EFRAG Taxonomy takes the ESRS digital
Last week the European Financial Reporting Advisory Group (EFRAG) published the XBRL taxonomy to accompany the first set of European Sustainability Reporting Standards (ESRS Set 1), supporting the digital tagging of sustainability statements.
This new taxonomy marks a significant step towards enhancing transparency and comparability in sustainability reporting across the EU, enabling the widespread XBRL tagging of sustainability information. EFRAG has also published the XBRL Taxonomy for Article 8 disclosures, as requested by the European Commission (EC).
For now, XBRL tagging won’t be mandatory for filers – that step comes as the European Securities and Market Authority (ESMA) develops the accompanying Regulatory Technical Standards (RTS) for tagging the ESRS sustainability statement. The RTS will then be adopted by the EC as an amendment to the European Single Electronic Format (ESEF) regulations. Despite this, EFRAG are encouraging companies to adopt the taxonomy voluntary. A digital-first proactive approach will help companies get to grips with reporting requirements, and set up the necessary internal processes to ensure high quality sustainability disclosures from the get-go.
EFRAG’s followed a comprehensive public consultation process to create this taxonomy, during which stakeholders provided feedback that led to several key improvements. These include enhanced validation rules, more specific tagging elements, and a refined approach to dimensional modelling, all aimed at increasing the usability and accuracy of the reported data.
Patrick de Cambourg, Chair of the EFRAG Sustainability Reporting Board, highlighted the importance of this release, stating, “The final ESRS Set 1 XBRL taxonomy marks a major milestone in enabling machine-readable sustainability statements. It is a valuable tool for structuring disclosures and will significantly enhance their decision-usefulness.”
We would like to extend our congratulations to all stakeholders, technical experts, and the EFRAG team members who contributed to this significant advance in sustainability reporting and, (we know) were burning the midnight oil up to the last moment!
EFRAG invites stakeholders to explore the full suite of documents, including the detailed Explanatory Note, on its website and consider using the taxonomy ahead of its formal adoption.
For more information or to access the taxonomy packages and supporting materials, see here.
