Why This Matters Now
Governments face growing financial and operational risks from climate change and extreme weather, yet until now lacked a globally consistent framework to disclose those risks. The release of IPSASB SRS 1, Climate-related Disclosures marks a milestone: the first sustainability reporting standard designed specifically for the public sector, filling a long-standing gap in climate accountability and transparency.
What Is IPSASB SRS 1?
Issued by the International Public Sector Accounting Standards Board (IPSASB) with support from the World Bank, SRS 1 establishes a standardized way for governments and public sector entities to report climate-related risks and opportunities within their general purpose financial reports. The standard responds directly to demand from public sector stakeholders for clearer, more decision-useful climate information.
How the Standard Is Structured
IPSASB SRS 1 closely mirrors the architecture of private-sector climate reporting, drawing heavily on **IFRS Foundation standards developed by the International Sustainability Standards Board (ISSB)—specifically IFRS S2 (Climate-related Disclosures). Disclosures are organized around four core pillars:
Governance: Oversight of climate-related risks and opportunities.
Strategy: Impacts on strategy, financial planning, resilience, and scenario analysis.
Risk Management: Processes for identifying, assessing, prioritizing, and monitoring climate risks and opportunities.
Metrics & Targets: Greenhouse gas (GHG) emissions (Scopes 1, 2, and 3), targets, and performance metrics.
Key Differences from Private-Sector Climate Standards
While aligned with IFRS S2, IPSASB SRS 1 reflects the realities of the public sector. The standard is designed to serve broader stakeholder needs beyond investors, uses public-sector-specific terminology, and introduces a rebuttable presumption favoring the Greenhouse Gas (GHG) Protocol for emissions accounting—meaning entities are expected to use it unless another methodology is clearly justified.
Importantly, following stakeholder feedback, the final standard excludes mandatory disclosures on public policy programs and their outcomes, narrowing the initial scope to an entity’s own operations. Policy-related disclosures are expected to be addressed in a future phase.
Transition Reliefs and Timing
To support adoption, IPSASB SRS 1 includes transitional reliefs:
Scope 3 emissions disclosures may be omitted for the first three reporting periods.
Comparative information is not required in the first year.
Climate reporting may be issued after financial statements in the initial reporting period.
The standard applies to annual reporting periods beginning on or after January 1, 2028, with early adoption permitted.
The Bigger Picture
With governments responsible for a significant share of global emissions and climate-related spending, IPSASB SRS 1 represents a critical step toward consistent, comparable public-sector climate disclosure. By aligning public and private sector reporting structures, the standard also supports capital markets, lenders, and development finance institutions seeking clearer visibility into climate risks, resilience, and financing needs across the global economy.
