XBRL US submitted a comment letter in response to the SEC proposal on The Enhancement and Standardization of Climate Related Disclosures for Investors. Our comment letter supported the proposal requirements to prepare ESG data in Inline XBRL format to improve the consistency and usability of reported data. Key points raised in the letter include:
- Academic studies demonstrate that ESG disclosures do affect investors and therefore should be mandated by the SEC.
- The need for global regulators to adopt a single, widely used standard, potentially with some region- and industry-specific extensions is critical to produce comparable, useful data and to minimize the burden of reporting and data extraction.
- We encourage the Commission to allow companies to use XBRL-tagged custom extensions as an important feedback loop that can be reviewed, analyzed and potentially incorporated more easily, because of its machine-readable form.
- We support the use of Inline XBRL, as proposed, to enable easy commingling of ESG data with financial performance data, to harmonize with global ESG standards now being established by the ISSB, and to minimize the burden on the reporting ecosystem.