The whole sustainability agenda has a golden opportunity to leapfrog old-style ‘rearview’ mirror reporting, even if it does use indicators like those advocated by the GRI, by moving towards a ‘real-time’ enterprise whereby corporate sustainability actions are reported pretty much as they happen – tweet style – using a simple XBRL taxonomy that lets all kinds of third parties receive and consume the data very easily. Just as we consume S.E.C. XBRL filings via an RSS feed now.
Related to Green XBRL is the BASDA Green XML standard:
BASDA Green XML will be available for other XML standards to quickly extend into carrying green elements in their messages, and has been designed with the developers of other standards to make it easy to extend all XML standard that use the elements of BASDA Green XML. Green XML is complex, so a single reference implementation that can be used by all standards will make interoperability significantly easier…
A major driver behind the development of this Green XML is that Carbon Emission trading is now a significant international business, and furthermore, there is a movement towards legislating for carbon accounting for all businesses. Without an agreed standard for interoperability between systems however, it will not be possible to extend from the current very large projects with significant measurement overhead, to a business-as-usual landscape. Thus there is a requirement for XML interoperability standards to be created and tested, so that financial software can be updated to support carbon, and other message types.
CFO magazine weighs in with the finance perspective on the rapidly evolving sustainability data standardization as follows:
In fact, the use of XBRL for sustainability reporting may drive a nascent but promising trend: the combining of standard financial data with sustainability data in a single annual report. [and real-time sustainability data streams?]. A handful of companies already do this, and Eric Israel, a managing director at KPMG, believes more will follow suit. “There is a serious need for IT support to make this happen,” he says. “It’s missing now, but as expectations change and sustainability reporting becomes less about PR and more about satisfying investors’ need for data, more automation will become essential.”
Although that might seem to be a mandate for a company’s chief information officer, Israel believes that CFOs may well drive the trend. As reports encompass more data, he says, “you have to ask whether a public-relations person or an environmental-affairs person is best qualified to verify whether the data is accurate and up-to-date. That’s really an area of expertise for CFOs and finance departments.” He expects to see CFOs play a stronger role going forward.
Seems like collaboration between CIO, CFO, and CSO is what’s required…