Is the public sector sustainable? What’s next for sustainability reporting in accounting

Recording

Executive summary

The discussion focused on the evolving role of the public sector in sustainability reporting, lessons from the private sector, and how accountants and auditors can drive credible, decision-useful information.

1. Context and purpose – Nael Braham, Accountancy Europe

• The public sector is both a major source of emissions and a critical enabler of sustainable policy.
• Accountancy Europe supports the International Public Sector Accounting Standards Board (IPSASB) in developing sustainability reporting standards aligned with private-sector frameworks.
• The goal is to strengthen transparency, comparability, and accountability in public sector sustainability reporting.

2. IPSASB’s Sustainability Reporting Framework – Dave Warren, IPSASB

• IPSASB entered the sustainability space in response to calls from the World Bank and other stakeholders in 2022.
• Phase 1 (2025–26): Reporting on governments’ own operations, aligned with IFRS S2 standards.
• Phase 2 (2026 onward): Reporting on public policy programs and their climate-related outcomes.
• Strong stakeholder support for the overall direction; requests for greater clarity on materiality, timing, and scope.

3. Lessons from the private sector – Wim Bartels, Accountancy Europe & Deloitte

• Transition from voluntary to mandatory reporting (e.g., EU CSRD, ESRS) revealed early challenges: over-compliance and lack of focus on materiality.
• Core principles: apply double materiality, streamline indicators, focus on targets, policies, and performance.
• Auditors’ role: ensure balanced reporting, challenge selective disclosures, and promote substantive transparency.

4. Public sector challenges & opportunities – Delphine Moretti, OECD

• The public sector already engages in sustainability-related reporting (e.g., green budgeting, SDG budgeting, fiscal risk frameworks).
• Key challenges:
  • Avoiding overlap and duplication across reporting frameworks
  • Defining materiality across diverse stakeholders
  • Maintaining accessibility for citizens and decision-makers
  • Managing capacity and avoiding a compliance mindset
• Success depends on leadership commitment, integrated data, and actionable insights.

5. Panel discussion on the role of accountants & auditors – moderated by Peter Welch, Accountancy Europe & European Court of Auditors, with Wim Bartels, Maarten de Jong, Bernhard Schatz & Paul Winrow

• Provide assurance and credibility through trusted, consistent information.
• Ensure alignment between sustainability, budgeting, and risk frameworks.
• Support balanced storytelling – highlighting both achievements and challenges.
• Facilitate integration of sustainability into strategy, policy, and financial management.

6. Key takeaways

• Build on existing frameworks rather than duplicating them.
• Maintain alignment with private-sector standards (e.g., IFRS S2).
• Prioritise decision-useful and accessible reporting.
• Reflect both operational and policy impacts.
• Foster a culture of transparency, accountability, and continuous improvement.

About the webinar

In this webinar, we will discuss

• the latest developments to promote sustainability reporting alongside financial reporting in the public sector
• the specific challenges facing the public sector
• what can be learnt from experience in the private sector.

The public sector is key to achieving national and international sustainability targets. In many developed countries, it accounts for more than 40% of the economy; has the power to regulate; and is often a stakeholder in economic sectors that impact the climate.

Sustainability reporting, especially when linked to financial reporting, is an important tool for behavioural change. Join us to consider how accountants in the public sector can drive accountability reporting forward.

Speakers

• Moderator: Peter Welch, Chair, Public Sector Group, Accountancy Europe | Senior Advisor, European Court of Auditors
• Wim Bartels, Chair, Sustainability Policy Group, Accountancy Europe | European Sustainability Senior Partner, Deloitte
• Nael Braham, Senior Manager, Accountancy Europe
• Katharina Bryan, Former Head of International Sustainability Reporting Policy, Amazon | Senior Policy Advisor | Founder, Resilience²
• Maarten de Jong, Professor of Practice of Public Financial Management, Erasmus University Rotterdam
• Delphine Moretti, Senior Policy Analyst & Lead of workstreams on medium-term budgeting, financial management and reporting for the public sector, OECD
• Bernhard Schatz, Director Public Sector Accounting Advisory Services / ESG Reporting, Methodology & Standards, PwC
• Dave Warren, Director, IPSASB
• Paul Winrow, Partner – Sustainability Reporting & Assurance, Public Policy & Regulation, Forvis Mazars