The Association of Chartered Certified Accountants (ACCA) and the Pan African Federation of Accountants (PAFA) welcome the opportunity to comment on the Exposure Draft of IPSASB’s first proposed Sustainability Reporting Standard (SRS ED 1) on climate-related disclosures. Our general comments on the Exposure Draft follow below, with ACCA and PAFA’s detailed responses to the specific matters for comment set out in the subsequent section.
In preparing this response we also engaged with officials in public sector entities at a virtual roundtable meeting facilitated by the African Association of Accountants General, in February 2025. Insights from this roundtable helpfully illuminated many of the key considerations and challenges identified in this response. However, this response represents the formal views of ACCA and PAFA and not necessarily those of any other organisation.
In recent years ACCA and PAFA have strongly supported the development of sustainability reporting in the public sector and have engaged with IPSASB and the wider public finance community on this crucial topic. As well as responding supportively to IPSASB’s initial Consultation Paper on sustainability reporting in 2022, ACCA held two global roundtables on sustainability reporting in early 2023 to support work on developing IPSASB’s initial three sustainability reporting projects. In addition, together with IFAC and the INTOSAI Development Initiative, ACCA published a report in 2023 on ‘Preparing for sustainability reporting and assurance in the public sector’.
The comments in this submission are made in the context of strong support for IPSASB’s work in developing public sector sustainability reporting. The Board and staff have demonstrated clear leadership in this area over the last three years. This is reflected by the significant work involved in reaching a position where an Exposure Draft (ED) can be published. In overall terms, our response welcomes the comprehensive approach proposed in the ED of the Standard and the accompanying guidance. We support the principle (in paragraph 6) that clearly states that entities may apply this standard regardless of the basis on which the financial statements are prepared.
IPSASB are proposing a comprehensive approach to reporting on climate-related risks and opportunities for entities’ own operations. However, for reporting on public policy programs, we identify two significant challenges, where we believe further consideration from IPSASB is required before finalising the Standard. Firstly, the question of ‘responsibility for outcomes’ will require ‘significant judgement’, as paragraph BC45 of the ED highlights. Further implementation guidance and illustrative examples to inform this judgement are required. Alternatively, IPSASB could consider re-wording the Standard to require entities with ‘responsibility for implementation’ to make the relevant disclosures. This is discussed further in our response to SMC 3.
The second major challenge is the extent to which entities should report on public policy programs with climate-related impacts on the economy, environment and people. The Standard does not explicitly adopt the concept of double materiality; nevertheless, we believe the broader impact of public sector entities on the climate will be of fundamental importance to the primary users of entities' climate-related information. However, the current scope of the ED restricts reporting to climate-related public policy programs only.
While recognising that reporting on every public policy program is neither practical nor desirable, the approach proposed in the ED risks excluding reporting on policy programs that may have significant climate-related impacts. IPSASB should consider revising wording in the Standard to more clearly enable, or indeed require, reporting on a broader range of public policy programs. One approach could be for entities to report on those programs where climate-related risks and opportunities could reasonably be expected to affect the achievement of that program’s outcomes. This is also discussed further in our response to SMC 3.
As we highlight in our responses to the specific matters for comment, implementing sustainability reporting across the public sector globally will undoubtedly be challenging. There are issues of capability, capacity and data collection, as well as attributing outcomes to individual organisations, when the policy and organisational landscape is often complex. It is therefore crucial that public sector entities are supported by a comprehensive set of resources from IPSASB to assist implementation.
Finally, ACCA and PAFA share IPSASB’s ambition for rapid implementation of sustainability reporting across the public sector globally. Urgent action is needed to address climate change, requiring commitment from all public sector entities, and climate-related disclosures are an integral mechanism for accountability and transparency. However, it is important that the information reported by entities is accurate and authoritative. Inevitably, for some entities which have not yet begun sustainability reporting, it will take time to produce information which can be relied upon by users. Consequently, this response proposes extending the timeline for implementation, to ensure adoption is more achievable for all types of public sector entity.
This response draws on eight key characteristics and qualities of reporting, outlined in ACCA’s recent report ‘Principles of Good Corporate Reporting’, published in November 2024. As sustainability-related standard-setting progresses, it is important to ensure that this reporting helps to catalyse the necessary systemic change. The process should drive operational changes in the entities making these disclosures and provide primary users with better quality information, enabling these disclosures to drive more efficient and responsible resource allocation. For this to happen, widespread application of integrated thinking by entities as well as integrative thinking by finance professionals is necessary, where information connections lead to quality decision-making and sustainable value creation.
ACCA and PAFA look forward to the finalised Standard and are ready to work with IPSASB to clarify, discuss or provide further information about our comments in this submission. ACCA and PAFA are also willing to play our part in supporting the finance profession in the public sector to engage with sustainability reporting and drive this important agenda forward.
To read the response in full, please download the consultation response document found on this page.
