Using XBRL for Interconnecting financial and sustainability (ESG) taxonomies
Structured digitalization of data to facilitate interconnectivity and usability of information throughout regulated disclosed publications, is of utmost importance in order enhance transparency and comparability of data, in line with the European union’s ambitions. Financial taxonomy has been used, over the recent years, to interconnect financial information of several regulated documents of the same nature, thanks to XBRL.
A white paper released by EFRAG* on the 14th of January of this year, is calling on the general public to give feedback, before the 15th of February, on the project of enabling the same XBRL technology to connect financial and sustainability (ESG) taxonomies. This integrated approach ambitions to create links between different indicators and give a clearer and more comprehensive reading to all stakeholders. Disclosed publications could then be analyzed not only from a financial profitability standpoint but also, from that of the sustainability lens. If such a technological feat is successful, navigation through these complex and bulky documents will undoubtedly be facilitated.
The XBRL certified French software provider, Pomelo-Paradigm, has designed and developed a software called Pomdoc Pro to assist issuers and auditors in creating that interconnectivity throughout their regulated disclosed financial documents. Current users of this software include several multinational companies as well as issuers who work on behalf of their clients, who are suject to the NFRD regulation. Pomdoc has integrated the European financial taxonomy and allows users to interconnect the digital data throughout their financial documents. This automated process has resulted in the massive diminution of errors due to reduced manual data entry as well as the promotion of collaborative work, as several departments can work simultaneously on the same document. To date, over 8948 documents have been edited using Pomdoc Pro, software which is entirely ESEF compatible.
Pomelo-Paradigm is at the forefront of the XBRL financial taxonomy interconnectivity and has the technological stability to integrate the ESG taxonomy when it becomes available.
Cecilia ANICETTE, Senior CSR and Sustainability Consultant
* European Financial Reporting Advisory Group