2024 in review: taxonomies, AI and the central importance of structured data
2024 has been the year of sustainability taxonomies: we’ve gone from zero to (almost) three major taxonomies available. In all three cases, it is expected that disclosures will be in Inline XBRL. May saw the publication of the first IFRS Sustainability Disclosure Taxonomy, developed by the IFRS taxonomy team as the digital twin of the the International Sustainability Standards Board’s (ISSB) initial standards. It provides a shared global dictionary for digital sustainability reporting using the ISSB’s first two standards, IFRS S1 and S2.
In September followed the publication by EFRAG of its ESRS Set 1 XBRL Taxonomy, supporting digital disclosures under the first set of European Sustainability Reporting Standards. The taxonomy was used by the European Securities and Market Authority (ESMA) to develop its Regulatory Technical Standards, published last week and now out for consultation until March – look out for our thoughts and response next year: if the EU wants to expand its Capital Markets Union it must get serious about digital disclosure.
Meanwhile, GRI published and consulted on its draft Sustainability Taxonomy over the summer, with final publication expected very early in the new year.
The meteoric progress being made on sustainability reporting is unprecedented, and we continue to be positively impressed by the widespread digital mindset and commitment to digital-first approaches among standards setters. There will be bumps in the road ahead, but the direction of travel is clear. India is already collecting mandatory sustainability disclosures, unlocking decision-useful insights – and 2025 will see digital data available from more countries, with the power to really demonstrate what digital disclosures can do in the sustainability space.
For many of us, 2024 has also been the year of AI, with AI tools becoming established in many areas of our everyday lives, and risks and opportunities coming into sharper focus. It’s increasingly clear that none of us can afford to ignore AI’s potential to transform both data analysis and the reporting process itself. AI was a hot topic at Data Amplified 2024, held in Madrid in November.
One theme that was repeatedly and consistently made clear at Data Amplified – and indeed throughout the year – was the paramount importance of digital, structured data in driving pivotal new fields of endeavour. Digital reporting is essential if we are to make effective use of sustainability data to understand, monitor and improve performance on sustainability goals. Digital reporting is indispensable in providing high-value structured inputs to AI models and leveraging their full analytic power. Digital reporting – and the ongoing advances in the XBRL standard – are crucial for regulators as they seek to collect, manage and understand increasing amounts of data, navigate a complex risk landscape, and meet users’ data needs, all while streamlining burdens for issuers.
The work of our community remains as vital, as urgent and as exciting as ever – and we look forward to continuing it together in 2025.
