Public sector sustainability reporting: response to the IPSASB consultation

Main points:

  • the International Public Sector Sustainablity Accounting Standards Board has suggested that it should sent sustainability reporting standards for the public sector.
  • however the key components of public sector sustainability reporting guidance are reporting on impact on economies, society and the environment and state of the community/environment reports.
  • IPSASB does not have expertise on this.
  • additional matters covered in current guidance are value creation for the economy, society and environment and financial accountability in connection with related expenditures.

To: Ian Carruthers, Chair, IPSASB

7th September, 2022

Response to your Consultation Paper on Public Sector Sustainability Reporting issued in May 2022 Comment 

Thank you for the opportunity to respond to your questions concerning the advancement of public sector sustainability reporting. 

I am responding as a Professor of Accounting and member of the Institute of Chartered Accountants of Scotland with experience in sustainability reporting practice and policy development. Of particular relevance to the public sector, I have led the development of award-winning university sustainability reports and sustainability management and governance processes and conducted research in public sector sustainability and integrated reporting. Further details are here. I am currently working with CIPFA on updating their public sector sustainability reporting guidance. 

IPSASB Preliminary view 1. The IPSASB’s view is that there is a need for global public sector specific sustainability reporting guidance.

If we think of public sector work as comprising four key categories: professional services (e.g. heath care and education), infrastructure development, tax raising and regulation; it is the latter two that are particularly distinct in being solely the domain of the public sector. 

For some other types of public sector organisations, such as state-owned companies (e.g. utilities, oil and gas), transport, health care providers, utilities, transport, etc there will be considerable overlap with the nature of information required by stakeholders of their private sector counterparts.  Thus, GRI’s sector standards apply to both privately owned and state-owned organisations with specific mention of state-owned enterprises where relevant. For example, GRI 11, the standard for the oil and gas sector states (p54): “State-owned enterprises (SOEs) face specific challenges in relation to corruption because they may have less effective internal controls and be subject to partial independent oversight. In addition to driving profit, SOEs may also pursue broader objectives such as community development.” In such cases state-owned organisations may choose to provide additional information or be required to by law. 

For other types of public sector organisation there may be no private sector equivalent, for example for emergency services, public agencies, local government, cities, etc.

The IFAC building block approach to sustainability reporting works well for the private sector. Public sector sustainability reporting guidance has a heavy focus on the impacts of the organisation, but also includes additional disclosure types (see, for example, CIPFA 2013; HM Treasury, 2022). GRI’s (2004) resource document in support of its project to develop a public agency sector supplement noted that, with respect to sustainability: 

“Public agencies in general deal with three different types of measurements:

• operational impacts;

• policy effectiveness; and

• the state of economic, environmental, and social conditions in areas under their jurisdiction.” (GRI, 2004, p 9)

Since that time there has also been a recognition of the impacts of sustainable development trends on the risks and opportunities that have implications for strategies to create value for themselves (the organisation), for their stakeholders, their providers of finance and society more broadly.  Public sector guidance also tends to require financial accountability for spend on sustainable development initiatives. 

So, we might consider public sector sustainability reporting to encompass:

  • IMPACT: Information on the positive and negative impacts of the organisation on global achievement of the SDGs
  • STATE OF THE ENVIRONMENT/COMMUNITY and OUTCOMES OF POLICIES: Information on the state of the economy, society and the environment under the organisation’s jurisdiction and other information on policy outcomes related to sustainable development.
  • VALUE CREATION: Information concerning the creation of long-term value for the organisation, economy, society and the environment – 
  • FINANCIAL ACCOUNTABILITY: Information concerning spend on social, economic and environmental activities

So, impact is broader than IFAC’s block 2 (referred to in your chapter 1) where public agencies, local government, cities, etc measure the outcomes of economic, social and environmental policies and/or prepare ‘state of the environment/community’ type reports. With respect to block 1, these types of public sector organisations consider value creation as going beyond “enterprise value”. Public agencies and local governments are creating value for the economy, society and the environment. 

