A New Climate Reporting Line in the Sand for Governments

Key Takeaways

• A First for the Public Sector: IPSASB SRS 1 is the first global climate-related disclosure standard written specifically for governments and public sector entities, embedding climate risk into mainstream financial reporting.
• Climate Disclosures Become a Core Reporting Expectation: Effective from 2028, the standard signals that climate-related risks and opportunities are no longer optional context but part of how public sector accountability is assessed.
• Aligned With IFRS Climate Standards, But Not Investor-Centric: The framework mirrors IFRS S2’s structure while being designed for broader stakeholder needs, including citizens, legislators, and oversight bodies.
• Operational Focus, With Policy Reporting Deferred: Climate disclosures center on an entity’s own operations and financial exposure, with public policy program impacts left for a future phase.
• Phased Implementation to Ease the Burden: Transition reliefs, including delayed Scope 3 emissions reporting and reduced first-year comparative requirements, are intended to make adoption more practical for governments.

Deep Dive

The International Public Sector Accounting Standards Board has taken a big step toward bringing climate transparency into the heart of public sector financial reporting with the release of IPSASB SRS 1, Climate-related Disclosures.

The new standard is the first sustainability reporting framework developed specifically for governments and public sector entities. Its aim is straightforward but far-reaching and is intended to ensure that climate-related risks and opportunities are clearly disclosed within general purpose financial reports, giving users better insight into how climate pressures affect public finances, operations, and long-term resilience.

The standard will apply to annual reporting periods beginning on or after January 1, 2028, although early adoption is permitted. IPSASB framed the timing as a balance between urgency and practicality, giving public sector entities time to prepare while signaling that climate-related reporting is becoming a core expectation rather than an optional add-on.

From Concept to Standard

The roots of SRS 1 stretch back to 2022, when the World Bank asked IPSASB to take the lead on developing sustainability reporting guidance tailored to the public sector. That request reflected growing concern that existing climate disclosure frameworks were largely designed for investors and private companies, leaving governments without a comparable global baseline.

Following a consultation process that revealed strong demand for public sector-specific guidance, IPSASB released an exposure draft in 2024. Feedback on that draft helped shape the final standard, including a key decision to narrow its initial scope. Rather than requiring disclosures on public policy programs and their outcomes, IPSASB chose to focus SRS 1 on climate-related risks and opportunities tied to an entity’s own operations. Disclosures related to policy programs are expected to be addressed in a later phase of the board’s sustainability work.

Familiar Structure, Public Sector Focus

In developing SRS 1, IPSASB leaned heavily on existing global sustainability standards, particularly the climate reporting framework issued by the International Sustainability Standards Board under the IFRS Foundation. As a result, the structure of the public sector standard closely mirrors IFRS S2.

SRS 1 is built around four pillars: Governance, Strategy, Risk Management, and Metrics and Targets. Together, they require entities to explain how climate-related risks and opportunities are overseen, how they influence strategy and decision-making, how those risks are identified and managed, and how performance is measured.

That includes disclosures on greenhouse gas emissions across Scopes 1, 2, and 3. IPSASB expects entities to use the Greenhouse Gas Protocol for emissions reporting, but introduced a “rebuttable presumption” that allows alternative methodologies where an entity can justify their use.

While the architecture may feel familiar to organizations already working with private sector standards, IPSASB emphasized that SRS 1 is designed for a different audience. Unlike IFRS S2, which is explicitly investor-focused, the public sector standard is intended to meet the needs of a broader group of users, including citizens, legislators, and oversight bodies. The language and concepts throughout the standard have been adapted accordingly.

Easing the Transition

Recognizing the scale of the shift, IPSASB has built several transition reliefs into the standard. Public sector entities will be allowed to defer Scope 3 emissions disclosures for their first three annual reporting periods. In addition, entities will not be required to provide comparative information in the first year of reporting and may publish climate-related disclosures after their financial statements during that initial period.

Announcing the release, IPSASB Chair Thomas Müller-Marqués Berger underscored the broader significance of the move, pointing to the central role governments play in shaping climate outcomes across entire economies. He said climate-related information is becoming essential to public financial management, helping governments understand risks and opportunities within their own operations while supporting access to capital markets needed to finance climate resilience.

With SRS 1 now finalized, IPSASB has effectively set a global baseline for climate-related disclosures in the public sector. As the 2028 effective date approaches, the standard is likely to become a reference point for how governments demonstrate climate awareness, fiscal responsibility, and long-term resilience in an increasingly climate-constrained world.

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