The introduction of the European Single Access Point – ESAP – is not only the first action of the ‘Capital Markets Union (CMU) Action Plan’ and part of the ‘Digital Finance Strategy’, but also places sustainable finance at the heart of the financial system to help achieve the green transition, aligning with the goals of the ‘European Green Deal.¹

Sustainability-related information which underlies new disclosure obligations, such as those imposed by the Corporate Sustainability Reporting Directive (CSRD), will be accessible on the ESAP platform at an early stage. This will help investors, organizations, and financial intermediaries identify and prioritize impacts and risks throughout the investment decision-making process.

The purpose of ESAP is not to create additional disclosure or reporting obligations, but rather to consolidate data that companies disclose and report regularly. 

Investors, stakeholders, and market participants visit a multitude of national websites and databases (or use paid services from data aggregators) to find relevant company information. To overcome this task, ESAP aims to establish a centralized platform that is both user-friendly and free of charge (although certain services involving large amounts of data may be charged). The platform will facilitate easy and structured access to reported or disclosed financial and non-financial related company information. 

After the publication of the ESAP Regulation 2023/2859 in the EU’s Official Journal in December 2023, the European Securities and Markets Authority (ESMA) is now expected to establish ESAP and make it operational by 10 July 2027, with a gradual implementation extending until 2030.²

The introduction of ESAP represents a significant step towards greater market transparency within the EU. Furthermore, it underscores the commitment to adopting a progressive data strategy and reducing asymmetry of information related to financial services, capital markets, and sustainable finance, particularly to support reporting under the CSRD. ESAP will leverage the impact of the CSRD by reducing the time, cost and errors associated with sustainability-related activities and improving the accuracy of ESG ratings.³

Financial, non-financial and capital market-based companies will be represented on ESAP, as well as those impacted by the CSRD, such as large companies, SMEs, non-capital market-oriented companies and companies with a non-EU parent.

To expand the sources of financing beyond other than banks, the system is designed to provide cross-border visibility to international investors, smaller entities in smaller capital markets and for complex transaction types such as M&A.⁴

In terms of users, ESAP would aim to primarily meet the needs of investors. Users can be diverse, including large professional investors, retail investors, funds, civil society, data aggregators, consumer organizations.

KEY TAKEAWAYS ON ESAP'S DATA STRATEGY, DATA MANAGMENT AND CUSTOMER SEGMENTATION

After the consultation period and the feedback received, the European Supervisory Authorities (ESA) are expected to publish a final report and submit the draft Implementing Technical Standards (ITS) to the European Commission by 10 September 2024. 

The ESAP implementation go-live period for most types of information, according to the ESAP Omnibus Directive, will be between 10 July and 31 December 2027. From 10 January 2030 on, entities may submit the information to the collection body in the Member State, where the entity is based to make it accessible on ESAP.⁵

To ensure the consistency and completeness of information, ESAP offers a two-step reporting system. While the first step requires reporting entities to submit information to a collection body, (the Union or a national authority/register), the second step mandates the collection bodies to submit the information they collect from reporting entities to ESAP.⁶

In the coming years, the focus will be on centralizing electronic access to the following information:

• Mandatory company information based on public reporting obligations due to former directives and regulations, e.g. an entity’s financial performance, environmental, social or governance matters, compliance, product, or service-related information.
  
• Voluntary and historic company information (not necessarily adhering to the same regulations as mandatory information), if the company chooses to make this data accessible on ESAP.⁷
  

Gathering corporate and sustainability-related data on a single platform will foster investments in sustainable projects: 

• Market participants will have access to fully analyzable data to assess their own and other entities’ ESG risks, dependencies, opportunities, and impacts.
  
• Making publicly available information easily accessible will simplify ESG due diligence.

POTENTIAL IMPACT FOR MARKET PARTICIPANTS AND NEXT STEPS:

To drive the most appropriate strategy, the following set of actions would be beneficial: 

• Evaluate the impact on data strategy, such as data aggregators to use the data made available on ESAP and leverage its benefits.
  
• Identify use cases for the impacted business functions with regards to the consumption of data from ESAP and the delivery of data to ESAP via collection bodies.
  
• Assess the ESAP-compliance readiness of data, data management, data consolidation, accounting, and IT architecture.
  
• Assess the firm’s customer and client-facing documentation readiness to incorporate ESAP as a source of information.
  
• Monitor any potential legal, regulatory, or contractual matters emerging from ESAP (e.g. data protection, etc.).
  
• Understand how existing reporting initiatives (such as Sustainable Finance Disclosure Regulation (SFDR) and CSRD) contribute to the Green Deal via sustainable investments.

In conclusion, the European Single Access Point will further promote the integration of financial services and capital markets in the EU by centralizing access to vital financial and sustainability-related data. ESAP will not introduce any new disclosure requirements for European firms but will provide access to information that is already published and reported. 

By aligning with the European Green Deal and supporting directives such as the CSRD, ESAP aims to streamline the investment decision-making process through enhanced data transparency and accessibility for a wide range of investors. Ultimately, ESAP’s integration into the EU’s financial framework represents a significant step towards a more transparent, efficient, and sustainable market environment.

Capco has a strong and rich track record of supporting clients with their market data strategy, reporting requirements, data management and IT implementations, including ESG and CSRD requirements. 

Our data management experience across the entire data lineage combined with our expertise in data sourcing and architectures are key to delivering the information mandated by regulatory and internal requirements. 

We understand the challenges financial firms face and have developed best practice approaches to support our clients, based on our established and successful solutions for core architecture, data sources, intelligent layers, data quality and end-user interfaces. 

Contact us to learn more about how we can help your institution adapt to ESAP, giving you an edge over your competition. 

REFERENCES
¹ Easy access to corporate information for investors: Council agrees its position on the European Single Access Point (ESAP) - Consilium (europa.eu)
² ESMA24-671865080-1303_Verena_Ross__speech_at_the_HCMC_public_conference.pdf (europa.eu); L_202302859EN.000101.fmx.xml (europa.eu)
³ Easy access to corporate information for investors: Council agrees its position on the European Single Access Point (ESAP) - Consilium (europa.eu); eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52021PC0723
⁴ Easy access to corporate information for investors: Council agrees its position on the European Single Access Point (ESAP) - Consilium (europa.eu); https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52021PC0723
⁵ https://www.esma.europa.eu/sites/default/files/2024-01/JC_2023_78_CP_on_ITS_on_ESAP_tasks_of_collection_bodies_and_ESAP_functionalities.pdf; L_202302859EN.000101.fmx.xml (europa.eu)
⁶ https://www.esma.europa.eu/sites/default/files/2024-01/JC_2023_78_CP_on_ITS_on_ESAP_tasks_of_collection_bodies_and_ESAP_functionalities.pdf
⁷ https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52021PC0723