In a significant development, the EU has announced a provisional agreement to establish a European Single Access Point (ESAP). This online platform will serve as a centralized repository for all corporate disclosures, encompassing sustainability reports, within the European region. This move aligns with the forthcoming actions of the United States Securities and Exchange Commission, which is set to include environmental sustainability corporate reports.
The ESAP would provide at least the following functionalities:
- a web portal with a user-friendly interface in all the official languages of the Union to provide access to the information in the ESAP
- an API enabling easy access to the information available in the ESAP
- a search function in all the official languages of the Union
- an information viewer
- a machine translation service for the information retrieved
- a download service, including the download of large quantities of data
- a notification service informing users of any new information available in the ESAP. Research may be done using criteria related to the entity that submitted the information (name, Legal Entity Identifier, size) or to the information itself (type, submission date of the information).
Refer: The Future is you
The EU’s Capital Markets Union (CMU) Action Plan aims to consolidate corporate disclosure documents from member states under a single reporting standard. Traditionally, each of the 27 countries managed financial disclosures within their respective borders. However, the EU has been working towards harmonizing the reporting process, with an emphasis on financial disclosures akin to those filed by publicly traded US companies with the SEC. In the past year, the introduction of sustainability reporting standards has introduced a new requirement to this endeavor.
Elisabeth Svantesson, Minister for Finance of Sweden, expressed optimism about the recent agreement, stating, “Today’s agreement comes as good news both to European businesses as well as investors worldwide. We are about to create a platform which will make it much easier to find and compare investment products and companies, including SMEs, which are sustainable and which have a bright financial future. This will help European businesses in becoming even more attractive for investors.”
It is important to note that ESAP itself does not introduce new reporting standards. Instead, it provides a centralized location for the Corporate Sustainability Reporting Directive (CSRD), which has been developed by the European Financial Reporting Advisory Group. The CSRD is being implemented in phases, initially focusing on publicly traded companies. Eventually, the reporting requirements will extend to all businesses, including small and medium-sized enterprises (SMEs).
Similar to the phased implementation of the CSRD, ESAP will also be introduced gradually, with each phase concentrating on different markets and reports. Phase 2 will encompass sustainability reporting, including the CSRD, Sustainable Finance Disclosure Regulation (SFDR), and the EU Taxonomy Regulation. Phase 1 is anticipated to commence in the middle of 2027, followed by the implementation of Phase 2 six months later. During the interim period, CSRD reporting will occur at the national level.
Considering the pressing need for ESG considerations and unified norms, it is crucial for the EU to expedite its efforts and streamline the overall reporting process. This will not only benefit European businesses but also enhance their attractiveness to investors worldwide. By establishing a robust framework for sustainable and financially promising companies, the EU can take a significant step towards ensuring a greener and more responsible business landscape.
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