Clean, consistent, timely, detailed data: Could XBRL help US Environmental Protection Agency achieve transparency?
XBRL US has sent a comment letter responding to the US Environmental Protection Agency (EPA) Strategic Plan 2022-2026, focussing on how structured, digital data could contribute to the third of the EPA’s key principles: “follow the science, follow the law, and be transparent.” As the letter observes, meeting the EPA’s strategic goals as laid out in the Plan “requires access to clean, consistent, timely, detailed data to pinpoint problem areas, devise solutions and track the progress of programs.”
“The EPA collects a vast amount of data about companies and individual facilities owned by those companies. For example, the EPA Greenhouse Gas Reporting Program (GHGRP) requires entities to report detailed information about emissions by unit and fuel type. This complex highly dimensional data is then made available to the public in spreadsheets. We support the EPAs efforts to publish these rich datasets, but we urge the EPA to modernize their data publication so that data is provided in machine-readable format, rather than spreadsheets that require some form of manual extraction process. Unambiguous, machine-readable data can be automatically checked and consumed by data users, has higher data integrity, is self-explanatory, and is significantly more timely.”
The letter focuses on three reasons why now is the right time for the EPA to go digital, illustrated with useful examples. Firstly, the Federal Energy Regulatory Commission (FERC) has recently adopted XBRL for financial and energy data reporting. Secondly, climate-related data is likely to be required to be reported to the Securities and Exchange Commission (SEC) in structured (i.e. XBRL) format in the near future. In both cases there are important overlaps, and it would be appropriate for the EPA to adopt the same standards. Thirdly, data reported to the EPA would be effectively supported by the XBRL standard. XBRL implementation offers a number of important benefits, including data quality and comparability and reduced reporting burdens.
We wholeheartedly support these suggestions from XBRL US! This is a great example of how XBRL can be applied to meet diverse reporting needs far beyond traditional corporate reporting. Equally, joined up thinking means that these collections could facilitate analysis across datasets and regulators.