G3 Guidelines in XBRL
Most information today moves in a digital format. When searching for information on organizations or products, people often go to the internet. Companies use extensive ERP systems to manage information across units and across countries. Researchers and analysts typically have services that provide packages of reports and data sets and other information via terminals. Consumers are even turning to web-enabled devices like cell phones to answer whatever questions they have, whenever they have them.
Sustainability information, however, has largely remained in print, but report preparers and users have much to be gained by moving environmental and social performance information into the wider digital flow of information. This has already started with increasing use of web-based reporting. However, there is even more potential to be unlocked by enabling people to put their specific information into a widely-accepted format that can also give readers more flexible access to the contents of reports.
Introducing XBRL
This movement towards interactive reporting and data has already begun in the financial sector and is currently focused around the buildup of XBRL. XBRL stands for eXtensible Business Reporting Language and was originally developed for transmitting financial information.
XBRL offers a way to put an electronic “tag” on numbers or other qualitative information in the report. That way, computers can recognize the information select it, analyze it, store it, exchange it with other computers and present it automatically in different ways.
The main benefits of using the XBRL include:
- Greater reliability and consistency of information;
- Faster data collection, aggregation, sorting analysis for in-house purposes;
- Enhanced ability to customize reporting to meet the specific needs of information seekers such as investors and analysts; and
- Compatibility with financial reporting systems and requirements (e.g. SEC, IFRS, Basel II).
What does this mean in practice?
In practice, a report preparer would use an existing taxonomy to place XBRL tags on specific contents of their report. These tags could be placed in a web page, a PDF file, or any of several other standard file formats.
If, for example, a user wanted to focus specifically on greenhouse gas (GHG) emissions, XBRL would enable a user to immediately find the "GHG emissions" information in the document, extract it, and present it as raw data, analyze it based on the user’s predefined interest (e.g. amount of GHG emissions per product). The user could apply this to multiple reports to compare emissions information across different reports.
GRI’s XBRL Project
"We welcome the development of an XBRL taxonomy for the GRI Sustainability Reporting Guidelines, and plan to work further with GRI to develop it into an effective tool for communicating sustainability performance information.
At the moment, investors and companies face a challenge: more information is available than ever before, but companies and research providers are unable to gain the best value from this information. Researchers find that sustainability reports and associated data aren’t yet comparable enough and are often delivered in formats that are difficult to use. Companies have expressed the view that their existing published information is not sufficiently utilized and that the number of requests for information continues to grow.
Investors and research agencies will always need to ask questions about companies’ sustainability practices. However, a well-written GRI report that is tagged to an appropriate level of detail could meet many investors’ basic information needs. By reducing the time and effort required by companies to meet the information needs of investors and research agencies, an XBRL taxonomy has the potential to increase ease and efficiency for all who use the information.
We would like to work towards a future where:
- Companies release a standard set of ESG information prepared according to generally-accepted reporting standards that meets many of the basic information needs of investors;
- Companies apply a common digital protocol for labeling and communicating this standard information;
- Researchers can directly access and import a company’s sustainability data into their systems for analysis; and
- Companies can be confident that their publicly disclosed information quickly and easily reaches investors.
Just as information technology has been essential to making the distribution of financial data efficient, we believe that it also has a crucial role to play with sustainability information. We encourage the GRI to continue developing its XBRL taxonomy and we will work to see how it can best be used in our research process."
Signed by:
- Calvert Group
- Jantzi
- KLD
- Asset4
- SAM
- EIRIS
- RiskMetrics
- Investissment Responsible
- IWFinancial