and consistency.
Adopt an accelerated timeline for the development of guidance, aiming to potentially release initial guidance by the end of 2023. This proactive approach demonstrates the IPSASB's commitment to expeditiously advancing the field of sustainability reporting in the public sector, enabling timely and meaningful progress.
Significance and Stakeholder Participation:
Sustainability reporting is increasingly important for public sector entities as they play a vital role in addressing ESG issues. The hope is that with the creation of reporting standards, perhaps the public sector will make moves toward addressing other ESG and sustainability projects in this sector. The IPSASB consultation seeks participation from various stakeholders, including governments, public sector entities, professional bodies, and the general public, ensuring a broad and diverse range of perspectives. The insights gathered from stakeholders will shape the development of an internationally consistent and robust sustainability reporting standard for the public sector. According to the IPSASB, the consultation paper respondents indicated an urgent need for public sector sustainability reporting standards.
IPSASB Chair Ian Carruthers comments, "The development of a climate-related reporting standard for the public sector and the global consultation on sustainability reporting reflect our commitment to enhancing transparency and accountability in the public sector's contribution to sustainable development."
Being the first of it’s kind in the public sector, this represents a huge step in terms of ESG. The IPSASB is ultimately hoping to create a climate-related reporting standard and to engage in a global consultation on sustainability reporting that will highlight the importance of ESG considerations in the public sector. Establishing a comprehensive standard and incorporating stakeholder perspectives, will create a transparent channel of communication for public sector entities' sustainability efforts, fostering sustainable development on a global scale.
Photo by UX Indonesia on Unsplash
Sources:
"IPSASB Consultation Paper on Sustainability Reporting." IAS Plus. Retrieved from: https://www.iasplus.com/en/news/2022/05/ipsasb-sustainability
"Advancing Public Sector Sustainability Reporting: IPSASB Launches Global Consultation." IPSASB. Retrieved from: https://www.ipsasb.org/news-events/2022-05/advancing-public-sector-sustainability-reporting-ipsasb-launches-global-consultation
"IPSASB Launches Development of Climate-Related Reporting Standard for Public Sector." ESG Today. Retrieved from: https://www.esgtoday.com/ipsasb-launches-development-of-climate-related-reporting-standard-for-public-sector/
