Introduction
On January 10, 2024, the European Financial Reporting Advisory Group (EFRAG) and the European Sustainability Reporting Board (ESRB) gave the green light to the draft European Sustainability Reporting Standards (ESRS) XBRL Taxonomy. This significant step forward owes much to the dedicated efforts of the EFRAG team, backed by strong support from ESMA, the European Commission’s policy and digital teams, EFRAG’s Technical Expert Group, the independent expert taxonomy advisory committee, and the Digital Reporting Consultative Forum. Looking ahead, the approved taxonomy will soon be open for public inspection, kicking off a 60-day consultation period that underscores the importance of gathering input from various stakeholders.
European Sustainability Mandate: Introducing CSRD
In simple terms, the EU Corporate Sustainability Reporting Directive (CSRD) requires big companies and those considered to serve the public interest in the EU to share information every year about how they’re doing in areas like the environment, social issues, and governance (ESG). Recently, the European Parliament approved this directive, marking a big step forward in making companies tell us more about their impact on the environment and society, and how they are managed. Now, companies covered by this directive have to provide detailed reports about their activities, explaining how they affect the environment and society, and how they are run. You can learn more about CSRD here.
“Early Bird’s Digital-First” Approach to CSR Mandate
Effective January 1, 2024, the CSR mandate requires companies subject to the Corporate Sustainability Reporting Directive (CSRD) to adopt a “digital-first” approach in preparing their sustainability disclosures. XBRL International encourages companies to establish robust systems, processes, policies, and controls for collecting and managing data, aligning with the EFRAG taxonomy. By adopting a digital-first mindset, companies ensure that they are proactively engaged in disclosing timely, relevant and accurate data with utmost transparency. Furthermore, as digital reporting becomes mandatory and companies start publishing structured reports in Inline XBRL, the information will be readily accessible and valuable to a broad spectrum of stakeholders.
Anticipated Developments: What Lies Ahead?
The approved taxonomy will soon be accessible on EFRAG’s website for review and feedback. Stay tuned for updates. IRIS recommends being proactive in selecting and onboarding ESG reporting software, covering data collection, authoring, and digital reporting along with comparing the report with your peer companies. Streamlining these needs into a single software solution can simplify the process.
IRIS CARBON® and ESG Mandate Compliance
Leverage IRIS CARBON® Disclosure Management to establish a successful ESG program and prepare for CSRD compliance, coupled with digital reporting. This Cloud-based ESG platform facilitates effective target setting, automates reporting processes, and provides transparent benchmarking. Manage risks, showcase impact, and foster change through its various features.
Riding the iXBRL Wave: Your Ticket to Superior ESG Reporting!
To the people reading this blog, we bring great news. Using the most recent ESRS/ISSB taxonomy to transform ESG/sustainability reports into iXBRL is a great opportunity for companies who are presently preparing to release their reports in 2023. This shows the company’s dedication to being ahead of the curve when it comes to reporting standards for analytics and investors, and it also improves the efficiency and accuracy of disclosure reporting. For the last two years, digital reporting has helped businesses like Gap Inc. meet their sustainability reporting requirements. Learn more by reading the official news release provided here.
