IPSASB Sets Global Baseline for Public Sector Climate Reporting With New Disclosure Standard

The International Public Sector Accounting Standards Board has released its first climate-focused sustainability reporting standard, marking a significant step toward formalizing how governments and public sector entities disclose climate-related risks and opportunities. The new framework, titled IPSASB SRS 1, Climate-related Disclosures, establishes a common structure for public sector climate reporting at a time when fiscal resilience, infrastructure planning, and climate adaptation are becoming central to public financial management.

The standard positions climate disclosure as a core governance and financial issue for governments, rather than a voluntary transparency exercise. It reflects growing recognition that public sector balance sheets, service delivery, and long-term fiscal sustainability are increasingly exposed to climate-related risks.

 

From Concept to Standard: Building Public Sector Climate Disclosure

 

The development of the standard followed a request in 2022 from the World Bank, which called on the International Public Sector Accounting Standards Board to lead the creation of sustainability reporting guidance tailored to public entities. Subsequent consultations revealed strong demand from governments and public institutions for a consistent approach to climate disclosure that reflects public sector mandates and accountability structures.

After publishing an initial exposure draft in 2024, IPSASB incorporated feedback from stakeholders across jurisdictions. One of the most notable changes in the final standard was the decision to exclude detailed disclosure requirements on public policy programs and their outcomes. Instead, the current standard concentrates on the climate risks and opportunities linked directly to an entity’s own operations. IPSASB has indicated that policy program disclosures will be addressed in a future phase.

 

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Alignment With Global Climate Reporting Architecture

 

IPSASB SRS 1 is closely aligned with existing private sector climate reporting frameworks, particularly the International Sustainability Standards Board climate standard IFRS S2. The public sector standard mirrors IFRS S2’s overall structure, organizing disclosures around four core pillars: governance, strategy, risk management, and metrics and targets.

This alignment is intended to support comparability across public and private sectors while adapting the language and emphasis to public sector realities. Unlike IFRS S2, which is designed primarily for investor decision-making, the IPSASB standard is framed to meet the broader information needs of citizens, legislators, lenders, and development partners.

 

What Governments Are Expected to Disclose

 

Under the new standard, public sector entities are required to explain how climate-related risks and opportunities are overseen and managed at the governance level, including roles and responsibilities. They must also describe how climate considerations are integrated into strategy, decision-making, and financial planning, including assessments of resilience and the use of scenario analysis.

Risk management disclosures focus on how entities identify, assess, prioritize, and monitor climate-related risks and opportunities over time. On the metrics side, entities are expected to report greenhouse gas emissions across Scopes 1, 2, and 3, using the GHG Protocol unless they apply a defined rebuttable presumption to use another established methodology. Additional climate-related metrics and targets relevant to public sector operations are also included.

 

Transition Reliefs and Phased Implementation

 

Recognizing capacity constraints across jurisdictions, IPSASB has introduced several transition reliefs. Public sector entities are permitted to defer Scope 3 emissions disclosures for the first three annual reporting periods. In addition, first-time adopters are not required to provide comparative information and may publish climate disclosures after their financial statements during the initial reporting year.

These provisions are designed to encourage early adoption while giving governments time to build data systems and internal expertise.

 

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Climate Disclosure as a Public Finance Tool

 

Commenting on the launch, IPSASB Chair Thomas Müller-Marqués Berger emphasized the role of climate information in strengthening public financial management. He noted that government decisions shape economic outcomes across sectors, and that clearer visibility into climate-related risks and opportunities can support access to capital markets and help mobilize financing for climate resilience.

The release of IPSASB SRS 1 signals a broader shift in how climate risk is treated in the public sector. Climate disclosure is moving from environmental reporting into the core of fiscal planning, debt management, and infrastructure investment decisions. As adoption spreads, the standard is likely to influence how governments assess long-term liabilities, prioritize capital spending, and engage with investors and development institutions on climate finance.

For policymakers, auditors, and public finance leaders, the new standard establishes a shared language for climate risk that aligns with global reporting norms while reflecting the unique responsibilities of the public sector. Over time, it may become a foundational tool for integrating climate considerations into public budgeting, accountability, and economic resilience planning.