Deloitte: XBRL taxonomy for sustainability reporting piloted in UAE

As the Gold sponsors of the event, Deloitte global leaders came together to reveal the taxonomy, that will enable companies to tag their sustainability data in reports, thus helping auditors and investors to access and compare GRI data more efficiently.

Currently, XBRL is being piloted for publicly listed companies by the Emirates Securities & Commodities Authority (SCA). In 2012, it is expected to attract large Enterprises, Government Agencies from the UAE, GCC and other Middle East countries, along with a significant international representation.

"Benefits of XBRL for business reporting are numerous, as the system creates a standards-based method which users can prepare, publish in a variety of formats, exchange, and analyze financial statements and business information," said Hassib Jaber, Technology consulting leader Deloitte in the Middle East.

"XBRL also offers a common language for data exchange providing cost savings, greater efficiency and improving accuracy and reliability to all those involved in supplying or using financial data," he added.

XBRL is the term used to define the language for the electronic communication of business and financial data, which has been credited for revolutionizing financial reporting, by updating the process which business data is transferred and reported globally. It is a royalty-free open specification, developed by XBRL International Inc., a not-for-profit consortium of over 600 leading companies from around the world, including Deloitte.

Deloitte and GRI's agreement covers the publication of XBRL taxonomy, covering the GRI's G3 and G3.1 reporting guidelines. This taxonomy will help companies improve the quality and reliability of their sustainability performance data.

XBRL has been compared to the impact of barcodes on merchandising - both platforms share a system for coding and decoding information. It provides an identifying tag for each individual item of data, thus enabling automated processing of business information by computer software, allowing data to be treated 'intelligently'. In turn, this system greatly increases the speed of handling financial data, reduces the chance of error, and permits automatic checking of information.

Why XBRL now?

For many years, momentum has been building toward a fundamental shift in business reporting. Across the board, regulators, investors, capital markets and companies have all been part of the movement, with the aim to simplify and standardize reporting, both financial and non-financial, so it can be absorbed globally. In comparison, the rise of digitization, information standards and the internet have allowed consumers and businesses to customize the information they want and view it in a format that is preferable to them. In the same light, XBRL provides the framework to support the effective exchange of documents and data across applications, platforms and the internet.

"The worldwide stage is being set for the broad adoption of XBRL as the accepted information standard for financial and business data. Adoption of XBRL by companies will be driven by growing demand in the capital markets for data, and by companies discovering XBRL's utility and value in more efficient and effective management of their businesses," said Jaber.

XBRL adoption will continue to accelerate. As adoption increases, data will be more easily consumable and more widely available. In 2011, the increased use of XBRL by global companies was widely seen. As a result, greater transparency will likely be required in order for companies to stay competitive in the global markets as well as to manage their businesses effectively.