In summary, in response to your preliminary view 1:

  • There is a need for a public sector specific sustainability reporting standard for public agencies and different levels of government, such as local government and cities. However, there are many similarities between state-owned and private sector companies, health and education providers. Such organisations should use standards developed for these specific sectors that include additional guidance for state-owned/public sector organisations where relevant.
  • The aims and nature of public sector sustainability reporting practice and guidance is different from the private sector.  In particular it has an even stronger emphasis on impact reporting and also some emphasis on: value creation for the organisation, economy, society and the environment (i.e. beyond enterprise value); state of the environment/community and or outcomes of policies; and, financial accountability.

IPSASB Preliminary view 2. The IPSASB’s experience, processes and relationships would enable it to develop global public sector specific sustainability reporting guidance effectively.

I will set out my response following the headings in the consultation paper:

The Conceptual Framework addressing non-financial information

GRI 101 and GRI 102 together cover all the concepts and principles addressed in the IPSASB Conceptual Framework. In addition, GRI Standards cover the following additional concepts and principles that are specific to sustainability reporting and are not covered in the IPSASB Conceptual Framework.

Principles, characteristics & practices of reporting Global Reporting Initiative (GRI)
Material topicsGRI 3 defines material topics and provides guidance on how to determine them.
Sustainability contextRequires the organisation to report “information about its impacts in the wider context of sustainable development”. GRI 101
FormatOrganisations must publish a GRI content index (for which a template is provided) showing where required disclosure items are located. (This recognises the preferences of different (types of) organisation with regard to the balance of annual report, specific report or website for reporting different types of information.)
BaselineMust be stated along with the rationale for choosing it and reasons for any recalculation of base year figures (see, for example, GRI 305-1d)
Use of estimatesUsed where information is not available and assumptions disclosed (e.g. GRI 305, p 10)

Existing relevant guidance

There is little in the existing suite of Recommended Practice Guidance that is relevant to sustainability reporting. Impact reporting is the key focus of public sector sustainability reports and guidance[1]. GRI Standards have been developed since the late 1990s. Indicators in extant public sector sustainability reporting guidance referred to in preparing this response demonstrates a strong overlap with GRI Standards.

Current guidance development projects and high-quality processes and global relationships

Whilst the developments listed are welcomed, they do not indicate a greater level of experience, processes and relationships relevant to sustainability reporting than those developed by GRI over 25 years (approx.). Like the IPSASB, the GRI also has significant links with governments and public agencies and has invested heavily in increasing accountability on the UN Sustainable Development Goals and the UN Guiding Principles (on Business and Human Rights) (United Nations, 2011) which are particularly relevant for public sector organisations and their supply chains.

In summary, in response to your preliminary view 2:

  • Both IPSASB and GRI have significant links with governments and public sector agencies. There is likely to be complementarity across these links (i.e. with different government departments and agencies. 
  • IPSASB lacks experience relative to the GRI in impact reporting (which is also the basis for state of the environment/community reporting). Impact reporting is a requirement of extant public sector reporting guidance. 

One way forward (in terms of achieving effective change toward sustainable development) would be a public agency and local government sector standard developed jointly by the IPSASB and GRI using both bodies’ excellent and rigorous due processes. This might involve a close cross board collaboration on all content and/or with each board focussing primarily on their area of expertise.  Another would be for GRI to develop a public agency sector supplement with IPSASB developing a standard on financial matters.

IPSASB Preliminary view 3. If the IPSASB were to develop global public sector-specific sustainability reporting guidance it proposes applying the framework in Figure 5. In developing such guidance, it would work in collaboration with other international bodies, where appropriate, through the application of its current processes.

The criteria of ‘prevalence’ and ‘consequence’ used to prioritise projects for financial reporting (your para 3.10) are inappropriate for sustainability reporting because they use financial reporting and the financial statements as a reference point. (The GRI has developed criteria for prioritising topic standards.)

