The International Public Sector Accounting Standards Board (IPSASB) has declared the development of a new climate-related disclosure standard.
According to IPSASB, the launch marks the first sustainability reporting standard specifically for public entities.
The development of this new standard is a response to an increasing demand for sustainability reporting in the public sector. The push for these guidelines has been driven by stakeholder calls, an urgent need recognised by consultation paper respondents, and the IPSASB’s commitment to address ESG topics, amongst other factors.
IPSASB focuses on the development and maintenance of high-quality international public sector accounting standards (IPSASs). These standards enhance the quality and transparency of public sector financial reporting around the globe. The entity ensures this by continuously working on setting and improving these standards in line with the changing global landscape.
The newly announced standard addresses climate-related disclosures, designed to standardise the reporting of climate-related impacts and risks across the public sector. This encompasses the public entities’ climate-related effects on the economy, environment and people, as well as their exposure to physical and transitional climate-related risks and opportunities.
The IPSASB has strategically prioritised this standard due to the urgency of addressing climate change and the feasibility of the project. The board plans to base this standard on existing and emerging resources such as the IFRS S2 Climate-related Disclosures standard and GRI climate-related topic standards.
Furthermore, IPSASB’s decision follows a call by the World Bank in January 2022 to spearhead the creation of public sector-specific sustainability reporting guidance. This was accompanied by a consultation paper issued by the IPSASB to assess demand and support for such an investment.
IPSASB Chair Ian Carruthers said, “The Board is delighted to be able to respond to stakeholder calls in this way and hopes to be able to initiate other projects in this critical area in the coming months.”
ISSB Chair Emmanuel Faber added, “IPSASB had been an observer on the Technical Readiness Working Group of the IFRS Foundation that established the foundations to our work back in 2021. I am thrilled about our collaboration since then, and that their project will build off from our International Sustainability Standards Board (ISSB) Climate Standard combined with Global Reporting Initiative (GRI), leveraging our cooperation agreement with the latter.”
The EU Commission recently unveiled a draft Delegated Act last Friday proposing alterations to the European Sustainability Reporting Standards (ESRS).
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