The IPSASB has issued a climate-related disclosure draft, titled SRS ED 1. This development will help governments and all the other public sector entities that are required to report on sustainability issues. This is an historic step because the sustainability standard for the public sector introduced here is its first in kind. This standard was supported by The World Bank, which requested IPSASB in 2022 to take a leading role in developing sector-specific guidelines for public sectors in sustainability. The demand created a consultation paper from respondents which stated the urgent and critical need for such standards.
After deliberating over three options of projects-including the general sustainability-related financial disclosures, natural resource non-financial disclosures and climate-related reporting-identified in 2023, the IPSASB finalized on the last one as the activity for priority consideration. While making this selection, the board cited compelling needs to consider climate change reporting, along with exploiting the frameworks developed currently, such as the IFRS S2 Climate-related Disclosures and GRI standards. The new draft standard supports the governments in driving changes necessary for combating climate change. The scale and urgency of the climate challenges demand that concerted action be implemented among economic sectors, with the understanding that governments, owing to their unique lead, should spearhead that by virtue of policies they would drive through taxation, regulation, or subsidies, explains IPSASB Chair Ian Carruthers
It has been based upon a global base line provided by International Sustainability Standards Board of IFRS Foundation. This guidance is targeted at public sector entities with climate-related public policy programs. “The approach of IPSASB is very important to me,” said ISSB Vice Chair Sue Lloyd. “Aligning the public sector standards with this global framework of the ISSB will enhance consistency across sectors. Such an alignment would promote comparability across sectors and streamline corporate and public reporting systems, thus easing complexities that could otherwise mitigate the value of sustainability information for investors.”.
The IPSASB is now inviting public comments on the Exposure Draft until February 28, 2025. The board welcomes all kinds of public sector stakeholders, such as report preparers, regional and national sustainability standard setters, professional accountants, providers of sustainability assurance, and the general public, to provide inputs. These comments will hone the standard to create a well-researched framework that will be able to drive meaningful climate-related disclosures in support of both accountability and global efforts to mitigate climate change.