Publishing a CSRD report: what is iXBRL and tagging?

Tagging involves assigning unique identifiers, or 'tags,' to specific data points in financial and sustainability reports. These tags link to definitions within a standardised taxonomy, such as the CSRD taxonomy, ensuring data is consistently interpretable and comparable across reports.

By tagging information, it becomes automatically readable by software. This enables banks, governments, and other stakeholders to quickly and efficiently analyse sustainability performance, compare organisations, and make informed decisions based on this data. It enhances transparency and promotes more sustainable business practices.

Let’s look at an example. Consider a statement from a sustainability report about an organisation's total greenhouse gas emissions. We’ll compare how this statement appears without iXBRL tagging and then how it looks when properly tagged.

Without a tag: 
"In 2023, our company reported total greenhouse gas emissions of 50,000 tonnes of CO2 equivalent."

This statement is human-readable but difficult for software to process automatically.

With an iXBRL tag:
"In 2023, our company reported total greenhouse gas emissions of <ix:nonFraction contextRef="FY2023" unitRef="tonCO2e" name="ghg:TotalGHGEmissions" scale="0">50000</ix:nonFraction> tonnes of CO2 equivalent."

The italicised section added here is the "tag." While invisible to human readers, it enables banks, governments, and other stakeholders to automatically analyse the report using software.

Broadly speaking, there are two groups of organisations that must comply with the CSRD:

1. Listed Companies: These entities are already subject to the European Single Electronic Format (ESEF) and the Non-Financial Reporting Directive (NFRD). They are the first required to adhere to CSRD reporting obligations, applicable to annual reports for financial years starting on or after 1 January 2024.
2. Large Companies: Organisations meeting at least two of the following criteria must comply with CSRD obligations for annual reports covering financial years from 1 January 2025:
   • Annual turnover exceeding €50 million.
   • Balance sheet total over €25 million.
   • More than 250 employees.

It's advisable to conduct a shadow report a year in advance, following CSRD guidelines, to ensure all necessary information is available and processes function correctly.

All relevant data points from the European Sustainability Reporting Standards (ESRS) must be tagged. This includes both qualitative textual information and quantitative data, such as figures and percentages, that provide insight into an organisation’s sustainability performance.

The definition of "relevant" data points varies by organisation. Some are mandatory for all organisations, while others depend on an analysis the organisation conducts in collaboration with its stakeholders. This analysis is called a "double materiality analysis." In this process, you identify which sustainability aspects are relevant to your organisation because:

• The organisation poses a threat to the environment in that area, or
• The sustainability aspect represents an opportunity or risk for the organisation's operations.

Our solution, iwink.report, offers comprehensive support for organisations required to comply with the CSRD:

• Complete CSRD Taxonomy: iwink.report includes the entire CSRD taxonomy, enabling users to easily locate and apply all relevant tags for their reporting.
• Tagging Capabilities: Our platform allows users to efficiently tag their sustainability information, supporting both textual and numerical data.
• iXBRL Viewer: With the built-in iXBRL viewer, users can review and verify their tagged reports before publication.
• Export to iXBRL Package: iwink.report generates an iXBRL package that meets all requirements from regulatory bodies such as ESMA and EFRAG, ready for publication.

The final output of iwink.report includes an online annual report, an optional formatted PDF, and a .zip file—the iXBRL CSRD package—that contains all tagged information and is ready for publication on the organisation's website. This ensures a streamlined process that complies with the latest reporting requirements.

With the introduction of the CSRD and the requirements for iXBRL tagging in reports, it’s clear that traditional methods such as Word, PDF, and InDesign are no longer sufficient. Organisations must adapt to the new digital standards, and software like iwink.report provides the tools needed to meet these standards and ensure a smooth transition.