The GRI Universal Standards (GRI 101, GRI 102 and GRI 103) already cover many of the elements in your Figure 5. Many public sector organisations use GRI Standards.

IPSASB Preliminary view 4. If the IPSASB were to develop global public sector specific sustainability reporting guidance, it would address general sustainability-related information and climate-related disclosures as its first topics. Subsequent priority topics would be determined in light of responses to this Consultation Paper as part of the development of its 2024-2028 Strategy.

I recommend that the IPSASB first considers a) what type of public sector organisation(s) it is considering; and b) which of the four areas of sustainability reporting listed in response to preliminary view 1 it will provide guidance on. 

IPSASB Preliminary view 5. The key enablers identified in para 4.2 are needed in order for the IPSASB to take forward the development of global public sector specific sustainability reporting guidance.

I agree with this list except ‘coordination’ with other international standard setters is insufficient with respect to GRI. I would add:

  • Governance and partnership agreement with the GRI
  • IPSASB members knowledgeable about public sector impact reporting

Specific matter for comment 1. What topics should be prioritised?

See recommendations regarding the approach above.

Specific matter for comment 2. Willingness to contribute financial or other support to the IPSASB?

Willing to provide expert input informed by evidence.

Yours sincerely

Professor Carol Adams BA CA MSc PhD

Policy materials reviewed in preparing this response

Accounting for Sustainability (2022) Navigating the reporting landscape Available at

Adams, CA (2020) Sustainable Development Goal Disclosure (SDGD) Recommendations: Feedback on the consultation responses, published by ACCA, IIRC and WBA. ISBN-978-1-898291-33-6 Available at

Adams, C. A., Alhamood, A., He, X., Tian, J., Wang, L. and Wang, Y. (2021), The double-materiality concept: Application and issues (Global Reporting Initiative: Amsterdam).

Adams, C A, with Druckman, P B, Picot, R C, (2020) Sustainable Development Goal Disclosure (SDGD) Recommendations, published by ACCA, Chartered Accountants ANZ, ICAS, IFAC, IIRC and WBA. ISBN: 978-1-909883-62-8

CIPFA. (2021). Evolving Climate Accountability: A global view of public sector environmental reporting. CIPFA. Retrieved from… 

CIPFA (2013) Producing a sustainability report. CIPFA. Available at

CIPFA and IIRC (2016) Integrated thinking and reporting: Focusing on value creation in the public sector: An introduction for leaders. IIRC.

GRI Standards as current.

GRI (2005) Sector Supplement for Public Agencies: Pilot Version 1.0 (Amsterdam).

GRI (2004) Public Agency Sustainability Reporting: A GRI Resource Document in Support of the Public Agency Sector Supplement Project. 

GRI, UN Global Compact and WBCSD (2015), SDG Compass: A guide for Business Action to Advance the Sustainable Development Goals, available at  

HM Treasury (2021) Sustainability Reporting Guidance: 2021-2022 Available at

IFRS Foundation (2022a) [Draft] IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information Available at

IFRS Foundation (2022b) [Draft] IFRS S2 Climate-related Disclosures Available at

IIRC (2021) Integrated Reporting Framework

IPSASB (2022a) Consultation paper, natural resources. IPSASB. Available at

IPSASB (2022b) Advancing public sector sustainability reporting: consultation paper.  IPSASBAvailable at

IPSASB (2022c) Exposure Draft 81: Proposed update to the Conceptual Framework. IPSASB. Available at

IPSASB (2021) Strategy and work program 2019-2023: Mid-period work program consultation. IPSASB.

IPSASB (2020) Climate change: relevant IPSASB guidance. IPSASB.

IPSASB (2016) RPG 1 Reporting on the long-term sustainability of an entity’s finances. IPSASB.

