Laureen van Breen, Managing Director, WikiRate
As a proponent of open data to make the world more sustainable, WikiRate believes that the European Single Access Point can be a game changer. However, the European Commission’s lack of consideration for civil society users will severely hinder its goals; to end greenwashing and meet climate targets.
The European Single Access Point is poised to deliver a bonanza of financial and non-financial “sustainability” data about companies operating in the EU. However, the European Commission’s proposal on how the portal works and who governs it is not yet compatible with the EU top brass’ notions of ending greenwashing and achieving climate targets. The Commission’s ESAP proposal must include civil society as a primary user of the portal and its future developments if it wants to achieve those targets.
Not just financial data, ESAP will provide a treasure trove of sustainability data
The European Single Access Point will be the centralized point of the European Union where anyone can access all self-reported company financial and non-financial data. A large chunk of that data, as Commissioner Mairead McGuiness explains, “won’t just be financial information, it [ESAP] will also deal with sustainability information.”
Companies will generate much of the sustainability data thanks to the EU’s Corporate Sustainability Reporting Directive, which starts entering into force in January 2024. The directive is a big step forward, as it will:
- bring thousands more companies into the transparency fold,
- standardize their reporting across the EU (making comparisons and analysis easier),
- and introduce the requirement of third-party auditing on the data reported.
This recognition of equal importance between financial and sustainability data is important for two reasons. Firstly, it shows that the EU considers protecting us and our environment as important as securing the economy. Secondly, it acknowledges that to ensure that protection, we need to understand companies’ actual impacts on our environment and communities.
Moving the EU to a net-zero economy
Having sustainability data in vast quantities creates the chance for new insights. Civil society organizations can provide analysis to policy-makers to show which sectors are leading and which are lagging in helping shift the EU to a net-zero and just economy. These efforts coincide with CSRD’s political author, Frans Timmermans, who stated in 2020 that the “top priority in the [Green deal] agenda has been to end ‘greenwashing’.”
For example, civil society organizations have a record of using sustainability data to demonstrate where companies are not walking their talk:
- New Climate Institute discovered that governments and companies’ net zero pledges are not transparent and coherent enough to ensure the Paris Agreement’s long-term temperature goal. Adding that ‘greater [reporting] standardisation and operationalisation of net zero targets is needed.’
- Minderoo’s Plastic Waste Makers Index used sustainability data ‘to move further up the chain to find the gatekeepers of plastic production’ and identify the key players that undermine recycling schemes and drive the market of single-use virgin plastics.
Civil Society missing in Commission’s ESAP proposal
It is, therefore, a surprise that the European Commission’s ESAP proposal almost entirely lacks consideration for the stakeholders with the most relevant knowledge and ability to help end greenwashing. Civil society is not mentioned once in the body of the proposed law, despite it being a small but valued sector of the EU’s targeted consultation.
This lack of consideration of civil society organizations shines through in small but critical ways that would hinder organizations from providing policy-makers essential insights.
Three significant problems need to be fixed in the current proposal:
1. Data access will not be ‘free’ — Fees for “large searches” for civil society organizations
Two things are valid for all civil society organizations; they have less time and resources than for-profit entities. Large data search and transfer features like APIs¹ are time-saving devices and, therefore, essential to the success of organizations monitoring company impacts like WikiRate and its network of partners.
Currently, the Commission proposes to “charge fees to users that require very large volumes of data or frequently updated information.”
Doing this would put the data out of reach of many civil society organizations or soak up precious time and resources, downloading the data and reformatting it into a usable state.
Consequently, civil society organizations will struggle to analyze trends within and across sectors and monitor company responses to legislation. They will most likely be stuck looking at small samples (the top 10 or 100), focusing advocacy efforts on companies already in the spotlight with limited impact.
Solution: Free API (large data searches and transfers) access for non-commercial users, fees for commercial users who intend to remix the data and sell the analysis.
2. The open data licensing and charging for API may not be compatible
The proposed data license for ESAP is an open data license (but the precise nature is currently unclear²), meaning you cannot charge for the data. However, as outlined above, there will be a fee for “high volume users,” which most likely means those using the API (or another bulk extraction feature) to retrieve the data from ESAP.
The good news for the European Commission is that this construction is possible. The bad news is that once the data is out of ESAP and in another open database, another provider could offer the same data via API free of charge.
So, ESAP could end up “competing” with other access points to ensure they maintain their paying customer base.
Solution: Use a Creative Commons Attribution 4.0 International licensing (CC BY 4.0) for the data and citations with meta tags to track data use and identify those using the data for commercial purposes to ensure the integrity of ESAP.
3. Civil Society needs to be included as a knowledge partner in developing ESAP
Building a platform like ESAP is not an easy task. Civil society organizations with open data experience could be valuable knowledge partners in testing, reviewing, and improving the portal. However, currently, the monitoring and development are solely left up to the authority of the joint Committee of the European Supervisory Authorities³.
The European Economic and Social Committee, in its opinion on the ESAP proposal, called for the establishment of a civil society advisory board to go alongside the EU’s “executive committee.”⁴
The Joint Committee should consult designated civil society and business stakeholders as part of its annual report process: This would help avoid problems such as the ones outlined.
There is already a pool of organizations that advise the European Financial Reporting Advisory Group (EFRAG) on the technical implementation of the European Sustainability Reporting Standards. This group could be enlarged to include more stakeholders and consulted directly through EFRAG or the Joint Committee.
Solution: Consult civil society regularly in the development of ESAP
WikiRate and other civil society organizations could use ESAP’s rich seam of data to move the needle on ending greenwashing, achieving climate targets, and helping transition to a just economy. However, by omitting civil society organizations, ESAP’s most potent users’ analysis of how sustainable the EU economy is will remain unknown, and sustainability targets unachieved.
[1] API Basics Explained!!
[2] 47 civil society organizations called for FAIR open data principles to be enacted in CSRD legislation.
[3] The Joint Committee of the European Supervisory Authorities, European Securities and Markets Authorities, the European Banking Authority and European Insurance and Occupational Pensions Authority.
[4] The European Economic and Social Committee’s report on ESAP, proposes, “The governance of the ESAP should be based on the involvement of civil society and should include two levels of governance structure, as follows:
• an advisory board, which should include civil society and the social partners, based on a transparent selection process and which will decide about the future of the ESAP and strategic changes;
• an executive board ensuring technical standards and the proper functioning of the ESAP.”
