Supporting ESG reporting with data standards
The XBRL US ESG Working Group has published its final paper, on ‘Supporting ESG Data with Standards.’ It provides a discussion of the group’s findings on how the XBRL standard can be used effectively to support environmental, social and governance (ESG) disclosures, providing relevant information in a format that supports evaluation and comparability.
“Data used for investment decisions, policy-setting and risk assessment should be made available in non-proprietary machine-readable formats. Current best practices for disclosures as machine-readable data have improved quality, reduced the cost of processing, and improved timeliness and usability of reported data,” states the paper. It includes a number of detailed recommendations on how best this can be achieved, in areas such as rendering ESG data machine-readable, allowing data to be disaggregated and totalled, eliminating inconsistencies in data types and units to enhance comparability, and providing guidance and validation to confirm that a submitted report is correct.
The paper also encourages issuers and users of ESG data to stay abreast of ongoing standards-setting endeavours, and to participate in public consultations including those now being held by the SEC and ISSB.
Read more here.