Implicit XBRL mandate here to stay for Swiss climate reporting
Digital climate disclosures are coming to Switzerland. Xenia Karametaxas, Sustainable Finance Policy Advisor to the Swiss State Secretariat for International Finance, spoke to independent analyst and investor Christian Dreyer CFA on Monday 16 October at Data Amplified 2023. She offered us a Swiss government perspective on the climate-reporting mandate due to come into force in just a few months, from January 2024.
As Xenia explained, while issuers can’t be restricted to a specific format due to Switzerland’s principles-based approach to regulation, there is an implicit requirement to use XBRL. The ordinance setting out the reporting rules requires the use of a reporting format that is both human- and machine-readable. XBRL is the only example of a format that meets that need – whereas PDF explicitly cannot be considered machine-readable within the meaning of the ordinance.
The Swiss requirements make it clear that corporates need to make climate disclosures in accordance with the TCFD framework, but the ordinance doesn’t oblige the use of a specific reporting standard. The assumption is that corporates will use ESRS or ISSB standards to underpin their reports. However, “machine readability was first order when we developed the ordinance, and it will not go away,” said Xenia. “We want comparable, reliable, science-backed data regarding climate issues. That is only possible if we stick to the highest standards possible.”
When it comes to climate decision-making, the Swiss government wants detail and not just high-level information, and machine readability is essential in being able to compare data. “We want to know where we stand, and where we are going.”
Because climate is a dynamic and rapidly changing situation, the ordinance is set for review in three years. The intention then is to incorporate an assurance requirement, and it is also expected that the threshold will be lowered to bring on more companies, from 500 to 250 full-time employees. Further possibilities include work on greater comparability with developing international standards, and more clarity on format.
One thing is clear: “there is no step back on machine readability.”
Xenia also expressed support for XBRL Switzerland’s plans to establish a standing working group of stakeholders to encourage climate reporting. This effort includes the ambition to develop and host a central repository for Swiss climate filings. Xenia noted the crucial role of such initiatives in driving progress and issuer participation – so we hope to hear more on that soon!
Connect with XBRL Switzerland via their website or LinkedIn.
