(a)

Sustainability reporting is a fluid term used to describe how entities report on their contributions to sustainable development. According to the United Nations’ Sustainable Development Goals, sustainable development is the pursuit of meeting the needs of the present without compromising the ability of future generations to meet their own needs. The concept of sustainable development emphasizes not only environmental considerations but also the social and economic impacts of human activities. It reflects the consideration of people, planet, and prosperity in any human endeavors, including the operations of public sector entities.

Sustainability reporting for the public sector is, therefore, concerned with how public sector entities measure and report on their positive and negative contributions to achieving sustainable development. Thus, public sector sustainability reporting may be defined as the practice of an organization reporting on its impact on sustainable development. It involves government entities and public institutions in the Volta Region disclosing information about their environmental, social, and governance (ESG) performance and impacts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              (b)

        The following justifications are advanced for the public sector engagement in sustainability reporting:

• Advancing sustainable development: The overriding objective of sustainability reporting should be to advance progress towards sustainable development. Acting in the public interest is a fundamental purpose of the public sector, and public sector entities in the Volta Region have the ability and mandate to make a positive impact on people and the planet. Sustainability reporting should provide policymakers and other stakeholders, including the public, with information to enable them to understand the sector’s impact on sustainable development.
• Supporting an economy-wide perspective: Sustainability reporting by large private sector companies is increasingly becoming the norm. Given that public spending represents a significant part of the global economy, the development of widespread public sector sustainability reporting will provide a better economy-wide understanding of progress towards sustainable development. Public spending as a share of gross domestic product (GDP) varies across countries, but in Organization for Economic Co-operation and Development (OECD) member countries, it amounted to almost half of GDP (46.3% on average) in 2021 (OECD 2023).
• Providing information to capital markets and development partners: Increasingly, investors in sovereign bonds, as well as bodies funding development initiatives, require information about the climate and nature-related risks and opportunities facing governments. Sustainability reporting by the public sector in the Volta Region should enable borrowing entities to better attract investment and donor funding, where applicable, to put these goals into action. In terms of sovereign bonds, providing sustainability information for capital markets also fulfills an objective of the UN’s Paris Agreement, which recognized the importance of ‘making finance flows consistent with a pathway to low greenhouse gas emissions and climate-resilient development’ (UNFCCC 2015).
• Transparency and accountability: Given the scale of public spending, public debt issuance, and the impact of the public sector in achieving sustainable development, the public’s ability to hold governments and organizations to account is important. The public sector in the Volta Region can demonstrate its impact on sustainable development through accurate sustainability reporting, enabling stakeholders to identify areas where progress is on track and issues that require action.
• Supporting internal decision-making: As well as the externally focused rationales outlined above, sustainability-related information supports policy, budget, and investment decisions made by those working in the public sector. Sustainability reporting enables policymakers in the Volta Region to be better informed as they consider options when formulating policies. It also allows decision-makers to allocate resources while taking into account sustainability considerations, supporting processes such as green budgeting.