28 June 2010

So the fizzy white wine stays in the bottle for now...

Well, it looks like we were all enthusiastic just a moment too soon. No sooner does it look like a XBRL in the United States was making a huge leap forward - at least in terms of mandating - then the rug gets pulled out from under. It seems the "Data Standard" amendment has been dropped from the financial reform legislation.

And through the weekend I actually thought that the biggest danger was a stalling of the whole vote due to the illness of Senator Byrd (the longest serving member of the US Senate - the "Upper House" of the American congress). Senator Byrd (now deceased as of 3am US time this morning) was a **Republican** (No he wasn't - thank you Bob for pointing that out so quickly, and my apologies to all who read this and believed my error. Here is from CNN "Byrd, a nine-term Democrat, was known as a master of the chamber's often-arcane rules and as the self-proclaimed "champion of the Constitution," a jealous guardian of congressional power.")  and one of only 4 who were voting with the Democrat on the overall law that was being propose. With him being taken ill, the worry was that the law would stall if there were not enough Republicans voting in favour.

With his death, the Governor of West Virginia (his state) will select his replacement to serve out the remainder of his term in office. As the Governor is a Democrat, we can expect a Democrat to be appointed, yet there will still be a delay.

Well, that was my worry, until the e-mail from the CEO of XBRL US Inc. Pity.

Then again, as pointed out in his earlier e-mail, there was still some way to go through the process of "reconciling" the two versions of the law that were before Congress. The American system requires a single version of a law to be passed by both the House of Representatives (the "lower house") and the Senate (the "upper house"). This makes for an arcane world of deals and counter-deals. Swapping favours and influence, and in the process buying votes - both in Congress and from the electorate. It also allows various constituencies see how hard congressional representatives are working for their various constituencies.

It seems in this case that the XBRL constituency was trumped by something bigger.

So the fizzy white wine stays in the bottle for now, and Moet stays in the cellar. Hopefully we'll see both bottles come out again soon.

"Bugga" is about all I can say

26 June 2010

A great step forward for XBRL in the US

This e-mail came from XBRL US Inc yesterday (June 26). I'm certain that almost everyone in the XBRL community has seen it. Clearly this will be a great step forward for the adoption of XBRL for business reporting, certainly in the United States.

When this passes and is signed into law, the entire community should collectively open a bottle of fizzy white wine. When the OMB (Office of Management of Budget) says that the Data Standard is XBRL, then the entire community should collectively open a bottle (or two or three) of Moet (or better).

A huge amount will have been accomplished, and the leadership of XBRL US Inc will have a tremendous accomplishment to be proud of.

Basically going forward all recipients of grants from the US Federal Government will be required to report in a "Standard Data Format" - defined in such a way as to make XBRL the logical candidate for such reporting. The opportunities for improving the transparency of reporting of grants expenditure will be fantastic, and could lead to the US government and people actually knowing how their money is spent.


Dear XBRL International Members:

Just a few hours ago, 12 amendments to H.R. 4173 (the “Dodd Bill” for financial regulatory reform) introduced by Rep. Darrell Issa of California were approved and added to federal legislation.  All 12 call for the use of data standards for a wide range of financial regulatory reporting.  The criteria for data standard is that drafted by XBRL US at the request of committee staff and used in previous bills HR 2392 and SB 303:

The data standards required by subparagraph (A) shall, to the extent practicable, –
(i) incorporate a widely accepted, non-proprietary, searchable, computer-readable data format;
(ii) be consistent with and implement—
(I) United States generally accepted accounting principles or Federal financial accounting standards (as appropriate);
(II) demonstrated best practices; and
(III) Federal regulatory requirements;
(iii) improve the transparency, consistency, and usability of business and financial information;
(iv) ensure interoperability and appropriate reuse of information;
(v) reuse, enhance, harmonize, and integrate existing standards as possible and appropriate; and
(vi) be capable of being continually upgraded to be of maximum use as technologies and content evolve over time.



I hope nobody but me remembers ADA, or ever watched "Yes Minister".

Passage of the bill will be a great step forward, but it is only the next step. Endorsement by OMB will be an even greater step, but it is only the next step along the road.

ADA was mandated for all programming in DoD (Department of Defence). Unfortunately companies writing programs to run on DoD computers had an option called a "waiver". Those companies spent untold time and money writing waivers, then getting on with writing the COBAL, PL/1, C etc programs that they were writing. After 10 years of mandatory use of ADA, the DoD quietly scraped the requirement.

The XBRL community can learn a lot from the ADA experience. Some basic lessons include:

None the less, this is a great accomplishment and congratulations to XBRL US Inc for helping get this through Congress.

17 June 2010

Myths revisited - Sustainability Indices

On April 15th I wrote about 6 recent myths of Sustainability Reporting. One of those myths is that Sustainability Indices list sustainable companies.

My specific comments from that post are at the bottom of this one, or you can read about all 6 recent myths here: 6 recent myths about sustainability reporting

Well "I told you so" is such a horrible thing to have to say, but the disaster in the Gulf of Mexico has proved the point, and at the beginning of June, BP was removed from the Dow Jones Sustainability Index. Now we just need to see the other Unsustainable Companies removed, or a new category created: The Dow Jones Would Love To See These Companies Actually Be Sustainable Index (the DJWLTSTCABSI - but then, that is probably a bit of a mouthful).

Grist got it right last September, when they asked Joel Makower (of GreenBiz.com) and Auden Schendler (of Aspec Skiing Co) the question - "Is the Dow Jones Sustainabilitiy Index worth a damn?" From my own perspective, the answer is clear - the DJSI (and many/most others), like many/most Sustainability reporting standards, are great for companies that want to put the effort into appearing to be sustainable, eco-friendly, worker/society friendly, etc.

Frankly, I'll be convinced when companies start providing reports fully linked to the DVFA/EFFAS set of key performance indicators for ESG. The guys at DVFA have done a great job of creating a set of metrics that actually do, at an industry level, help report on the range or ESG issues. Will this make them "sustainable companies"? No. But it will help investors, the media and the public gain real insights into the priorities and activities, metrics and performance of companies.

=== Extract from the 6 myths ===

Sustainability Indices list sustainable companies

Every week there seems to be another release of the winners, or top-100, or top-something list of sustainable businesses. There are also the various indices such as the FTSE4Good, Dow Jones Sustainability Index, or any number of mainstream sustainability indices. And every time I look at the lists, they are populated with companies that have produced great CSR reports, not "sustainable" businesses.

As a classic example, in 2009 a press release touted a list of the top 100 global sustainable companies. "The Global 100 includes companies from 15 countries encompassing all sectors of the economy that were evaluated according to how effectively they manage environmental, social and governance risks and opportunities, relative to their industry peers." Thank goodness they declared that this was in comparison to their industry peers.

After all, who would consider Air France to be one of the top 100 sustainable businesses in the world? It is an airline for goodness sakes, a mass producer of high altitude CO2 and high consumer of fuel, in an industry that survives in part on major subsidies such as exemptions from fuel taxes. However, I guess they must be pretty good, when compared to their peers in their industry. But that does not make Air France a “sustainable” business.