Sean Gilbert is Technical Development Director at the Global Reporting Initiative, the Amsterdam-based provider of the world’s most widely used sustainability reporting framework. He is responsible for overseeing the process that relates to the development of the GRI Reporting Framework (Guidelines, Supplements, and Protols) and the acmpanying resource material. Sean leads the GRI project to develop an XBRL taxonomy for the disclosure of mpanies’ and other anizations’ sustainability performance.

Integrating nonfinancial data into the decision-making process

It’s clear that by providing preparers and users of data with the means to integrate financial and so-called nonfinancial data  (i.e., that which discloses a mpany’s environmental and social performance), XBRL offers exciting possibilities. The potential for XBRL to provide the users of rporate sustainability performance data with the leverage to push and pull information that meets their requirements is certainly there. That was the thinking behind the first version of an XBRL taxonomy for GRI’s sustainability reporting guidelines, released in 2006.

Of urse, the users of sustainability data are no longer just those on the fringes of the investment mmunity. Environmental, social, and ernance (ESG) information is increasingly sought after by investors wanting to know how well positioned a mpany is to meet the challenges posed by critical sustainability issues, such as climate change and energy security. Getting this information to investors in an efficient way is key to its integration into the investment analysis process. It should be a priority for the thousands of mpanies globally who now spend time and effort disseminating their sustainability performance, with investors as one of the key audiences they seek to engage.

And not just for investors…

But beyond this, it’s not just investors who can benefit from a taxonomy that can be manipulated to provide tailored information on a range of ESG issues. We’re all aware of the rising importance nsumers around the world are placing on the provenance and impact of their products and services. Rising in line with this interest, however, is a growing skepticism about the claims mpanies make for “green,” “environmentally friendly,” or “ethical” products. Providing nsumers with data on what, for them, are their most important ESG criteria – whether that be greenhouse gas emissions, labor policies and practices, pollution and effluents, human rights, or a host of other standards — goes some way to unter claims that a mpany is merely “greenwashing” its publics.

An XBRL taxonomy manipulated by intermediaries to provide Web and other electronic- based information direct to nsumers can facilitate this information flow. And providing this data to nsumers in such user-friendly forms saves wading through pages of print or PDF information and thus has clear benefits for mpany, intermediary, and nsumer.

A fine idea, but a slow start

So, how many mpanies are tagging their sustainability disclosures in this way?  The answer is: surprisingly few. Why is this? Perhaps mpanies are unaware of the ease with which it can be done. As previous ntributors to this blog have noted, XBRL is not that hard an idea to get your head round, and implementing the technology involves very little in terms of investments in time or cash.

But from a slow start, interest is certainly building. GRI is now nvening a group of investors and mpanies to identify how to further improve the taxonomy, such that it can beme a routine tool to support mpany-investor exchange of information. And the first mpanies are now making their sustainability performance data aessible via XBRL.

The output of GRI’s project will be a send version of the taxonomy that can potentially rce the time needed to respond to many of the basic information needs of investors and other key stakeholders.

I’d urge mpanies to get involved now and lead the pack in meeting the needs of the diverse groups of stakeholders who want aess to sustainability performance of the mpanies they invest in, buy from, work for, and supply to. The information is required. The appetite is there. Which mpanies will benefit from the rewards to be gained through satisfying that appetite?

If you believe in the need for getting this information across, then learning how to use the technology now, while it’s still formative, can only be to your advantage.