Draft European Sustainability Reporting Standards XBRL Taxonomy

Draft European Sustainability Reporting Standards (ESRS) XBRL Taxonomy approved

In the  European Financial Reporting Advisory Group (EFRAG) Sustainability Reporting Board meeting held on 10 January 2024, the draft ESRS XBRL Taxonomy report was approved (Source). Following the approval, the public consultations on the final ESRS XBRL Taxonomy are scheduled to begin in January 2024. 


The European Union has been creating and implementing groundbreaking corporate sustainability reporting regulations. This includes the EU Taxonomy [2], the Sustainable Finance Disclosure Regulation (SFDR) [3], and the Corporate Sustainability Reporting Directive (CSRD) [4], or how we call it, “The European Trinity”. 

The CSRD came into effect on 5th January 2023, and it became applicable from 1 January 2024 for companies that were already reporting under the Non-Financial Reporting Directive (NFRD). Companies that are subject to the CSRD will be required to report their corporate sustainability performance (CSP) using the  European Sustainability Reporting Standards (ESRS). Read more about CSRD and ESRS here

Digitisation is one of the key mandates of CSRD, which says that “A digital taxonomy for the Union sustainability reporting standards will be necessary to allow the reported information to be tagged in accordance with those sustainability reporting standards.” 

It further states that the digital taxonomy should align with the other initiatives like “A European strategy for data”, “Digital Finance Strategy for the EU” and complement the creation of a European single access point (ESAP) for public corporate information. Read more here

The CSRD’s Chapter 6b titled “SINGLE ELECTRONIC REPORTING FORMAT” mentions that “Undertakings subject to the requirements of Article 19a of this Directive shall prepare their management report in the electronic reporting format specified in Article 3 of Commission Delegated Regulation (EU) 2019/815) and shall mark up their sustainability reporting, including the disclosures provided for in Article 8 of Regulation (EU) 2020/852, in accordance with the electronic reporting format specified in that Delegated Regulation.” Read more here

The CSRD clearly defines the scope of EFRAG, which has been mandated with creating the draft ESRS and the Digital Taxonomy, which includes both the ESRS XBRL Taxonomy Article 8 XBRL Taxonomy.

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What is XBRL Taxonomy? 

For the uninitiated, XBRL stands for eXtensible Business Reporting Language, which is a family of specifications used for digital business reporting. It is the open international standard for digital business reporting, managed by a global not for profit consortium, XBRL International and is used around the world, in more than 50 countries (Source). Also known as the “bar codes for reporting”, XBRL allows unique tags to be associated with reported facts. In the XBRL lingo, a taxonomy links and defines a number of taxonomy components that provide the meaning for facts in an XBRL report (read more here). The key objective of using XBRL is to enhance the human-readable reports to machine-readable reports. 

Another key reporting requirement is the European Single Electronic Format (ESEF), which is the electronic reporting format in which issuers whose securities are admitted to trading on EU regulated markets must prepare their annual financial reports. The European Securities and Markets Authority (ESMA) develops the regulatory technical standards (RTS) which specify this electronic reporting format as well as guidance and implementing tools (Source).

Highlights of the Draft ESRS XBRL Taxonomy

In April 2023, EFRAG published the draft ESRS XBRL Taxonomy Methodology and Architecture Issues paper. In the paper, EFRAG identified three different types of data points: 

  1. Numerical, quantitative data points (metrics); 
  2. Non-numerical but comparable types (also called “semi-narrative”); 
  3. Narrative types (text blocks). 

As the draft paper explains, these data points are then categorized based on comparability into A, B and C-categories. The data points categorized as category A result in a high level of direct comparability, while the elements in category B can be easily tagged and provide a high level of direct comparability. Narrative disclosures, mainly text blocks, are classified as category C. In general, due to the nature of category C data points, the level of direct and automated comparison is lower than category A and B. The table below provides an overview of the types of data types and categories.  

Data point type  Level of direct comparability between companies  Usability as separate information  Category
Numerical data points (metrics), like GHG Emissions, Headcount, Water consumption, etc. High High A
Monetary Data Points High High A
Percentage Data Points High High A
Boolean (Yes/No) H High High B
Enumeration Elements (Drop-Down), including multiple-choice  High Medium B
Dates High High B
Short unformatted narrative disclosures (strings) Medium Low B
Narrative disclosures (text blocks) Low Low

The draft paper provides a detailed explanation of the architecture including “Level of Nesting” (LoN) and “Level of Separability” (LoS), but can be too technical for which may not be relevant for most users. The draft ESRS XBRL Taxonomy Methodology and Architecture Issues paper can be downloaded here. A presentation on the topic can be accessed here

Next Steps

As the Draft ESRS XBRL taxonomy and the supporting materials have been approved by the EFRAG Sustainability Reporting Board (SRB), the public consultation is scheduled to start for a 60-day period in January 2024.  After the finalization of the ESRS XBRL Taxonomy and Article 8 XBRL Taxonomy, EFRAG will hand over the taxonomies to the EC and ESMA, for further implementation.

About NordESG

NordESG is an advisory firm helping corporates develop, articulate and execute their ESG and sustainability strategies. Our work includes sustainability performance reporting support under various ESG frameworks, strategy development or conducting materiality assessments. By doing so, we help businesses meet their disclosure compliance requirements like CSRD but also help them proactively communicate their strategy to other stakeholders like investors, customers and local communities in which they operate. Our work is focused mainly on Europe and North America.

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