IPSASB SRS ED1: Key Consultation Insights on Climate-Related Disclosures in the Public Sector
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Climate change creates significant risks for governments and public sector entities. High-quality climate-related disclosures help investors, citizens, oversight bodies and other stakeholders make informed decisions, while supporting sound financial management and public accountability.
The International Public Sector Accounting Standards Board (IPSASB) sought public feedback through SRS ED1 on the development of climate-related disclosure standards for the public sector. Experts and stakeholders from around the world participated in the consultation process.
Two Reporting Perspectives
The proposed standard initially considered climate-related information from two perspectives:
1. Own Operations
This perspective focuses on how public sector entities identify and manage climate-related risks arising from their day-to-day operations.
2. Public Policy Programmes
This perspective focuses on government policies and public programmes designed to respond to climate change.
Feedback from the public consultation indicated that these two perspectives involve different objectives and information needs. In response, IPSASB decided to address them through two separate standards to improve clarity and usability.
Alignment with Global Standards
The proposed requirements are aligned with IFRS S2 Climate-related Disclosures, while being adapted to reflect the specific role and responsibilities of public sector entities.
The framework is built around four key pillars:
Governance;
Strategy;
Risk management; and
Metrics and targets.
This alignment supports greater consistency and comparability in climate-related reporting while recognising the different circumstances of public sector organisations.
Materiality: What Information Should Be Reported?
The consultation summary describes material information as information that could influence:
Accountability; or
Decision-making.
Respondents suggested that additional guidance would be helpful in applying this concept, particularly in the public sector context.
IPSASB acknowledged the need for further support and agreed that more guidance should be developed to help entities determine which climate-related information is material and should be disclosed.
Timing and Location of Reporting
Climate-related disclosures should generally be published at the same time as the financial statements. This enables users to assess financial and climate-related information together and improves comparability.
However, flexibility is proposed for the first year of application. Entities would have a nine-month reporting window to publish climate-related information after the financial statements have been issued.
This transitional flexibility is intended to give public sector entities sufficient time to develop the necessary systems, processes and data collection capabilities.
Use of the Greenhouse Gas Protocol
Entities are encouraged to use the Greenhouse Gas Protocol (GHG Protocol) to measure and report greenhouse gas emissions.
However, another measurement method may be used where:
It is required by applicable laws or regulations; or
It provides more relevant and reliable information for the entity’s circumstances.
This approach seeks to balance global consistency with the legal, regulatory and operational requirements of different jurisdictions.
Scope 3 Greenhouse Gas Emissions
Public sector entities would be required to report Scope 3 greenhouse gas emissions, which are indirect emissions arising from activities across an entity’s value chain.
Scope 3 reporting can be challenging because the required information may involve:
Suppliers;
Contractors;
Service providers; and
Other organisations outside the entity’s direct control.
To address these practical challenges, a three-year transition period is proposed before the Scope 3 reporting requirement becomes applicable.
Why Does This Matter?
Climate-related disclosures are important because they help users understand:
How public sector entities are exposed to climate-related risks;
How governments are responding through policies and programmes;
How climate issues may affect public finances and service delivery; and
Whether public sector entities have effective governance, strategies, risk management processes and performance targets.
Transparent reporting supports stronger accountability, better risk management and more sustainable public-sector decision-making.
The IPSASB consultation on SRS ED1 highlights the need for climate-related reporting that is globally comparable, practical for public sector entities and relevant to accountability and decision-making.
