Updates and perspectives on ESG at XBRL Europe event
Another really interesting session at the 30th XBRL Europe conference was the plenary session on environment, social, and governance (ESG) matters, with presentations now available to peruse online. It focused particularly on the crucial theme of how digital thinking is being built into emerging ESG standards.
First up, Patrick de Cambourg and Richard Bössen of the European Financial Reporting Advisory Group (EFRAG) caught us up on the digitisation of the European Sustainability Reporting Standards (ESRSs). As they explained, digitisation experts are working closely with the standard setters to review working papers and exposure drafts. This process – in which XBRL EU has provided important support – includes filing of data definition templates with reporting elements identified in the disclosure requirements and application guidance. A digitisation readiness-check is performed on every disclosure and feedback is provided to the standards setters, including proposed improvements. A proof-of-concept XBRL taxonomy has been created for selected climate-related disclosure requirements, experience from which will be used in the development of the final taxonomy, to be published soon after the final ESRSs.
Nili Shah and Owen Jones of the International Financial Reporting Standards (IFRS) Foundation then presented on ‘IFRS Sustainability Disclosure Standards – Digital from Day One.’ They discussed the creation of the International Sustainability Standards Board (ISSB) and its approach, and the development of draft climate and general sustainability reporting standards. Staff have also published a draft Sustainability Reporting Taxonomy, and are currently seeking feedback. The presentation looked at the design of the taxonomy, which is intended to be compatible with any financial reporting standards and to function as a global baseline on which can be added local building blocks. It also covered fundamental matters being considered, such as taxonomy grouping, metrics, the granularity of narrative information, and how to capture connections between related information.
Rounding off the plenary, Chie Mitshui of the Nomura Research Institute brought us insights on discussions in Japan around sustainability reporting, recent developments such as the establishment of the Sustainability Standards Board of Japan (SSBJ), and expectations of deploying the ISSB standards. She also discussed how digitisation can improve the utility of disclosures, the kinds of digital tags needed, the challenges of ensuring objectivity and transparency, and the need to consider how information will be used throughout the data supply chain.
Read more here.