The Economist asks whats ahead in '08 for sustainability reporting

I was quite honored this week when a reporter from The Economist contacted me to ask what I thought might be coming down the line for sustainability reporting in 2008. They are gearing up for their "Year Ahead: 2008" annual issue to be released in the next few weeks and I think its a great sign that they were researching sustainability reporting. Researching it doesn't mean that the topic will actually make it into the issue - but I still took it as a great sign!

Here was how I responded when asked for my perspective on interesting developments for 2008:

• The rise of sustainability reporting through supply chains. GRI is working with four multinationals right now as they roll out reporting among suppliers in ‘high risk’ emerging markets – ie. places where human rights, environment, corruption, or product responsibility issue are prone to arising mainly due to lack of legislation or enforcement in certain countries – reporting is one way for global companies to have more control and confidence in the conduct of their suppliers – which they are being called to account by investors and consumers. We will see a marked increase in B2B reporting and smaller enterprise reporting due to information demands in the supply chain in 2008.

• A marked increase in reports out of Russia and India to combat negative assumptions in the international community about corruption, labor standards, governance practices, and environmental impacts. Early movers, such as Jubilant Organisys in India, have been rewarded for reporting on these issues by being able to attract international capital and by being competitive in international acquisitions. This is helping to set the stage for others to follow.

• The US responsible investment community has mounted a campaign to increase the quantity and quality of sustainability information available for data analysis and decision making. Their goal is to have all 100 of the S&P 100 reporting based on the GRI Guidelines by 2008, if they achieve this they will move on to the S&P 500 by 2011. As per early 2007 they had noted a 20% increase in S&P company GRI reporting – accounting for about 50% of the S&P 100. At this rate they will achieve their ambitious goal of all 100 S&P companies issuing GRI reports by end of next year.

• XBRL on the rise? The financial reporting community has been toying with XBRL as a way to exchange data for the past few years, interest at the SEC is helping to fuel this – the GRI Guidelines are now available in this format. Will this have an impact on the volume, accessibility, comparability, and demand for information in the marketplace in 2008?

• Climate change and human rights emerging as main stream agenda issues that companies are expected to be doing something positive about. Accountability, transparency and reporting on these issues will become expected and will drive increased numbers of reports issued in 2008.

XBRL Taxonomy for G3

Guest blogger: Debbie Dickinson

GRI today released its XBRL taxonomy for the G3 Guidelines. Don’t switch off yet! And yes, I hear you saying it “what does all that mean?” I myself have sat many a-time with Sean Gilbert, our technical director who worked closely with PwC to develop the taxonomy. His patience means I think I finally get it.

Basically, XBRL –eXtensible Business Reporting Language – is way to exchange data. It’s been used for ages in financial reporting systems, and involves “tagging” data. This means that when you go looking for a piece of data, you can search for it and retrieve it via the “tag”, rather than by sifting through reams of spreadsheets, pdfs, documents, web pages etc. XBRL is really set up for exchanging data electronically, between computers.

It’s proven really successful in the financial reporting world. Some say even “revolutionized” the way that businesses report.

For sustainability reporting, the release of XBRL is a huge, positive step. It means we’re moving so much closer to easily comparable reporting. Organization have (and, I believe, rightly so) developed such different styles of disclosing their performance, depending on their needs. But this means it’s sometimes been a lot of work for analysts, employees, stakeholders and other report users to find the exact disclosure item they’re looking for. Now with the XBRL taxonomy, it will be easier to overcome these obstacles and move to more efficient data distribution (for companies) and collection (by investors and other report users). Many tip that XBRL will also reduce questionnaire fatigue.

The moment where I really started to understand XBRL was when Sean (our technical director) told me a little story “imagine two kids drawing, each with their sets of 64 Derwent pencils in front of them (the joy!). One says to the other ‘can I borrow your red pencil color #234’. The other knows exactly which red pencil to hand over; and there is no confusion between either kid as to which shade of red is requested.” So the color numbers are the tagged pieces of sustainability information, and now there’s no confusion between report users and makers about which pieces of economic, environmental and social data are in question.

Find out more about the newly released XBRL taxonomy, developed in collaboration with XBRL experts from PriceWaterhouseCoopers.

Still unsure what it’s all about? Follow the link to “leave your comment” and post your questions here