Advancing sustainability disclosure with xBRL to accelerate climate policy for ESG

Purpose This study aims to investigate the impact of climate policy on Islamic banks’ environmental, social and governance performance through the extensible Business Reporting Language moderating effect. Design/methodology/approach This study used a panel data approach from the Climate Change Performance Index report, xBRL.org report and Islamic Financial Services Board report. Findings The results show that climate policy can have a greater impact on environmental, social and governance performance among Islamic banks after the adoption of extensible Business Reporting Language. Practical implications This study demonstrates that deploying automated data processing and validation using extensible Business Reporting Language can boost the quality and reliability of sustainability reports, improving the capacity to exchange data between regulators and government agencies. Therefore, the presence of high-quality sustainability reporting allows Indonesia and Saudi Arabia to maintain their dedication to achieving net-zero emissions by 2060. Originality/value To the best of the author’s knowledge, this research is the first to observe how extensible Business Reporting Language adoption can support national climate policy in assisting Islamic banks to achieve a higher environmental, social and governance performance with a dynamic capability view. Most research observed extensible Business Reporting Language and financial-related performance, such as stock liquidity, value relevance, income statements and corporate tax. Therefore, this study offers a more balanced and comprehensive view by selecting Indonesia and Saudi Arabia for their strategic importance to the global Islamic economy and the Group of Twenty economy at the same time.