Sustainability Reporting and XBRL

Abstract:     
Aording to van Marrewijk (2003), there is a small but essential distinction between rporate social responsibility and sustainability: rporate social responsibility relates to stakeholder dialogue and sustainability reporting, while the focus of rporate sustainability is on value creation and environmental management (as cited in Ciliberti et al., 2008, p. 89). This distinction implies that rporate sustainability is more internally focused and related to running the business, and that rporate social responsibility is more related to selling a business to external parties. However, if sustainability reporting is used for both external and internal purposes, the sustainability reporting process can be transformed to beme more related to running the business (Leibs, 2007, December 1). This can our if sustainability reports yield both external and internal reporting benefits. Effective internal sustainability reporting may be achieved, perhaps at a relatively low st, via real-time reporting and data reuse made possible by extensible business reporting language (XBRL).

Currently, most rporations just ncentrate on financial health as expressed through their profit and loss statements and balance sheets (“How aountants,” 2002, October 22). XBRL was originally developed to help process financial information (“Tag,” 2007, May) and was designed to properly associate business reporting data with externally focused financial reporting taxonomies (Garbellotto, 2006). However, XBRL may beme even more significant for sustainability reporting than for financial reporting (Baue, 2007, April 16). Financial reporting is legally required for publicly traded mpanies, which means they do it universally (Baue, 2007, April 16). But sustainability reporting is mostly voluntary, which means XBRL may beme a driving force in rporate sustainability reporting (Baue, 2007, April 16). XBRL’s use in sustainability reporting may help aelerate the mbination of financial and sustainability data in a single annual report (Leibs, 2007, December 1). Therefore, more widespread use of sustainability reports may very well be linked to more widespread rporate adoption of XBRL for both financial and sustainability reporting purposes.

It is also likely that sustainability reporting will be more widespread if sustainability reports are used for both external and internal purposes, thereby making sustainability reporting more related to running the business and value creation. This would cause the emphasis of sustainability reporting to move away from rporate social responsibility and toward rporate sustainability.

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