It’s no exaggeration to say that the EU has turned the page on a new chapter in corporate reporting, with the announcement this week of legislation to create the European Single Access Point (ESAP). This will gather filings from national bodies and provide a free single point of access to information on EU listed companies and investment products. It comes as one of a package of four legislative proposals intended to ensure that investors have better access to company and trading data, and encourage the capital markets union.
ESAP is set to go live in 2024, and will be operated by the European Securities and Markets Authority (ESMA). For those more familiar with reporting elsewhere, ESAP will be something like the EU’s version of the US Securities and Exchange Commission’s EDGAR or Japan’s EDINET – which have made a huge difference to data availability and utility for both investors and regulators.
Among the important points to note about ESAP, its remit extends to both financial and sustainability information, allowing integrated decision-making using a range of data. Furthermore, the proposals emphasise the need for the information to be “digitally usable,” with structured disclosures enabling automatic extraction and analysis by software.
“Easy access to data is important in order for decision makers in the economy and society to make sound decisions that serve the efficient functioning of the market. Rolling out common European data spaces in crucial sectors, including the financial sector, would serve that purpose. The financial sector is undergoing a digital transformation, which is expected to continue in the coming years, and the Union support that transformation, in particular by promoting data-driven finance. Furthermore, putting sustainable finance at the heart of the financial system is a key means to achieving a green transition of the economy of the Union. For the green transition to succeed through sustainable finance, it is essential that information related to the sustainability of businesses is easily accessible to investors,” state the proposals.
The EU has already made substantial strides in digital reporting with the introduction of the Inline XBRL-based European Single Electronic Format (ESEF). ESAP is likely to extend the application of ESEF to non-financial information, following sustainability standards being developed by the European Financial Reporting Advisory Group (EFRAG).
We at XBRL International warmly welcome the announcement of ESAP and look forward to new possibilities in terms of access to and analysis of European data. Our congratulations to all who have helped bring this initiative forward, and we will watch with interest as the proposals progress through the legislative process.