Mumbai: Finance and audit professionals in the public sector are facing a dual challenge: preparing for sustainability reporting and navigating ethical dilemmas in the realm of sustainability reporting. The International Public Sector Accounting Standards Board (IPSASB) has taken a significant step by initiating the development of public sector-specific sustainability reporting standards, starting with a Climate-Related Disclosures standard.
Joint Initiative on Sustainability and Assurance
At the World Investment Forum in Abu Dhabi on October 16, the Association of Chartered Certified Accountants (ACCA), the International Federation of Accountants (IFAC), and INTOSAI Development Initiative (IDI) jointly launched a summary of their upcoming guide on sustainability and assurance in the public sector. This initiative encourages government and public sector bodies to take a leadership role in transparent reporting and assurance of expenditure, aligning with the principle of sustainable development.
Government Leadership in Transparent Reporting
Maggie McGhee, Executive director for Strategy and Governance at ACCA said: “A sustainable future for all is a primary concern across government activity. At the same time governments play a critical role in establishing good governance: the institutional, policy and regulatory frameworks in which society operates. So governments and other public sector bodies need to be able to measure and report on how their policies and expenditure are addressing sustainability challenges.”
Supreme Audit Institutions’ Role in Assurance
As sustainability reporting evolves, the need for independent external assurance becomes apparent. Supreme Audit Institutions (SAIs) are seen as pivotal in this role, leveraging their experience in auditing progress towards sustainable development. Archana Shirsat, Deputy Director General at The INTOSAI Development Initiative (IDI) , emphasized the central role of SAIs in providing independent oversight on sustainability information to build public trust.
Ethical Challenges in Sustainability Reporting
Marking the occasion of Global Ethics Day, ACCA also issued a warning about ethical dilemmas and greenwashing in sustainability reporting. Their guide, “Ethical Dilemmas in an Era of Sustainability Reporting,” addresses risks such as greenwashing, weak processes, lack of technical knowledge, and compromises in objectivity and independence.
Guidance for Ethical Decision-Making in Reporting
“As the landscape of sustainability reporting evolves, this guide empowers both accountants and individuals outside the accounting realm with practical scenarios. It emphasizes the importance of maintaining objectivity, independence, and the capability to address challenges such as greenwashing, process vulnerabilities, and knowledge deficiencies. By promoting ethical decision-making and prioritizing sustainability, this guide becomes a crucial tool for building trust, encouraging accountability, and crafting well-rounded, impactful reports that contribute to a sustainable future” said Sundeep Jakhar, Head of Public Affairs – India, ACCA.
Empowering Professionals with a Practical Guide
The guide, developed in partnership with academics from Warwick Business School, includes real-world scenarios and a checklist to support professionals in applying the International Ethics Standards Board for Accountants Code principles. Sharon Machado, Head of Sustainable Business at ACCA, emphasized the importance of strong leadership in sustainability reporting to avoid poor-quality reporting and maintain trust.