LIKE the private sector, the public sector needs appropriate sustainability reporting standards to enable better-informed decision making, hold government accountable for the environmental impact of their interventions and foster trust in the public sector sustainability efforts.
Sustainability reporting standards for the public sector provide a framework for governments and public sector organisations to disclose their sustainability performance and impacts.
These standards aim to enhance transparency, accountability, and the ability to measure and manage sustainability-related risks and opportunities.
Sustainability-related risks and opportunities refer to the potential positive and negative impacts that environmental, social, and governance (ESG) factors can have on an organisation's performance, reputation, and long-term viability.
These risks and opportunities are associated with sustainable development issues and can arise from various sources. Examples of these risks and opportunities are climate change risks and opportunities, environmental risks and opportunities, social risks and opportunities, governance risks and opportunities and technological risks and opportunities.
Public sector organisations often adopt and adapt existing sustainability reporting frameworks to suit their needs. These are some of the widely recognised sustainability reporting frameworks that can are used by public sector organisations:
Global Reporting Initiative (GRI): The GRI Standards are widely adopted by organisations globally, including the public sector. They provide a comprehensive set of guidelines for reporting on economic, environmental, and social performance. Public sector organisations, such as government agencies, municipalities, and public institutions, often use the GRI framework to report on their sustainability performance and impacts. The GRI Standards provide a comprehensive set of guidelines for reporting on economic, environmental, and social aspects, allowing public sector entities to disclose relevant information and demonstrate their commitment to sustainability.
International Integrated Reporting Council (IIRC) framework: The IIRC framework promotes the integration of financial and non-financial information in reporting, emphasising the creation of long-term value. It can be used by public sector organisations to enhance their reporting practices. The IIRC Framework encourages organisations, including public sector entities, to provide a holistic view of their value creation process by considering various capitals, including financial, manufactured, intellectual, human, social and relationship, and natural capital.
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United Nations Sustainable Development Goals (SDGs): The United Nations Sustainable Development Goals (SDGs) provide a global framework for addressing social, economic, and environmental challenges to achieve sustainable development. While the SDGs themselves are not directly linked to public sector accounting, they provide a context and framework for public sector organisations to align their reporting and accounting practices with sustainable development objectives.
Above are some of the frameworks that govern the public sector reporting standards, but how can the public sector embrace sustainability reporting standards.
Key steps
The following are important steps that can be taken by organisations on the ESG journey.
Awareness and commitment: Public sector organisations should develop an understanding of sustainability reporting standards and their benefits. Senior leadership should demonstrate commitment to sustainability reporting and integrate it into the organisation's strategic objectives.
Identify applicable standards: Public sector entities should identify the sustainability reporting standards that are most relevant to their context and reporting needs. This may involve considering frameworks such as the Global Reporting Initiative (GRI), the International Integrated Reporting Council (IIRC) Framework, or other relevant standards as mentioned above.
Conduct materiality assessment: Public sector organisations should conduct a materiality assessment to identify the most significant environmental, social, and governance (ESG) issues that are relevant to their operations and stakeholders. This assessment will help determine the focus areas for sustainability reporting.
Develop reporting framework: Based on the identified sustainability reporting standards and materiality assessment, public sector organisations should develop their reporting framework. This framework should outline the organisation's reporting scope, objectives, data collection processes, and reporting formats.
Collect and analysedata: Public sector entities should establish systems to collect and analyse relevant data related to sustainability performance. This may involve gathering information on energy consumption, greenhouse gas emissions, waste generation, social programs, diversity, and other relevant metrics.
Engage stakeholders: Public sector organisations should engage with internal and external stakeholders to understand their expectations, gather feedback, and incorporate their perspectives into sustainability reporting. This may involve consulting with citizens, community groups, civil society organisations, and other government agencies.
Report and communicate: Public sector entities should prepare and publish their sustainability reports based on the chosen reporting standards. These reports should provide transparent and accurate information about the organisation's sustainability performance, impacts, and efforts to address ESG issues. It is important to communicate the reports effectively to stakeholders through various channels, such as websites, public meetings, and social media.
Continuous improvement: Public sector organisations should strive for continuous improvement in their sustainability reporting practices. This involves monitoring and evaluating the effectiveness of reporting processes, seeking feedback from stakeholders, and adapting reporting practices based on emerging sustainability challenges and evolving reporting standards.
Capacity building: Public sector entities should invest in building the capacity and skills of their staff to effectively implement sustainability reporting standards. This may involve providing training, resources, and guidance on data collection, analysis, and reporting methodologies.
Collaboration and knowledge sharing: Public sector organisations can collaborate with other entities, both within the public sector and across sectors, to share experiences, best practices, and challenges related to sustainability reporting. This collaboration can accelerate learning and facilitate the adoption of sustainability reporting standards.
By following these steps, public sector organisations can embrace sustainability reporting standards, enhance transparency, and demonstrate their commitment to sustainable development.
- Munjoma is attached to the Institute of Chartered Accountants of Zimbabwe and he holds a bachelor's degree in accountancy (University of Zimbabwe).