IPSASB (2016) RPG 2 Financial statement discussion and analysis. IPSASB.

IPSASB (2016) RPG 3 Reporting service performance information. IPSASB.

National Audit Office (2022) Measuring and reporting public sector greenhouse gas emissions Available at

New Zealand Government (2021) The Living Standards Framework.  New Zealand Government. Available at

NSW Treasury (2022) Annual Reporting Reform 2022: Discussion Paper, New South Wales (Australia) Treasury. Available at

Parliament of Australia (2019), “Terms of reference”, available at:   

United Nations (2011) Guiding principles on business and human rights, available at

Victorian State Government, Department of Health and Human Services (2017) Public environmental reporting guidelines: Guidance for Victorian public healthcare services Available at

Academic research relevant to this response

Adams, C. and Mueller, F. (2022), “Academics and policymakers at odds: The case of the IFRS Foundation Trustees’ consultation paper on sustainability reporting”, Sustainability Accounting, Management and Policy Journal, Vol. 13 No. 6.

Adams, C. A., Muir, S., & Hoque, Z. (2014). Measurement of sustainability performance in the public sector. Sustainability Accounting, Management and Policy Journal, 5(1), 46–67. 

Caputo, F., Lorenzo L., and Pizzi, S. (2021). The Contribution of Higher Education Institutions to the SDGs—An Evaluation of Sustainability Reporting Practices. Administrative Sciences 11: 97.

Cooper, S. and Michelon, G. (2022), “Conceptions of materiality in sustainability reporting frameworks: commonalities, differences and possibilities”, in C. A. Adams (Ed.), Handbook of Accounting and Sustainability, Edward Elgar Publishing, Cheltenham, pp. 44-66.

Dumay, J., Guthrie, J. and Farneti, F. (2010). GRI sustainability reporting guidelines for public and third sector organizations’, Public Management Review, 12: 4, 531 — 548.

Giacomini D, Rocca L, Zola P and Mazzoleni M (2021) Local Governments’ environmental disclosure via social networks: Organizational legitimacy and stakeholders’ interactions, Journal of Cleaner Production, 317 128290,

Jørgensen, S., Mjøs, A. and Pedersen, L. J. T. (2022), “Sustainability reporting and approaches to materiality: tensions and potential resolutions”, Sustainability Accounting, Management and Policy Journal, Vol. 13 No. 2, pp. 341-361.

Niemann L. and Hoppe T. (2018) Sustainability reporting by local governments: a magic tool? Lessons on use and usefulness from European pioneers, Public Management Review, 20:1, 201-223, DOI: 10.1080/14719037.2017.1293149

Tun S. and Martin T. (2022), Education for Sustainable Healthcare – A curriculum for the UK, Medical Schools Council, London, UK

Williams, B. R. (2015). The local Government accountants’ perspective on sustainability. Sustainability Accounting, Management and Policy Journal, 6(2), 267–287. 

Williams, B. R. and Lodhia, S. (2021) Integrated reporting in public sector organisations: A study of Australian local councils, Journal of Environmental Management, 280, 111833. 

[1] See list of materials referred to in developing this response at the end of this document.

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  1. I am fully supportive of Carol’s response. Well argued and presented.
    I can see why the IPSASB feels compelled to join the movement to report, but I do not know whether they have considered the timeline, costs and implications involved.
    Judging by what is going on with the ISSB, GRI, EU disclosures etc, a new standard would probably take 4 – 5 years to write, train and implement, even if mandatory.
    Costs to undertake the activity outlined above are high and as Carol pointed out IPSASB does not have the expertise to hand. IUs further funding available?
    As Carol has stated, it would be far more cost-effective and straightforward to mandate reporting using the GRI standards and start by collecting and reporting the carbon emissions data.
    I am unsure what IPSASB will do with the flood of data that will result and I look forward to how they plan to apportion carbon emissions reduction for the public sector to meet the Net Zero target.

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