IPSASB Releases First Climate Disclosure Standard for Governments and Public Sector

The International Public Sector Accounting Standards Board has released IPSASB SRS 1, the first-ever sustainability reporting standard designed specifically for governments and public sector entities, enabling them to report on climate-related risks and opportunities using a framework broadly aligned with IFRS S2. The standard was developed with World Bank support following a 2022 call for public sector-specific sustainability reporting guidance.

The new standard follows the structure of IFRS S2, the ISSB's climate reporting standard, with disclosure requirements covering Governance, Strategy, Risk Management, and Metrics and Targets. Public sector entities will be required to disclose Scope 1, 2 and 3 emissions based on the GHG Protocol or another established methodology, alongside climate-related governance, strategy, scenario analysis and resilience disclosures. An initial exposure draft was released in 2024, with the finalised standard incorporating feedback including the removal of specific public policy programme disclosure requirements.

Key differences from the private sector IFRS S2 standard include a broader stakeholder focus, the use of public sector terminology, and a rebuttable presumption on the GHG Protocol — allowing public entities to use alternative emissions methodologies if they can justify the deviation. The standard includes transition reliefs: entities are not required to disclose Scope 3 emissions in the first three annual reporting periods, and comparative information is not required in the first year. These reliefs align with those offered in the private sector IFRS standards.

IPSASB Chair Thomas Muller-Marques Berger said governments play a fundamental role in climate action and that climate-related information is essential for stronger public financial management. The new standard is significant for emerging economies including India, where public sector entities — from state electricity boards to urban development agencies — are increasingly expected to demonstrate climate risk governance as part of access to international climate finance and green bond markets. The standard takes effect from January 2027.

Key figure — January 2027