Support & Suggestions for Digital Climate Reporting at the SEC
July 1, 2022
The US Securities and Exchange Commission (SEC) has now closed the comment period on its proposal on enhancing climate-related disclosures, which promises to introduce digital reporting requirements for all US public companies. As we write in our response letter, the proposal is “timely and sought by the investment community. It comes at a time when comparable, high quality, audited, and digital disclosures in this field are essential for investors, regulators and policy makers, together with a wide range of other stakeholders.”
XBRL International, of course, strongly supports the use of Inline XBRL, emphasising that the relatively rapid shift to mandatory, audited climate disclosures must also be digital. In our view, the benefit to users in providing direct, digital climate data far outweighs the cost. Indeed, US issuers are both accustomed to and adept at preparing Inline XBRL disclosures, such that “the marginal cost associated with this tagging is likely to be immaterial against the broader costs for issuers associated with the rigorous sourcing, management and control over these disclosures. Failing to ensure that this information is in digital form would greatly reduce the utility of these proposals overall.” It is particularly important to ensure that climate data can be combined in analyses with financial data, currently provided in Inline XBRL.
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