The European Single Access Point: What is it and what will it mean for corporate transparency?
EU legislation requires companies to publish reports, particulars, and datasets regarding their financial, environmental, and governance performance to increase transparency. Each company publishes these reports on its website or submits them to the authorities of the member state, making the discoverability and comparability of such information challenging.
What is ESAP?
The European Commission recognising this challenge on the 25th of November 2021, adopted a legislative proposal on the European Single Access Point (ESAP). ESAP is being developed by the European Securities and Markets Authorities (ESMA) as a centralized platform providing access to financial and non-financial information about companies and their products. It will cover corporate reports and disclosures from multiple sectors, improving data availability for a variety of stakeholders by making these disclosures and reports accessible to the public. This will empower stakeholders to make informed decisions that are both environmentally and socially responsible.
How will reporting flow to ESAP?
ESAP will collect machine-readable or data-extractable corporate reports and disclosures from designated collection bodies through a structured API process. Entities (companies, SMEs etc) with EU reporting obligations (e.g. under EU CSRD, EU Taxonomy) will submit information to these collection bodies which will validate submissions for proper formatting, complete metadata, and Qualified Electronic Seals (QES). Once validated, the collection bodies will promptly submit the reports and metadata to ESAP through a secure API All validated information will then become available to the public through a web portal and an API for various stakeholders.
When is the ESAP portal expected to launch?
The European Securities and Markets Authority (ESMA) is required to establish and operate the ESAP portal by 10 July 2027.
What functionalities is ESAP expected to have?
ESMA should ensure that ESAP will have at least the following core functionalities:
- User-friendly web portal that provides easy access to the information and accommodates the needs of all users.
- An API that enables automated access, seamless integration, and data retrieval for various stakeholders.
- Search functionality that supports all EU languages, allowing users to search for data based on predefined criteria.
- An information viewer that allows users to view details directly on the platform.
- A machine translation service to support users from different linguistic backgrounds.
- A download service that allows users to download data in bulk in various formats.
- A notification service that informs users of any new information on the platform.
- A data quality assurance mechanism that will perform automated validations to ensure quality of the information provided.
- Metadata-enriched information that facilitates the search functionality and data categorization.
Thus, ESAP will serve as a centralized access point for financial and non-financial information about EU companies and their products. This information will include financial statements, sustainability reports, and regulatory filings. Access to ESAP is intended to be free of charge, with provisions in the regulations allowing for fees in cases of significant and recurring data extractions. The information available on ESAP will be provided under an open license, with ESMA proposing the use of Creative Commons Public Domain Dedication (CC0) license to ensure the reports are freely accessible and reusable by anyone for any purpose.
What will ESAP mean for corporate transparency?
ESAP will provide centralized access to all publicly available corporate information across the EU. It will make corporate reporting discoverable and more visible than before, when they were hidden under different web portals. ESAP will offer search functionalities in all EU languages making the reports more accessible to the general public. Information will be available in near real-time as soon as it has been received and validated by the collection bodies. Consistency and comparability of corporate disclosures will be improved through standardized formats.
How does the ESAP regulation define data extractable and machine-readable formats?
As mentioned above, ESAP will accept reports and disclosures in data-extractable or machine-readable format.
Data extractable formats, like text-based PDFs, are human-readable, publicly accessible, and searchable. However, they require some level of manual intervention to extract and process data. Machine-readable formats are structured for easy data extraction and interpretation by software. This makes them a more reliable format that doesn’t require the same level of human intervention to process.
According to ESMA, acceptable machine-readable formats will include: XML, JSON, XBRL and iXBRL files. Acceptable data-extractable formats include: PDF and xHTML files.
What is ESAP not?
ESAP is not a regulatory authority and thus does not regulate or enforce compliance. It is merely a platform for accessing information rather than a regulatory body. ESAP is not a data producer and it does not generate data. It aggregates and provides access to reports produced by companies and other entities. ESAP aims to serve a wide range of stakeholders and consequently democratize information access.
ESAP is not expected to be a structured, accessible database of data points. It will be a database of corporate disclosures and reports published by companies according to the format required by each piece of legislation.
This means that the structure and accessibility of the reports will depend on the specific reporting requirements set by the relevant legislation. Thus, if a piece of legislation requires the company to report in a PDF format, ESAP will contain a PDF document. This indicates that ESAP will hold documents in formats specified by the respective laws, which may include different data extractable and machine-readable formats.
What has Wikirate advocated for?
Wikirate has been advocating for the European Commission and ESMA to consider civil society as an important user of the ESAP portal. The communications on ESAP have been targeted towards the needs of financial institutions with civil society not included as a category of respondent in the most recent consultation in March.
Given how important corporate information is for research and advocacy across social and environmental issues, it is essential that ESMA reaches civil society stakeholders when launching consultative processes.
As part of our campaigning on behalf of civil society, Wikirate has been advocating for free access in bulk to any information contained within ESAP and for the information to be made available under an open data license and according to open data principles.
The latest draft standard for ESAP includes the provision of a CC0 license however it is not yet clear that all users would be able to access the reports in bulk for free. In fact, the draft standard mentions that non-civil society users may have to pay a fee for API access and that all users could be subject to authentication and access control protocols. In the latest consultation, we strongly urged ESMA to provide API access for free for all stakeholders following the example of the US SEC (EDGAR API) and the UK Government (Companies House API).
What role can civil society play in the future of ESAP?
It is crucial that civil society makes its voice heard as a future user of ESAP. This means joining Wikirate in advocating for access to ESAP for all without paywalls.
We must also advocate for improving data formats for corporate sustainability legislation across the board. This means making our voices heard that we want existing and upcoming legislation to require companies to publish data in structured, machine-readable formats according to open data principles.
Conclusion
ESAP will not be a silver bullet. The quality and accessibility of the information contained within ESAP will only be as good as the reporting standards set by legislation. Civil society must come together to call for all stakeholders to have free access, in bulk to ESAP as well as advocating for standards that mandate structured formats for corporate reporting.
