The full XBRL digital tagging taxonomy for ESRS
Introduction
The European Commission asked EFRAG (European Financial Reporting Advisory Group) to develop the XBRL taxonomy which would standardise the way companies report on the Corporate Sustainability Reporting Directive (CSRD) and ensure the reports are machine-readable. Following initial publication, review and refinement, EFRAG has published a final XBRL taxonomy so that all organisations reporting CSRD can “digitally tag” each data point and ensure that it is comparable, standardised and accurate. This new requirement is a major shift from ESG reporting today, where it is difficult for external investors, customers and stakeholders to compare ESG performance of companies. Currently, there is nothing stopping each company from using a different methodology, and the data is often hidden in lengthy and unstandardised PDFs. EFRAG has published the XBRL taxonomy to enable easy access for anyone, to any company’s ESG data, and to support effective comparison on sustainability performance between reporting companies.
In short, the requirement for XBRL digital tagging has been made to:
- Enable improved publication and disclosure of CSRD reports
- Make comparison and comprehension of CSRD disclosures easier
- Simplify and standardise the creation of CSRD reports
Digital tagging using the XBRL taxonomy is not currently mandatory for CSRD disclosures, but it is expected to become mandatory in 2025 (depending on the EU member state’s incorporation of XBRL into their sustainability laws). It is worth noting that by 2027, it will be mandatory for companies to file their CSRD reports on the European Single Access Point (ESAP) for which XBRL digital tagging will be required. It is therefore recommended that all companies reporting on CSRD use the XBRL taxonomy to make it machine readable from the outset.
How does XBRL digital tagging work?
Essentially, EFRAG’s XBRL taxonomy is a list of labels for each of the 1,200+ European Sustainability Reporting Standards data points (ESRS are the reporting standards stipulated by CSRD). Once applied, XBRL digital tagging will enable a computer to understand, organise and compare each data point. The labels all have to include enough detail so that a computer can extract the information required from the human readable report (click here to find out what these would look like). For example, each label includes the year to which the data corresponds (eg, FY 2024 or FY 2025), the unit of measurement (tons, Co2-equivalent-m2, % etc.), a unique descriptor of what the data point addresses (such as PlasticWasteReduction or NumberOfFatalaitiesAsResultOfWorkrelatedInjuries) and more.
If a company uses the XBRL taxonomy to digitally tag its CSRD report, it will be able to publish both a human readable format (PDF) for use by consumers and investors; and a machine-readable file (Inline XBRL) which will be used by the regulators and analysts.
How to get started with the XBRL digital tagging taxonomy:
If you are embarking on your first year of CSRD reporting or are in the planning stages to start reporting in two years’ time, this added requirement may seem like an unwanted hurdle. However, there are significant benefits to using XBRL tagging from the outset in your CSRD reporting. Not least the fact that it will soon become a mandatory requirement, XBRL tagging also ensures that your CSRD reports are going to be standardised, accurate and comparable.
KEY ESG is a member of the XBRL International organisation and has been taking part in the XBRL ESG workgroup since 2021. Our data collection and submission platform automatically implements the XBRL digital tagging taxonomy so our customers don’t need to worry about it. To speak to one of our experts and get a demo of our CSRD compliance platform, request a demo here.
Introduction
The European Commission asked EFRAG (European Financial Reporting Advisory Group) to develop the XBRL taxonomy which would standardise the way companies report on the Corporate Sustainability Reporting Directive (CSRD) and ensure the reports are machine-readable. Following initial publication, review and refinement, EFRAG has published a final XBRL taxonomy so that all organisations reporting CSRD can “digitally tag” each data point and ensure that it is comparable, standardised and accurate. This new requirement is a major shift from ESG reporting today, where it is difficult for external investors, customers and stakeholders to compare ESG performance of companies. Currently, there is nothing stopping each company from using a different methodology, and the data is often hidden in lengthy and unstandardised PDFs. EFRAG has published the XBRL taxonomy to enable easy access for anyone, to any company’s ESG data, and to support effective comparison on sustainability performance between reporting companies.
In short, the requirement for XBRL digital tagging has been made to:
- Enable improved publication and disclosure of CSRD reports
- Make comparison and comprehension of CSRD disclosures easier
- Simplify and standardise the creation of CSRD reports
Digital tagging using the XBRL taxonomy is not currently mandatory for CSRD disclosures, but it is expected to become mandatory in 2025 (depending on the EU member state’s incorporation of XBRL into their sustainability laws). It is worth noting that by 2027, it will be mandatory for companies to file their CSRD reports on the European Single Access Point (ESAP) for which XBRL digital tagging will be required. It is therefore recommended that all companies reporting on CSRD use the XBRL taxonomy to make it machine readable from the outset.
How does XBRL digital tagging work?
Essentially, EFRAG’s XBRL taxonomy is a list of labels for each of the 1,200+ European Sustainability Reporting Standards data points (ESRS are the reporting standards stipulated by CSRD). Once applied, XBRL digital tagging will enable a computer to understand, organise and compare each data point. The labels all have to include enough detail so that a computer can extract the information required from the human readable report (click here to find out what these would look like). For example, each label includes the year to which the data corresponds (eg, FY 2024 or FY 2025), the unit of measurement (tons, Co2-equivalent-m2, % etc.), a unique descriptor of what the data point addresses (such as PlasticWasteReduction or NumberOfFatalaitiesAsResultOfWorkrelatedInjuries) and more.
If a company uses the XBRL taxonomy to digitally tag its CSRD report, it will be able to publish both a human readable format (PDF) for use by consumers and investors; and a machine-readable file (Inline XBRL) which will be used by the regulators and analysts.
How to get started with the XBRL digital tagging taxonomy:
If you are embarking on your first year of CSRD reporting or are in the planning stages to start reporting in two years’ time, this added requirement may seem like an unwanted hurdle. However, there are significant benefits to using XBRL tagging from the outset in your CSRD reporting. Not least the fact that it will soon become a mandatory requirement, XBRL tagging also ensures that your CSRD reports are going to be standardised, accurate and comparable.
KEY ESG is a member of the XBRL International organisation and has been taking part in the XBRL ESG workgroup since 2021. Our data collection and submission platform automatically implements the XBRL digital tagging taxonomy so our customers don’t need to worry about it. To speak to one of our experts and get a demo of our CSRD compliance platform, request a demo here.
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