The IPSASB continues the development of a Climate-related Disclosures standard for the public sector

The IPSASB continues their discussion on the draft Climate-related Disclosures standard. The draft standard includes some principles from the IFRS Sustainability Standards as well as the Global Reporting Initiative (GRI) Standards. The IPSASB discussed how to adapt the draft guidance to address public sector features that are not prevalent in the private sector.

The IPSASB noted that the key difference in the public sector relates to the policy activities of public sector entities. Policies refer broadly to any types of policy intervention including legislation, regulation, guidelines, standards, procedures, programs, grants, subsidies, expenditures, taxes and other fiscal measures, and/or public ownership. The IPSASB decided that additional public sector specific principles and application guidance are required to address the public sector’s policy activities.

Where the information needs of users relate to the public sector entity’s operations, the guidance in the private sector in IFRS S2 Climate-related Disclosures may appropriately address this need.  In this instance, the draft standard can include IFRS S2 guidance with appropriate public sector terminology changes supported by additional application guidance.

The long term objective of the standard will be drafted to guide an entity to report on its commitments on climate change. A crucial factor in applying the objective is to understand an entity’s context. This requires an entity to understand its latest international commitments, including its national plans and targets and its role in contributing to these. The IPSASB decided to draft guidance on how to understand an entity’s context.

The deliberations of the March meeting have not yet been incorporated to the draft standard. We will watch closely as this project progresses.