Using Topic Maps for Sustainability Reporting

In this paper we propose a solution of how to publish and visualize Internet-based sustainability reports. After the Global Reporting Initiative (GRI) published the final version of the third generation of GRI-guidelines more and more organizations start to publish sustainability reports on their Internet sites. But these reports are split by environmental topics. Readers are confronted by an in-formation flood without understanding the relationships between all topics in an organization. With the usage of the eXtensible Business Reporting Language (XBRL) we propose a solution of how to transform sustainability reports into Topic Maps (XTM). 1. The eXtensible Business Reporting Language (XBRL) The eXtensible Business Reporting Language (XBRL) is a standard primarily pushed by the American Institute of Certified Public Accountants (AICPA), the largest professional organization of Certified Using Topic Maps for Sustainability Reporting 2 Public Accountants (CPAs) in the United Stated of America. Normally financial information will be stored different in companies. E.g. much of the same financial information in headquarters and its subsidiaries will be stored. But the granularity and the formats of all financial information are different. That's why it makes it hard to exchange this information between these organizations. While using standards of the approved eXtensible Markup Language (XML) the XBRL standard gives shareholders, banks, investors, or other interested parties the possibility to exchange financial reporting in all its different procedures. These reporting can easily delivered via networks and analyzed with common software products. In contrast to similar exchange formats which follows the same goal (Research Information Exchange Markup Language (RIXML), Markup Language for the Financial Information eXchange (FIX) Application Message Layer (FIXML), Market Data Definition Language (MDDL), or Open Financial Exchange (OFX)) the XBRL standard can be described as the state of the art standard to exchange financial information and is mainly by international companies. Additionally XBRL is the most widespread format in the North America. XBRL specifies the syntax of a report and can be defined as a number of report concepts as well as its respective contents (XBRL 2006a). Both will be separated into instances and taxonomies (XBRL 2006b). An instance file uses xlinks (eXtended links, W3C Xlink 2001) to corresponding taxonomy files which consists of a W3C XML Schema modeling descriptions. Depending on which taxonomy is used these files have the following content: • Labels: A label gives the element in an instance a name. Additionally, while using attributes to corresponding foreign languages and labels, XBRL is able to display instances polyglot. • References: A reference linkbase gives XBRL users the possibility to add information to a label. For example a label can be explained better via a linkbase to its corresponding paragraph or to external descriptions. • Definition: This linkbase is used to bring all different labels into a hierarchical order so that a father-child or child-father relationship can be build up. E.g. this definition linkbase offers the possibility to display sub-instances or subtotals. Using Topic Maps for Sustainability Reporting 3 • Presentation: The presentation linkbase orders child elements in a better granularity. While using the definition linkbase for father-child relationship this linkbase specifies brother-sister relationship. • Calculation: It is the heart of the taxonomies linkbases and contains information about indicator relationships between its corresponding elements. This expression of semantic meaning can also be used to model semantic connections (Binstock 2005). All taxonomy files in sum give instance files the possibility to display its content in the right format at the right place (XBRL 2006c). A set of specific taxonomy files is also called Discoverable Taxonomy Set (DTS). Compared to the XBRL specification taxonomies can be separated into three levels: recommended taxonomies must have the same official status of the XBRL specification itself. Approved ones are taxonomies which are compliant the XBRL specification and have been developed by the XBRL interest group. In contrast acknowledged taxonomies are taxonomies which are used compliant to the XBRL specification but are developed by other interest groups. 2. The Standardization in Sustainability Reporting Sustainability reports can be described as a development of environmental reports. They contain information about a sustain development of the specific organization. After financial reports sustainability reports are one of the most important possibilities to distribute information about an organization. Special global acting organizations use this possibility to perform social respective duties. It is also a possibility to establish an additional marketing tool for an organization. Sustainability reports are based on the three pillars environmental, social and economic performance and describe each pillar and existing interrelations between effected pillars. Sustainability reports have been most influenced by the Global Reporting Initiative (GRI), a non-governmental international organization launched in 1997 as a joint initiative of the Coalition for Environmentally Responsible Economics (CERES) and the United Nations Environment Programme (UNEP). The GRI describes its vision “that reporting on economic, environmental, and social performance by all organizations becomes as routine and comparable as financial reporting.” Practically this will be done by distributing global Using Topic Maps for Sustainability Reporting 4 applicable guidelines. (Morhardt 2002) expects that “its guideline will become the de facto standard for sustainability reporting worldwide.” With the help of an international network from all kind of business and civil society the third generation (G3) of guidelines has been released and changed after the GRI G3 conference from a former “draft version” to a “ready for use” one (GRI 2006). The G3Guidelines can be divided into three main parts: Part 1 defines report content, boundary, and quality, while Part 2 describes standard disclosures. Part 3 contains general reporting notes. 