One of our panel questions at the recent GRI conference was focused this issue: How do you assure sustainability data to give investors and others more confidence in the provenance of the data? Well the short answer is simple: Use XBRL to prepare it.
Each XBRL business fact (that is not some one-off extension) is in a sense pre-assured to a certain degree. The number or text that is being reported is tagged the way it is because the company doing the tagging has defined it as a specific kind of data in relation to an agreed taxonomy that contains the definition for that tag. This doesn’t stop people lying or using the wrong tag but it does mean that the data has already been subject to some kind of contextual clarification by reference to an agreed taxonomy based on IFRS or US-GAAP.
This kind of taxonomy-based assurance means that when you click on a number in a report rendered from XBRL data you can usually see a popup or hover that gives you a lot of information about what that data point actually refers to (units, period, context, calculation basis etc.). Which to me is a little more reassuring than just a non-interactive number in a printed financial statement and a bland “In our opinion…” auditors statement.
So imagine your XBRL number was a steak on your plate in a restaurant. Now you don’t know where that steak came from. In fact it could have come from a horse. But if this was an XBRL steak, you could click on it and you would see a picture of a cow in a field and all the cow metadata - cow number 123456, an Aberdeen Angus from Scotland, farmed by Jock McSporran and fed on organic porridge .
Which would either be reassuring or turn you into a vegetarian.
Tags: Sustainability
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