The law also incorporated the OPEN Government Data Act, which requires all non-sensitive government data to be made available in machine-readable formats which includes financial data using global standards like XBRL.
Why is the reporting of non-financial information and the management of non-financial risk becoming so important to investors?
More than 2/3 of the world’s capital markets are using the IMA supported XBRL global structured data format for both financial and nonfinancial disclosures. More than 100 regulators in more than 70 countries have mandated the use of XBRL for financial and business reporting which includes financial, tax or government data used to drive both the capital markets and government services
Including both financial and non-financial information is known as "integrated reporting" by public companies. Currently the US Securities & Exchange Commission isn’t even allowing voluntary filing of non-financial data to be included with financial reports by public companies. US GAAP does not include non-financial accounting metrics. Key question in the United States: will the capital markets stay relevant to meeting both the needs of investors and the public if this non-financial information is not disclosed and/or the accounting standard bodies don’t recognize non-financial data from an accounting perspective?
Use of XBRL for Sustainability Disclosures to Match Financial Data Disclosures to Support Machine-Readable Data Formats for Better Transparency and Accountability: XBRL is a global standard developed to enhance transparency and accountability and this same standard can be used for other non-financial disclosures like ESG reporting
Great article in Fed Scoop about new legislation being introduced in Congress that would take the XBRL global data standard -- created by the accounting profession -- and build-out across all federal financial agencies for better transparency and accountability
The US SEC Chairman is urging public companies to disclose human capital in addition to financial data. Role of the Management Accountant: What role will management accountants play in this new area of corporate disclosure Can management accountants help companies provide this additional data to the capital markets?
The report also noted that unlike the financial data that is disclosed by a company – the climate change data is not reviewed by an external, independent auditor
Over the years the IMA has championed the use of XBRL as a machine-readable data format for financial reporting to promote greater transparency and accountability to support economic growth and new jobs in the capital markets
Likewise, companies have increased their commitments to ESG: Ceres research shows that among that 600 largest public companies, “nearly two-thirds have commitments to reduce greenhouse gas (gHg) emissions, half are actively managing water resources and nearly half are now actively protecting the human rights of their employees by disclosing human capital data in its financial statement reports as well