Amit Verma, CIPFA Sustainability Policy Manager
If we are serious about integrating sustainability into public sector accountability, we need to answer a fundamental question: how effectively are we measuring and reporting our sustainability impact?
As the global focus on climate action intensifies, sustainability reporting in the public sector remains no exception. The International Public Sector Accounting Standards Board (IPSASB) released an exposure draft on Climate-Related Disclosures Standards in October 2024. This initiative aims to gather feedback from public sector stakeholders on how sustainability reporting should evolve.
In response, the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Institute of Chartered Accountants in England and Wales (ICAEW) collaborated on a joint consultation response submission in February 2025.
Our response, which was informed by extensive discussions with stakeholders — including members of the CIPFA Sustainability Forum, ICAEW Sustainability Group, HM Treasury, and the National Audit Office (NAO) — outlined key considerations and potential challenges for implementing the proposed standard.
However, as IPSASB refines the standard ahead of its final release, questions remain: Will it offer public sector bodies a viable framework for sustainability reporting, or will it become yet another compliance burden on an already overstretched sector?
Public sector goes green — but are we ready?
Sustainable efforts to reduce Greenhouse Gas (GHG) emissions and achieve Net Zero are no longer just a private sector issue — public sector organisations at both central and regional levels are leading climate initiatives and integrating sustainability into their policy and operations. The urgency of this transition is underscored by the latest UN Emissions Gap Report, which warns that without immediate action, global temperatures could exceed 3°C, far surpassing the 1.5°C target. This unsustainable scenario presents significant environmental and socio-economic risks for present and future generations, reinforcing the need for robust and immediate collective action.
To meet global emissions targets, governments must not only strengthen regulations to reduce GHG emissions but also implement comprehensive and transparent sustainability reporting.
The fine print: what’s in the draft?
The CIPFA-ICAEW response to the exposure draft highlighted six critical areas for further debate:
- Public Policy Programmes
- Climate Related Public Policy
- Materiality
- Timeliness and Data Collection
- Existing Frameworks
- Judgements and Estimates
While CIPFA and ICAEW welcomed IPSASB efforts to develop a Sustainability Reporting Standard at pace, we also cautioned against rushing the process. Namely, we need to address the numerous challenges that public sector organisations already face. Limiting sustainability reporting to climate-related policies alone risks being too narrow and may lead to accusations of ‘greenwashing’. We also proposed a ‘phased approach’ — such as the Taskforce for Climate Related Financial Disclosures (TCFD) in the UK.
Our response also raises vital points surrounding the challenges of adopting a universal standard across different jurisdictions and frameworks. We also stress the need for greater clarity on data collection and benchmarking to support judgements, clarifying data collection guidelines and addressing the lack of benchmarks to support judgements.
The road ahead: progress or paperwork?
IPSASB’s ongoing initiative to create and implement a climate related standard mark an important step toward integrating sustainability into public sector financial reporting. However, CIPFA and ICAEW stress that the effectiveness of the new standard should be continuously assessed as part of IPSASB’s post-implementation review pipeline.
Moreover, given the resource constraints faced by smaller public sector entities, IPSASB must consider the significant challenges faced by smaller organisations and bodies to both comply with a standard and verify information provided as part of their reporting process. Robust assurance and audit processes must also be strengthened to enhance data reliability, given the complexity and subjectivity of sustainability disclosures.