2.1 G3-Guidelines Part 1: Defining Report Content, Quality, and Boundary Part 1 contains ten basic topics which should be included into a sustainability report. These topics form the basic of the report and can be described the essentials of a report: 1. Stakeholder inclusiveness: All stakeholders inside and outside of an organization should be identified and mentioned in the report. The organization has to concentrate on these stakeholders and their feedbacks. 2. Materiality: All topics and indicators which effect economic, environmental, and social impacts or stakeholders decisions should be reported. Additionally materiality describes at which threshold topics and indicators should be reported. 3. Sustainability context: To get a better overview of an organization and its sustainability the report should describe topics and indicators in wider context of sustainability. Interrelations between sustainability topics and non-topics become clearer. 4. Completeness: The organization must report all material which influences the economic, environmental, and social performance. With completeness all its boundaries, scopes, and time periods should be declared. 5. Balance: Reports should include all, positive and negative aspects of the organization. Only this guarantees a non-biased view of the organization. 6. Comparability: The reporter has to maintain consistency in boundary and scope of its reports, disclose any changes, and re-state previously reported information. 7. Accuracy: Following the accuracy principle the reporter reduces errors to a minimum while concentrating on a high degree of exactness. That Using Topic Maps for Sustainability Reporting 5 means stakeholder will make prompt decision because they trust these information. 8. Timeliness: Reports should be published frequently in a fixed period. Normally both, the stakeholders “timetable” and the schedule of the information should be respected and inline. 9. Clarity: To reach the highest level of credibility the published sustainable report describes all processes, procedures, and assumptions in an understandable and accessible way. 10. Reliability: Reported information should be gathered, recorded, compiled, analyzed, and disclosed in a way that would resist every examination, internally and externally. 2.2 G3-Guidelines Part 2: Standard Disclosures Part 2 mentions basic content which should appear in a sustainability report: 1. Strategy and Analysis: Sustainability reports must include a statement of the representatives of an organization e.g. the chief executive officer (CEO). The representative should describe the key impacts, risks and chances which are involved in the publication of the report. 2. Organizational Profile: Various information about an organization must be submitted to the report. On the one hand regional, national and international roles should not been missed, on the other hand meta information like the name of the organization, the brands, products and services should been added. 3. Reported Parameters: This guideline is split into 4 parts: the report profile requires information about reporting dates, the cycles of the report, or contacts for questions or feedbacks. The “Report Scope and Boundary” part clarifies which information is reported and to which persons these information are addressed. While describing e.g. data measurement techniques in this part the report is able to show its content and its boundaries. The third part, named “GRI Content Index”, describes how a certain report refers to the G3-guidelines. The last part “Assurance” describes internal and external assurances for the sustainability report. 4. Governance, Commitments, & Engagement: “Governance”, the first part of this section, formalizes the policy, responsibilities, and competencies of the organization. The “Commitments to External Initiatives” presents an overview about the non-organizational/external social, economic and environmental initiatives of the reporters. The last part “Stakeholder EnUsing Topic Maps for Sustainability Reporting 6 gagement” enumerates all stakeholders engagement beside during the reporting period. 5. Management Approach and Performance Indicators: The last part of the standard disclosures includes economic, environmental and social indicators, its management approach and a description of the used performance indicators. The social indicators can be categorized e.g. by Human Rights or Society, the economic indicators impact on the economic conditions, while the environmental indicators impacts e.g. on living and non-living natural systems, including all ecosystems. 2.3 G3-Guidelines Part 3: General Reporting Notes The G3-Guidelines finalize with general reporting notes. It includes advices of how to gather data, the report form and its frequency, and advices of how to choose assurances.