IPSASB discusses Exposure Drafts on Climate-related Disclosures and Measurement at May 2024 meeting

The ED is developed primarily from IFRS S2 with necessary parts of S1 for public sector entities to report on their own activities. Unique to the public sector, government should report on the impact of its policy setting and regulatory activities on the economy, environment and people. This guidance is developed with reference to GRI.

Key decisions at this meeting included:

·       Clearly reflect public sector perspective: The guidance on reporting on an entity’s own activities will be clearly distinguished from policy activities.

·       Change “impact” to “outcomes”: GRI refers to reporting on impacts. There are various definitions and interpretations of “impacts”. The ED will draw on its existing IPSAS literature and instead refer to “outcomes”, which is a term used in the Recommended Practice Guideline 1 on reporting long-term fiscal sustainability information.

·       Distinguish own activities from policy activities: An entity’s policy activities may impact its own activities. These activities will be separately defined and clearly distinguished.

·       Scope of policy activities: The ED will be developed to focus on an entity’s climate-related policy activities only. Other policy activities that may have a climate-related impact will not be included at this stage.

·       Reporting threshold: IFRS S2 notes that quantitative information need not be provided if the entity does not have the necessary skills, capabilities or resources. This low threshold may not be appropriate for the public sector, especially for policy activities, and will be considered further.

·       Reporting entity: Whole-of-government information may be useful to many public sector users, including rating agencies. The application of the requirements at a consolidated level will be consider further. The level of reporting will also be considered for certain types of disclosures, such as a scenario analysis.