XBRL is generally associated with large panies that use it to deliver timely, aurate, and transparent financial information to investors. But now GRI is working on a project that might see it bee a routine tool for CSR reporting.

If XBRL sounds like a new PC games nsole or the latest model of an Italian sports car, then this article will help explain why GRI sees such potential for it.

XBRL stands for eXtensible Business Reporting Language, which was developed by XBRL International, a not-for-profit nsortium.

It is one of the XML family of programming languages that are being a standard means of municating information between businesses on the inter Instead of treating financial information as a block of text - as in a standard inter page or a printed document - it provides an identifying tag for each individual item of data, which can be processed by puter software. XBRL allows report preparers to place these electronic tags on specific ntent (graphs, numbers, text, etc.) in their reports by using an existing “XBRL taxonomy”. Taxonomy here simply means a list of tags anised into a single set.

Think about it like a bar-de. If you were given an Excel table full of numbers and nothing else, then XBRL is like putting bar des on each of those cells, with certain information embedded in those cells that is useful for paring data and for benchmarking purposes. For non-financial data, this uld extend to things like greenhouse gas (GHG) emissions, where an XBRL tag uld include information on how the data should be presented, how it was calculated, emission factors used and so forth. puter software that regnises the information in a XBRL document would then select the data, analyse it, store it and exchange it with other puters and automatically present it in different ways. The same uld be applied to information on rporate carbon strategies and goals if the taxonomy has been developed beforehand.

Initially developed to help better municate financial data, XBRL is now being explored for its use in analysing and presenting non-financial data. In 2006, the Global Reporting Initiative (GRI) released the first version of XBRL taxonomy for G3. GRI is now working on identifying how to further improve the taxonomy so that it can bee a routine tool to support the exchange of environmental, social and ernance (ESG) information. The outes of the project, as outlined on the GRI web, will result in a send version of the taxonomy to enhance use and applicability. The new XBRL taxonomy will enable anisations to tag their sustainability data in reports. It is hoped the taxonomy will help anisations improve the quality and integrity of their sustainability performance data and will facilitate munication between panies and their stakeholders, particularly with regard to financial analysts and investors.

This may sound like something useful for panies reporting on ESG issues and their stakeholders, but there are some issues that will need to be solved. For example, if you want to read the Montepaschi Group’s 2007 CSR report in XBRL language (the first pany to use it), then you will need special software to read it.

XBRL is not much help for the general reader of reports. XBRL is not something like social media. It’s not flash technology, and it’s not orientated to making a report more pleasing for the eye or easier for readers to sort through. It’s mostly for data processing purposes.

A nversation with Sean Gilbert, Director for Climate Change and Sustainability at KPMG Beijing helped to point this out. Aording to Sean, XBRL caters for users of large volumes of rporate data – such as investors, analysts, central bankers or nsumer based webs (e.g., GoodGuide). Basically anyone trying to do ranking and rating based on non-financial data would find it useful. It’s not intended for readers, but rather for data llectors, helping analysts sort through a lot of data quickly with greater reliability and nsistency of information and allowing users to customise reporting to meet the specific needs of information seekers.

But this requires panies to first tag their reports.  Research and rating agencies can then use software and applications that automatically extract certain information from sustainability reports or rporate webs. “Potentially it’s the best of both worlds; panies get regnised for issues that they want to be regnised for and analysts land up with useful information”.

panies that are already using XBRL for their financial data may find the inclusion of their ESG data fairly straight-forward, but for those that have not yet transitioned to XBRL, the take-up is uncertain. It will be interesting to see what happens once GRI’s taxonomy is finalised and whether the critical mass needed to make the system useful is realised.