On 16 September 2024, global experts discussed how to foster transparency, ensure better accountability, and provide the data needed for the public sector to play its role in ensuring sustainable public finances and a more sustainable planet at a joint IPSASB, IFAC, Accountancy Europe and European Commission conference in Brussels. Enhancing Public Sector Action Through Climate Reporting brought together over 100 participants for this interactive event.

enhancing public sector action through climate reporting

“As the world unites to combat climate change and preserve our planet, the public sector is needed to help ensure lasting change. The public sector holds unique levers—taxation, legislation, regulation, and subsidies—that are needed to change behaviors across the entire economy. There is no solution to addressing climate change that does not include public sector leadership,” said Ross Smith, Program and Technical Director at the IPSASB, in his opening remarks. 

Ross Smith

“And it is crucially important for the public sector to show leadership in taking forward climate-related initiatives and in reporting on climate,” Ross Smith added.  

Karen Leung, Manager at IPSASB presented an overview of the public sector proposals related to the IPSASB Sustainability Reporting StandardsTM (IPSASB SRSTM) Exposure Draft (SRS ED) 1, Climate-related Disclosures. 

better information

“It is essential that we ensure that public sector entities can provide appropriate information for primary users of the report to ensure transparency and accountability,” said Karen Leung. “This represents a significant opportunity for the public sector to strengthen its commitment to climate action.” 

An urgent need for global sustainability standards on climate reporting for the public sector

All speakers agreed that this is a very exciting time in climate reporting. The private sector has already made significant progress in its reporting and the capital markets are calling on entities to provide this information now. 

Lee White

Lee White, Chief Executive Officer of IFAC said: “Progress is happening at a rapid pace regarding Climate-related Disclosures in the public sector across the globe. And this is an incredibly important development because climate is a global issue and needs a global response. This is global transformation, and it is essential that governments and the public sector lead.” 

This was echoed by Lynn Pamment, Comptroller and Auditor General for Jersey & Chair of the UK Financial Reporting Advisory Board: “Climate change impacts do not stop at borders - consistent disclosures and accountability should help better international collaboration on mitigations and actions.” 

 

peter welch

“Climate is an urgent issue and it’s affecting all of us. Wheat production in the UK and France is forecast to be down 20% this year because of increased rainfall. So, it's important that we address these issues. The Accountancy Europe Public Sector Group is much involved in looking at IPSASB’s work, we have been commenting on the various exposure drafts, and we're looking forward to this new discussion,” added Peter Welch, the Chair of Accountancy Europe’s Public Sector Group. 

beatriz sans redrado

Beatriz Sanz Redrado, Director of Directorate C - Treasury, Accounting and Financial Reporting, DG Budget, at the European Commission said: “The European Commission is helping and promoting climate neutrality in the future and the objective we have set to ourselves is that Europe will be the first climate-neutral continent in the world by 2050. As part of this, for our own operations, we are aiming for climate neutrality by 2030. It is essential that we report in a robust and transparent way on how we progress on these commitments.” 

“We highly appreciate the IPSASB’s outstanding achievement of finalizing its exposure draft on Climate-related Disclosures in such a short timeframe. As the host of the 2024 September IPSASB meeting, we are very much looking forward to the approval of the exposure draft,” she added. 

Panel Discussion

During the discussions moderated by Fabienne Colignon, Chair of the IPSASB Consultative Advisory Group, panelists discussed the drivers of adoption of sustainability reporting practices, highlighting successful examples and key challenges. They also offered recommendations on how public sector entities can start, or further advance, their reporting journey and discussed the next steps towards the future adoption and implementation of the coming IPSASB Sustainability Reporting Standards globally. 

Drivers of adoption and successful examples of sustainability reporting practices

Renée Pichard, Partner, Public Sector Accounting and ESG Reporting Advisory at Deloitte Canada said: “While both public and private sector entities are driven by the need for transparency, regulatory compliance, and operational efficiency, the specific drivers and challenges they face can differ significantly. The public sector is often driven by public accountability, mission alignment, and funding opportunities, while the private sector is more influenced by investor pressure, market differentiation, and competitive advantage.”

David Vidanes, Head of Sector, EU Budget Performance and Policy Mainstreaming, DG Budget of the European Commission explained how the European Commission is integrating climate-related reporting into its budget performance and policy-setting efforts, focusing on reporting and monitoring requirements. He also shared how the European Commission assesses the impact of expenditures financed by Next Generation EU green bonds. 

“The EU has now two main budgetary instruments. One is the traditional long-term EU budget, the Multiannual Financial Framework, under performance-informed budgeting. The other one, the Recovery and Resilience Facility (the EU's temporary recovery instrument, centerpiece of the €800 billion NextGenerationEU plan), is performance-based. The implementation of this instrument and the payments to the EU member states are purely based on member states achieving milestones and targets linked to investments and reforms. For this specific instrument, member states also must allocate 37% of their investments to climate objectives” David Vidanes explained. “Combining these two elements we have a direct link between performance related to climate objectives and the implementation of the program,” he added. 

Laure Ledoux, Head of Unit Greening, Safety and Buildings, DG Human Resources and Security at the European Commission, presented the Commission’s internal greening initiative, its Eco-Management and Audit Scheme (EMAS), and explained how integrating EMAS into public sector operations contributes to achieving broader environmental goals and enhancing public trust in government sustainability initiatives. 

“The European Commission has committed to becoming climate neutral as an organization by 2030, and we evaluate and report on our progress through EMAS. Beyond the environmental impact, this is part of our efforts to also be an attractive employer. I hope that this will be a successful example of building public trust through reliable and transparent reporting, and that it will inspire others. I also look forward to the development of an international standard in this area,” Laure Ledoux pointed out. 

