Between 13 December 2024 adn 31 March 2025 ESMA held a public consultation on the Regulatory Technical Standards (RTS) for companies’ digital disclosures (ESEF) and the EU’s data portal (EEAP/ESAP). Simply put; how and when company disclosures will be made digitally accessible in the EU (more context down below).
Our feedback focuses on making sure data produced by companies will be made accessible and useful within a reasonable timeframe.
Our response in a nutshell:
- Shorten digital reporting timelines by:
- Simplifying and reducing the number of implementation phases from 3 to 2
- Removing the phasing in approach for different types of companies
- Decoupling the digital reporting and ESAP implementation timelines
- Having a more flexible revisions mechanism for the XBRL taxonomies
- Improve data quality by:
- Requiring narrative disclosures to be digitally tagged
- Requiring footnotes to be digitally tagged
- Adding Legal Entity Identifiers (LEIs) to the mandatory elements
- Reevaluate the cost-benefit-analysis to address the big misconception that digital tagging is an unfair burden for companies because:
- The supporting research is based on old data from 2016, which does not account for many of the market's advancements.
- More recent research shows much lower cost estimates per digital tag.
- EFRAG has demonstrated that ESRS statements can be digitally tagged in just a few hours.
- Data user's perspectives are underrepresented in cost-benefit-analysis, while company perspectives are overrepresented.
- Provide tooling for companies to do the digital tagging, as a compromise to the perceived burden and recommended shortened timelines.
Download the pdf to see our full response.
ESMA consultation website: https://www.esma.europa.eu/press-news/consultations/consultation-esef-rts-sustainability-reporting-and-amendments-eeap-rts
------ Context -------
Who is ESMA again?
The European Securities and Markets Authority (ESMA) is the EU’s financial markets regulator and supervisor. Among other things, they develop the Regulatory Technical Standards (RTSs) for the development of the European Single Electronic Format (ESEF) which is the format in which companies will have to provide their digital disclosures (for any EU reporting directive).
What digital disclosures are we talking about in this consultation?
This consultation covers the:
- European Sustainability Reporting Standards (ESRS),
- EU Taxonomy, and
- International Financial Reporting Standards (IFRS).
What EU data portal?
ESMA has been tasked with the development of the European Single Access Point (ESAP). Member States will have their own portals referred to as ‘collection bodies’ where companies have to submit their disclosures, which will then feed into a central EU data portal (ESAP) where all EU disclosures can be accessed. The ESAP is currently under development and is expected to be operational in the Summer of 2027.
You will also see references to the European Electronic Access Point (EEAP), this was the predecessor of ESAP. It was originally supposed to go live in 2018 but the work was paused due to (among other things) funding issues.
Is the Omnibus impacting this work?
The verdict on how Omnibus will exactly impact this work is still out (ESMA is currently trying to wrap their head around it too), but there are two main themes to keep in mind:
- The different reporting standards are to be combined so their Regulatory Technical Standards (RTS) will need to be combined too.
- The stop-the-clock which was proposed alongside Omnibus delays reporting timelines, meaning most of the data will be available later than what the consultation paper timelines are anticipating.
What happens after the public consultation?
ESMA will consider the feedback it received in Q2 2025 and expects to publish a final report and submission of the draft technical standards to the European Commission for endorsement in Q3 2025.