The Public Sector: The Wild West of Sustainability Reporting

Public sector entities, including governments and public organizations, wield an unparalleled influence over people and the planet. Through regulations, they have the authority to shape everything from minor issues—such as whether people can chew gum or where they can hang their laundry—to decisions that alter landscapes for generations, like deforestation and large-scale mining. With only 1.08% of global land classified as terra nullius—territory under no one's jurisdiction—the public sector is directly or indirectly responsible for nearly everything that happens on Earth. Yet, despite this immense power, governments significantly lag in sustainability reporting, a practice that has gained traction primarily in the private sector. This is particularly surprising given that governments may not dominate global GDP but remain the largest direct spenders on welfare. For instance, India's social sector spending stood at approximately INR 280 billion (8.3% of GDP) in FY 2023, of which public spending accounting for 95%. If governments are spending at this scale and setting rules for every other sector, why aren't they holding themselves accountable similarly?

One key reason is a fundamental lack of focus on structured sustainability reporting of this own actions and policies. Governments prioritize measuring broad thematic outcomes (i.e., Sustainable Development Goals), tracking policy impacts, primarily social and economic, and compiling general statistics, which, while helpful, often overlook the key aspects of environmental and social consequences brought on by government's actions ( or lack of them). Multitudes of critical issues like land transfers, deforestation, and commercial permits frequently escape the scrutiny of sustainability assessments. While private corporations are often held responsible for significant environmental crises, we rarely acknowledge that government policies and approvals are what make these activities possible in the first place.

Colombia provides a striking example of this phenomenon. Following the 2016 peace agreement between the government and the FARC guerrillas, which ended decades of civil war, deforestation surged dramatically. Within just one year, 291,973 hectares of forest were cleared—an increase of 23% compared to the previous year. As government control expanded into previously conflict-ridden areas, cattle ranching and agricultural expansion intensified, often at the expense of forests. This case highlights how policy decisions, even those aimed at fostering peace and stability, can have unintended environmental consequences—yet such impacts often go unmeasured and unaddressed in government sustainability assessments.

Another significant barrier for public sector sustainability reporting has been the parochial evolution of accountability mechanisms within the public sector. Government reporting has traditionally centered around financial expenditures, with political and judicial oversight primarily ensuring compliance in areas like employment policies and worker welfare. However, regarding sustainability, there are no strong frameworks to measure, monitor, or disclose government decisions' environmental and social impacts. Unlike the private sector, where sustainability reporting is often required or at least expected from investors and stakeholders, public sector organizations face little pressure to disclose such information voluntarily. 

Understanding the difference between Monitoring and Evaluation (M&E) and sustainability reporting. While M&E focuses on assessing key policies and programs against their stated objectives, it does not account for the broader environmental or social consequences that extend beyond the policy's direct scope. This distinction is crucial, as governments may believe they are tracking impact adequately through M&E, but in reality, they fail to assess unintended or externalized costs.

Compounding this issue is the lack of real incentive to change the status quo. While democratic systems mandate certain types of data collection, sustainability-related reporting remains fragmented, inconsistent, and often driven more by external political pressures than by an internal commitment to transparency. Parliaments, in theory, serve as hubs of transparency and accountability. Yet, much of the reporting process is influenced by the priorities of political parties and individual representatives rather than being part of a structured, standardized approach. As a result, most governments fail to adopt comprehensive sustainability reporting frameworks, leading to a lack of structured, comparable data across different regions and policy areas.

There's a strong case for why the public sector should take sustainability reporting seriously—and why it's time for more action in this direction. Standardized reporting could offer a much-needed big-picture view of how government policies and decisions impact sustainability, leading to more informed policymaking and legislative reforms. Right now, apart from some theme-focused metrics made by multilateral bodies such as health, education, etc., systemic standards are adopted to measure the sustainability impact of its regulations and decisions, which means critical environmental and social consequences often go unaccounted for. If global sustainability standards were widely adopted, they could transform public governance, ensuring that laws and policies are made with a clearer understanding of their long-term effects. 

Such standards would also strengthen democratic institutions. Most elected representatives and technocrats lack experience in representative democracy procedures, management best practices, and sustainability. These standards could act as guiding principles for generations of public leaders and representatives, bringing about a paradigm shift in government affairs.

Beyond that, governments already have an incredible advantage in data collection and analysis. In many cases, they far exceed the private sector's ability to measure economic, environmental, and social impacts on a large scale especially across value chains and. varying geographies. If they channel this strength into sustainability reporting, it could be a game-changer—providing high-quality, reliable data that improves transparency and helps companies refine their sustainability strategies. Hence, it isn't just about holding governments accountable; it's about using their vast resources and influence to lead by example, and drive systemic change in a way no other sector can.