The article was updated to correct the number of responses received by a consultation on the EU green taxonomy.
An EU proposal to create a public database for financial and sustainability corporate information has received a largely supportive response from the market according to a recently ended consultation.
Once in operation, the proposed resource – named ESAP, short for European Single Access Point – will compile the sustainability data that EU companies will soon be required to provide under an overhauled Non-Financial Reporting Directive (NFRD), in addition to statutory financial disclosures.
Regulators hope that the revised NFRD – and creation of the ESAP – will address pushback from asset managers and other financial institutions who say they are unable to comply with new disclosure requirements introduced by the EU Sustainable Finance Action Plan due to gaps in the sustainability data reported by companies.
In its submission, Insurance Europe said that linking the ESAP with the regulatory requirements set by the Sustainable Finance Disclosure Regulations and EU green taxonomy would “achieve better comparability, increased transparency and lower barriers and costs, as well as help data preparers by eliminating multiple different requests for information”.
Others viewed the ESAP as a way to counter the increasing dominance of third-party data providers. BVI – which represents German fund managers – said that the platform would “reduce the need to purchase ready-made ESG information from commercial data providers as market concentration in terms of ESG data has significantly increased over the last years”.
A number of respondents including ShareAction, Deutsche Borse, the Austrian Federal Economic Chamber and BVI suggested using the ESAP to incentivise voluntary disclosures by entities not currently subject to the NFRD such as non-EU issuers, small and medium EU companies and unlisted EU companies.
Nearly all submissions emphasised the importance of using a standardised ‘machine readable’ digital format to ease data processing and analysis. This is also in line with new EU rules for financial disclosures from this year onwards.
However, the EU faced criticism over the timing of the consultation period for ESAP which took place over the year-end holidays. The consultation received only 27 responses, while a recent consultation for the green taxonomy received over 40,000 submissions.
The legislative proposal establishing the ESAP is expected to be tabled in Q3 of this year, while the revised NFRD – which will establish the scope of corporate sustainability reporting – is due by March