We are excited to announce that EFRAG has published the final taxonomy set for the European Sustainability Reporting Standards (ESRS) and Article 8 disclosures under the EU taxonomy. This marks an important milestone as the ESRS taxonomy is now finalised, and we eagerly await the issuance of the Regulatory Technical Standards (RTS) from ESMA (European Securities and Market Authority).

The finalisation of the ESRS taxonomy is a crucial step toward the digitalisation of sustainability reporting, offering a clearer and more standardised approach to how companies will disclose their sustainability data.

ESRS Set 1 taxonomy implemented in Fanda XBRL Tools Software.

Key Enhancements in the Final Taxonomy

In response to feedback on the draft taxonomy, EFRAG has made several critical improvements:

Enhanced Validation Rules: The validation rules have been strengthened to ensure more accurate reporting.

Specific References Added: Each XBRL element and data point now has more precise references, including hyperlinks to ESRS texts, and classifications for mandatory/voluntary, phasing-in, and conditional data points. Previously, the draft taxonomy had numerous general references which lacked classification.

Improved Boolean Elements: Boolean elements have been refined for better clarity and usability.

Simplified Hypercube Tagging: The process for tagging tables (hypercubes) has been simplified, improving overall workflow.

Updated Narrative XBRL Elements: Narrative elements (text blocks) have been reviewed to eliminate duplicates, resulting in the exclusion of approximately 10% of tags.

In addition, EFRAG has released illustrative examples of XBRL reports as part of the taxonomy documents, providing practical guidance for implementation.

Encouraging Early Adoption

While digital tagging of ESRS reports will not be mandatory until the European Commission adopts the XBRL taxonomy as part of the ESEF RTS, EFRAG strongly encourages early implementation. Although it’s unlikely that digital ESRS tagging will be required for 2024 reports, the timeline remains unclear.

Preparing for the Future

We believe the best way to stay ahead of these developments is to start preparing now. That’s why we invite you to join our pilot ESRS projects, where we can work together to ensure a smooth transition to digital sustainability reporting.

Sources:

https://www.efrag.org/en/news-and-calendar/news/efrag-publishes-the-esrs-set-1-xbrl-taxonomy

https://xbrl.efrag.org/downloads/Feedback-Statement-ESRS-Set1-XBRL-Taxonomy.pdf

EFRAG finalises ESRS taxonomy: a step closer to digital reporting