Great posting on XBRL International about the new India Mandate that requires public companies to begin disclosing sustainability information – in additional to financial information -- using the global XBRL data standard.
More than 2/3 of the world’s capital markets are disclosing public company financial information using the XBRL data format -- this format needs to be moved over to public company sustainability data for both investors, public and government.
Earlier this year -- the US Securities & Exchange Commission (US SEC) released a concept release that discusses the concept of public companies disclosing sustainability information to mitigate risk to investors dealing with global warming/climate change risk.
https://www.gpo.gov/fdsys/pkg/FR-2016-04-22/pdf/2016-09056.pdf
Page 23970 addresses the disclosure by public companies of sustainability/ climate change/ global warming/ data to disclosure "material risk" and the use of the XBRL data format for the tagging of such disclosed information.
Various standard setting CSR organizations such as SASB and CDP are suggesting the use of the XBRL data format for this disclosure as well. XBRL use for sustainability reporting would correspond to what public companies are disclosing for financial data as mandated by the US SEC.
SASB Response:
https://www.sec.gov/comments/s7-06-16/s70616-25.pdf
SASB: On page 44 of this letter – reference to the US SEC using XBRL for sustainability reporting data:
XBRL is currently the only broad-based format for tagging disclosures internationally. SASB thus favors leveraging this existing infrastructure and allowing for voluntary XBRL tagging of sustainability-related disclosure information in the MD&A section of SEC filings.
SASB fully supports the SEC’s pilot to allow iXBRL filings and hopes that there
will widespread adoption and a mandate for iXBRL in the future. iXBRL has the potential to reduce errors in data submission, simplify disclosure, and reduce the costs of disclosures for preparers while improving data quality. As the XBRL reporting tool infrastructure is well established, and XBRL tagging is used on an international basis. We believe that the cost of switching to iXBRL would be relatively low, and outweighed by the benefits of enhanced data quality.111
SASB has prepared a complete XML taxonomy and a pilot XBRL taxonomy, and will develop the infrastructure to support an XBRL taxonomy when XBRL tagging is allowed in the MD&A.
SASB would be interested in participating in any task force that addresses the disclosure of sustainability information and the technological means to enhance consumption of this information.
Would it not be great to connect the dots here – and use XBRL for both financial and CSR data so we can have “integrated reporting” – the ability for the capital markets to more accurately reward public companies “doing the right thing” as it relates to sustainability/ corporate social responsibility (CSR)/ environmental, social governance (ESG) activities by linking financial performance data using a common “machine-readable format” for instant analysis.
If we are going to do what President Obama suggested in his last “State of the Union” speech in January and take actions to deal with America’s Number 1 Problem -- climate change/ global warming – the capital markets needs a mechanism to more accurately obtain and release public company disclosed information in a structured format such as XBRL for effective utilization by investors, the public and government.
Let’s keep our fingers crossed and see if technologies such as XBRL will move forward … away from looking at paper documents to “machine-readable” formats used by Internet search engines for effective global public access and utilization to make important decisions regarding our lives – and future generations that will have to deal with this growing problem.
Companies have great stories to tell – using XBRL helps investors and the public better consume and analyze this important news will be most helpful.
New sustainability technologies will need to be developed and implemented and this reporting regime can significantly help in this effort.
Bravo to India for this bold move forward… Hopefully the US SEC will follow this effort.
America is the world’s largest capital markets – the most innovative – we need to utilize technologies such as XBRL coming from the accounting marketplace to create better efficiencies in the capital markets to keep things moving forward.