Councils must weave sustainability reporting into governance processes, CIPFA says

The comments came in a new report from the professional membership body, Sustainability Reporting in the Public Sector: A Leap Forward, which reviewed developments in public sector sustainability reporting between 2023 and 2026.

It also examined the opportunities and challenges facing public bodies as reporting frameworks continue to evolve.

Sustainability reporting involves disclosing the environmental, social, and economic impacts of an organisation's activities.

CIPFA said that there has been significant progress in recent years on reporting, highlighting the publication of the International Public Sector Accounting Standards Board’s (IPSASB) first climate-related disclosure standard, SRS1.

However, it said many public sector organisations continue to face practical challenges around implementation, data quality, professional capacity, assurance and the integration of sustainability information into existing governance and financial management systems.

It warned that, unless these issues are addressed, sustainability reporting risks becoming a compliance exercise rather than a tool for improving decision-making and delivering better outcomes.

Elsewhere, the report warned that public sector organisations are facing significant climate-related risks that result in infrastructure damage, service disruption and increased operational costs. It also highlighted rising costs to adapt public services for climate resilience.

"In this context, there is a strong requirement to rethink the public sector’s approach to climate sustainability, and a robust sustainability reporting process developed through strong policy and regulatory frameworks will play a vital role in this," it said.

CIPFA made a series of recommendations, including a call for public sector bodies to embed sustainability reporting within their budgeting, governance and financial planning processes.

It also urged the public sector to:

• Improve the quality, consistency and assurance of sustainability data
• Strengthen skills, guidance and implementation for practitioners
• Develop more outcomes-focused approaches that measure environmental and social impacts
• Improve coordination and reducing fragmentation across reporting frameworks and guidance

CIPFA Sustainability Policy Manager Amit Verma said: “There is an opportunity to shift sustainability reporting from regarding it as a bolt-on exercise to recognising it as a central pillar of effective governance.

"Our report highlights the importance of integrating sustainability reporting with financial management, governance and performance systems so that sustainability information can support decision-making and long-term planning.”

CIPFA Chief Executive Owen Mapley added: “While international developments such as IPSASB’s SRS-1 climate disclosure standard represent an important step forward, further work is needed to address challenges around data quality, capability, implementation and consistency across the sector.”

Adam Carey