The Launch of GRI’s New XBRL Taxonomy: A Step Forward in Sustainability Reporting

In June 2024, the Global Reporting Initiative (GRI) announced an exciting development that promises to shape the future of sustainability reporting: the launch of a public consultation on their new GRI Sustainability Taxonomy draft. This initiative marks a significant step towards enhancing the precision, usability, and interoperability of sustainability data, aligning it with global digital reporting standards. In an interview with XBRL International, Piers Horner, who led the development of the taxonomy, shared insights into the goals, potential impacts, and future direction of this groundbreaking project. This blog delves into the details of the new GRI XBRL Taxonomy and its implications for sustainability reporting.

GRI has long been a pioneer in sustainability reporting, providing a framework that enables organizations to report on their environmental, social, and governance (ESG) impacts.

Taxonomy is a digital tool that translates the GRI Standards into a structured format, allowing for consistent, machine-readable sustainability disclosures. This move aligns with the broader trend towards digital reporting, where data can be easily accessed, compared, and analyzed by stakeholders, including regulators, investors, and the public.

The consultation phase is a critical period for refining the GRI Sustainability Taxonomy. According to Piers Horner, the primary goal is to ensure that the taxonomy accurately reflects the GRI Standards and meets the needs of its diverse user base. This includes not only those who are familiar with GRI but also sustainability disclosure experts and XBRL professionals who can provide valuable feedback on the taxonomy’s functionality.

One unique aspect of the GRI taxonomy is its ability to disclose omissions—situations where specific information may not be available or applicable. This feature sets it apart from other taxonomies and requires careful consideration to ensure it is both effective and user-friendly.

Horner emphasized the importance of making the taxonomy accessible and intuitive for disclosure specialists and software vendors. The feedback gathered during the consultation will be instrumental in developing clear guidance and ensuring that the taxonomy is as user-friendly as possible.

XBRL (eXtensible Business Reporting Language) is a global standard for exchanging business information, and its integration into GRI’s framework is a significant advancement. The adoption of XBRL for sustainability reporting offers numerous benefits, including improved data accuracy, comparability, and transparency.

The GRI Standards are widely used across the globe, and the ability to publish sustainability information in XBRL format will have far-reaching implications. As sustainability reporting becomes increasingly mandated by regulators worldwide, having a digital taxonomy that aligns with these requirements is crucial. The GRI Sustainability Taxonomy will serve as a digital reference, ensuring that organizations can report consistent and reliable data that meets the expectations of regulators and stakeholders alike.

A key feature of the new GRI Sustainability Taxonomy is its interoperability with other major reporting frameworks, particularly those of the IFRS Foundation and the European Financial Reporting Advisory Group (EFRAG). This interoperability is essential in today’s rapidly evolving reporting landscape, where organizations are often required to comply with multiple reporting standards.

Horner highlighted the importance of harmonizing global reporting systems to reduce the reporting burden on organizations. By ensuring that the GRI taxonomy can complement other frameworks, GRI is helping organizations leverage their existing sustainability reporting efforts to meet various compliance requirements without sacrificing the granularity or scope of their disclosures.

This effort towards interoperability also supports the development of a global reporting system that enables organizations to report effectively on their sustainability-related impacts, risks, and opportunities. Over time, this harmonized approach will contribute to a more comprehensive and cohesive global reporting ecosystem.

Following the consultation phase, GRI plans to release the final version of the Sustainability Taxonomy in Q3 2024. This release will be accompanied by the development of a filing portal and a webform, which will enable organizations to report smaller sets of information digitally. These tools are expected to be ready for use at the start of 2025, marking the beginning of a new era in digital sustainability reporting.

GRI also has plans to continue enhancing the taxonomy by integrating new GRI Standards and working closely with EFRAG to support the development of the European Sustainability Reporting Standards (ESRS). These ongoing efforts will ensure that the GRI Sustainability Taxonomy remains a relevant and powerful tool for organizations worldwide as they navigate the complexities of sustainability reporting.

The launch of the new GRI Sustainability Taxonomy represents a significant milestone in the evolution of sustainability reporting. By digitizing the GRI Standards and aligning them with global reporting frameworks, GRI is paving the way for more accurate, comparable, and transparent sustainability disclosures.

The public consultation phase offers a valuable opportunity for stakeholders to contribute to the refinement of this taxonomy, ensuring that it meets the needs of the global reporting community. As we move towards a future where sustainability reporting is increasingly mandated and scrutinized, the GRI Sustainability Taxonomy will play a crucial role in helping organizations deliver high-quality, consistent sustainability data.

With the final release scheduled for Q3 2024 and the rollout of supporting tools in early 2025, the GRI Sustainability Taxonomy is set to become an indispensable resource for organizations committed to sustainability and transparency.