Key challenges

Speakers highlighted resource constraints/limited funding, lack of expertise and training/skill gaps, complexity and fragmentation of data collection and management, and evolving standards as the main challenges for public sector entities in adopting comprehensive sustainability reporting practices.

Andrew Blazey, Deputy Head of Budgeting and Public Management at the OECD, reflecting on how governments can ensure that their budgeting processes are resilient and adaptable to the increasing demands of climate change and sustainability, underlined that “this is a challenging area of budgeting.” 

“It’s important to be specific about the boundaries and limitations of budget initiatives and to draw a distinction between greening government and greening policy, and to recognize the roles performed by non-governmental actors,” he added.

Panel Discussion

Key Recommendations to Get Started

Speakers shared recommendations on how public sector entities can start or further advance their sustainability reporting journey: 

  • Educate your stakeholders (internal and external); 
  • Align with organizational goals and drive change through key leaders of the organization;  
  • Think short, medium and long-term to align policy and prioritization; 
  • Understand what data, processes and controls are currently in place to support climate disclosures and reporting to understand gaps; 
    • Clarify governance, as well as roles and responsibilities for reporting; 
    • Leverage established reporting processes and controls in finance function; 
    • Perform a gap assessment and data inventory of existing and available information to support reporting (e.g., current climate adaptation plans, strategies to green and decarbonize operations, GHG emissions inventory and tracking) compared against the IPSASB SRS Exposure Draft, Climate-related Disclosures;  
  • Assess and validate material topics, perform materiality assessments and quantification of the financial impact of climate actions, strategies, and policies; 
  • Share developments that contribute to disseminating best practices; 
enhancing public sector action through climate reporting - audience

Next steps towards adoption and implementation of the proposed IPSASB Sustainability Reporting Standard globally

“We need to take action now. Don't wait for the standards to come out. Start collecting data and thinking through strategy and action,” recommended Lynn Pamment. 

For Andrew Blazey, “We are already starting to see greater transparency on public finance and sustainability. The work by fiscal councils provides a leading example. We also see considerable work from publishing on governance, strategy, and risk management, which is helping to focus on metrics and targets.” 

For Laure Ledoux, “there is no need to reinvent the wheel.” She recommended to consider the example of successful approaches, such as EMAS, to help support existing schemes, to avoid duplicating or adding an additional reporting layer.  

“We need to highlight the return on investment, such as establishing trust, staff engagement and participation, and economic savings. It’s also very important to show examples of successful schemes and concrete impacts,” she added. 

“The IPSASB is working hard to develop its first public sector climate-related disclosure standard, around two main roles of public sector entities. First, like private corporations, they manage their own operations - our goal is to align our guidance with the private sector standards. And secondly, the board is developing new public sector-specific guidance to assist entities responsible for putting in place climate policies, which will require those entities responsible for public policy programs to communicate and report on such programs to ensure accountability for the progress in achieving the outcomes of their policy activities,” said Renée Pichard. 

Karen Leung indicated that “the exposure draft on the Climate-related Disclosures will be out for public consultation for a minimum of 120 days, from the end of October until late February 2025. The IPSASB’s aim is to approve the final Climate-related Disclosures standard by the end of 2025.”  

“We're also seeking volunteer entities to help field test parts of the exposure draft, to get feedback on implementation-related issues, to ensure that it meets the practical needs in the public sector. We will also be conducting outreach through regional roundtables,” she informed the audience. 

“Reporting on Climate-related Discloses in the public sector provides information useful for decision making, and for transparency and accountability purposes. This transparency allows governments to be accountable for their actions, which is important for building public trust,” said Ian Carruthers, Chair of IPSASB in his concluding remarks. 

“We're looking forward to talking to our stakeholders to make sure that we can continue this dialogue and ensure that the proposals meet the reporting needs in the public sector. Stay tuned for more information on the IPSASB’s Climate-related Disclosures exposure draft and its standard-setting work and please ensure to provide feedback to the coming consultation,” he concluded. 

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Useful Links

IPSASB 

IFAC 

Accountancy Europe 

European Commission

OECD 

 

Cecile Bonino
Cecile Bonino

Principal, Global Engagement

Cecile Bonino is Principal of Global Engagement for IFAC. She bridges global organizations' relationship management, policy support, event management, and brand awareness. A lawyer by education, Cecile has 20 years of experience in public affairs and public relations. Before joining IFAC, Cecile worked for 13 years at ACCA, where she headed EU Affairs and the ACCA Brussels office, working with European decision and policymakers, Media and key influencers, as well as global organizations. Prior to this, Cécile worked as a consultant in financial services, energy, environment, and climate change at Weber Shandwick and as Environment and Legal Affairs adviser at the European Landowners Organisation. At the beginning of her career, Cécile also worked at the DG TRADE of the European Commission, the DG Development of the College of Europe, and the law firm, Gide Loyrette Nouel. In 2012, Cécile won the ‘Public Affairs Professional of the Year’ prize at the European Public Affairs Awards.

Ross Smith

Program and Technical Director, IPSASB

Ross leads the IPSASB staff team, work program delivery, and stakeholder outreach and engagement. Recently, Ross’ focus has been on strategic initiatives to broaden the IPSASB’s funding, strengthen the institutional support needed for public sector sustainability reporting, and determine the future financial reporting standard-setting plan to account for the increasing use of IPSAS.

Ross joined IPSASB in 2013 and led the implementation of the Board’s governance activities and the establishment of the Consultative Advisory Group. Ross also developed and oversaw the IPSASB’s financial instruments projects, and the strategy and work program.

Before joining the IPSASB, Ross worked for several years for a big-4 accounting firm in Canada and Japan. Ross focused on complex accounting and audit assignments related to public utilities, industrial companies, and financial institutions. Ross is a Canadian Chartered Professional Accountant.