Challenges and opportunities for sustainability disclosure.
During a panel at Data Amplified Virtual 2022 Richard Bossen (AMANA) and Owen Jones (IFRS Foundation) and Stuart Rowan (XBRL International) tackled the current challenges – and suggested potential solutions – facing sustainability standard setters now.
In financial disclosure, the parallel yet independent development of standards has led to some unnecessary departures and missed opportunities for building economies of scale. With sustainability standard setters around the world converging on mandates, standards, and taxonomies at roughly the same time, there is a significant opportunity to approach climate-related disclosure with intentionality that helps ensure best practice.
The XBRL International Digital Sustainability Disclosure Special Interest Group (DSD-SIG) has brought together technical staff from the main standard setters to encourage collaboration, co-operation, and, fundamentally, standards that lead to globally accessible data.
One key concept explored during the session was the idea of a shared registry to permit shared taxonomy schemas between major standard setters. While currently just an idea being researched, not yet policy, the concept of a shared registry would increase harmonisation and efficiencies between the major standard setters via a generic XBRL resource that contains elements that can be used by all the standards covering similar content. While there will no doubt be differences to the various climate-related reporting taxonomies, where there are similarities, the shared registry could be used to provide the same underlying definition, increasing comparability between data.
ESG disclosure is shaping up to be worldwide – so while there will always be a bit of picking and choosing of requirements and elements of interest at a jurisdictional level, where there is overlap it would be unfortunate if we have three entirely different taxonomies all saying the same thing.