This is the first installment of a four-part interview.

1. Could you give readers an overview of XBRL CH as an organization, including its origins, members, and objectives?

The organization was formed in early 2008 to address the blank space on the XBRL world map that was Switzerland. Our mission is to promote awareness of the standard in our jurisdiction, and to facilitate projects. Notably, we have just started the process of raising our status at XII from provisional to established jurisdiction.

XBRL CH is a grassroots effort of a number of enthusiastic individuals, and in that it is typical of Switzerland in many respects. By that I mean we did not have the usual backing of some government or accounting authority to start with, “just” the support and founding membership of Credit Suisse, the local CFA society, and others, for which we are very grateful. While this lack of authority slowed us initially, we can now draw on the legitimacy given by a broad membership base from all walks of life: auditors, analysts, academia, investor relations, software vendors, service providers, educators, and individuals. Recently we have been able to win both KPMG and PwC as new members. SIX Exchange Regulation and FINMA are watching developments closely as formal observers, and tax authorities have become interested in what XBRL can do for the efficiency of their processes.

2. A working group of XBRL CH is currently developing an XBRL taxonomy for the financial reporting (FR) regulations of the Swiss Code of Obligations (OR). Could you provide some details on the taxonomy and give us an update on the WG’s progress?

The taxonomy is now available in draft for public comment. In line with the rather minimal requirements of OR accounting, it is simple and small in terms of number of concepts – it’s a feature, not a bug. Plus it contains terminology labels for all concepts in almost all the official languages of our small country (i.e., German, French, Italian. Still missing is Rumantsch – any Rumantsch accountants out there?). Actually, I should speak of taxonomies, since we have also created a GCD (Global Common Data) taxonomy to go with the OR taxonomy. This has been adapted to Swiss idiosyncrasies.

It’s important to recognize that OR accounting is mostly used by a large number of privately held SMEs. Contrary to public perception, these SMEs are the backbone of the Swiss economy. The purpose of the OR taxonomy is to serve as a strategic enabler for the large-scale deployment of XBRL in the SME space, where auditors, banks, fiduciaries, accountants, and tax authorities have an interest in enhancing their process efficiencies.

Harvard Business School recently held the 2010 Workshop on Integrated Reporting to encourage the trend of combining financial and nonfinancial information — especially measures of environmental, social, and corporate governance (ESG) performance — in a single company report. The Landscape of Integrated Reporting: Reflections and Next Steps, an eBook available for free online, collects the thoughts and views of the workshop participants.  Two of the essays — by Maciej Piechocki and Olivier Servais, and by Brad Monterio and Liv Watson — specifically address the role of XBRL in facilitating integrated reporting.

Company reporting of ESG — also known as corporate social responsibility or sustainability reporting — is making steady progress, at least among the world’s largest firms. According to the most recent KPMG Survey on Corporate Responsibility Reporting, nearly 80% of the world’s biggest companies issued corporate responsibility reports in 2007/2008, up from 50% three years earlier. More than three-quarters use GRI Guidelines for their reports. However, most companies still present ESG information in stand-alone reports, with perhaps a summary in a separate section of the company’s annual report. Only 3% of companies “fully integrate” corporate responsibility reporting with financial reporting in their ARs. (There’s a nice chart on page 16 of KPMG’s survey that shows the breakdown of stand-alone versus fully integrated reporting of companies by country.)

Already the emerging global language for financial reporting, XBRL now is gaining traction as a standard for nonfinancial information as well. In their essay “The Role of XBRL and IFRS in Integrated Reporting,” Piechocki and Servais enumerate a growing list of nonfinancial XBRL taxonomies under development:

The Global Reporting Initiative (GRI) has published the GRI Taxonomy to reflect GRI Sustainability Reporting Guidelines. The World Intellectual Capital Initiative (WICI) is conducting a similar effort in the area of intellectual capital and has developed a taxonomy that reflects Gartner and Enhanced Business Reporting Consortium metrics, management discussion and analysis, and the WICI framework. There is also interest in XBRL from projects such as the Prince’s Accounting for Sustainability Project, the Carbon Disclosure Project, and the International Integrated Reporting Committee. [p. 157 of the eBook]

The authors discuss the problem of comparability of nonfinancial information across XBRL reporting frameworks — a challenge similar to that faced in financial reporting, which Piechocki recently described in an interview with this blog. The authors believe the work of the ITA project in helping to ensure cross-border interoperability of IFRS, EDINET (Japan), and US GAAP taxonomies will yield important lessons for a similar alignment in integrated reporting.

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