You are one click away from benchmarking your ESEF data for free!

The ESEF reporting format has been a buzzword in the finance world since its introduction in early 2020. While it may seem like just another regulatory requirement for European publicly listed companies, savvy financial professionals and issuers know that ESEF is much more than that: it's a golden opportunity to improve their financial communication and gain a competitive edge.

Alexandre Prat-Fourcade

Alexandre Prat-Fourcade

June 9, 2023
6 min read
You are one click away from benchmarking your ESEF data for free!

ESEF and open data: can the dream become a reality?

For those who are not familiar, ESEF (European Single Electronic Format) is a standard format for companies to report their financial statements. This format not only simplifies the flow of financial information, but also allows greater comparability between companies' data.

By requiring companies to report financial information in a digital format, ESEF ensures that data can be easily collected, analyzed, and shared across the market. This, in turn, creates a foundation for greater transparency in the financial world, as stakeholders can access and analyze data more easily.

This is especially important to us at Corporatings, since we believe that data is the new digital gold for financial professionals. Whether you are an issuer or an investor, data offers insights into market trends and performance which are key to making informed decisions…but only as long as the data is reliable and easily accessible.

For a long time, accessibility has remained the main obstacle standing between the dream of Open Data and reality. In the absence of a central database, it was difficult for professionals to access the information they needed. This is especially true in the financial industry, where data is often siloed within individual companies or organizations. And the diversity of traditional reporting formats (PDFs) doesn't help.

This is where ESEF changed the game. Since regulation ensures that financial data is reported in a standardized, machine-readable format, it made it easier for us to collect and centralize it within a centralized proprietary database – the necessary condition to help all financial professionals benefit from easy access to financial data. ESEF is therefore an opportunity for us and the whole market.

ESEF can serve your financial communication … if you leverage it

But many issuers still don't view ESEF as the opportunity that it is, and there is a simple reason for that. For companies, the perspective of what they can achieve thanks to ESEF is often overshadowed by the technicality of the format and the cumber some reporting and filing process.

Indeed, ESEF reporting has itsown technical language (XBRL), and understandably, issuers' main focus is often to ensure that there are no errors when converting their financial statements into XBRL format. Therefore, transition to ESEF reporting has often been associated with significant investments in technology and expertise to ensure compliance.

Due to this technicity, many companies mainly worry about their own reports, and forget that they, too, can access all published ESEF data and use it to their advantage. Beyond compliance, here lies the true potential of ESEF for issuers: using the data as a tool for benchmarking their peers' data and improving their own financial communication.

For any company, accessing competitors' financial data can be a treasure trove of information. Not only does it provide valuable insights into their business operations and performance metrics, but it informs about their reporting practices. In addition, making your company's statements comparable with other issuers' is absolutely critical to remain in the scope of investors. One bad reporting choice, and your company could be left out of market analyses due to a lack of comparability with your peers.

ESEF data can be very useful to know which metrics (or, to speak the ESEF language, which "tags") are the most commonly used across the market. That's why we designed a solution that helps issuers handle both regulatory compliance and strategic communications  when drafting their statements.*

PRISM: uniting compliance and strategy in a single process

That's where Corporatings' PRISM solution comes in: uniting in a single process the two-fold imperative of regulatory compliance and strategic reporting. To do that, PRISM helps issuers draft their ESEF-compliant reports, while also formatting them in the most strategic way to gain visibility among investors.

First, PRISM allows issuers to control the published data and to ensure the reliability of the ESEF reporting process, reducing the risk of errors and saving valuable time. It is especially designed to ensure that the data in the ESEF format is accurate, complete, and consistent, overall improving data quality for users.

This includes regular updates to ensure that the reports follow the best practices and remain in line with regulatory developments. Beyond automation, many features help professionals perform comprehensive data review, with practical outputs such as quick Excel rendition and a HTML viewer to allow an interactive exploration of the ESEF markup. Other popular features include highlighting changes from former versions, in order to easily compare statements with previous years' reports.

By streamlining the reporting process, PRISM also allows issuers to explore the more strategic uses of ESEF, such as benchmarking and improving financial communications. Indeed, since PRISM has access to all published financial data, professionals can use this knowledge to make the best reporting choices to stand out in the eyes of investors. They just need to choose the perimeter of their benchmark (for instance, whether they need to be compared to a whole sector or just a few competitors). Within their report, PRISM can also highlight the data that differs from common practice and may thus be difficult to analyze for investors.

In short, PRISM is the best solution to turn a technical, regulatory task into a business opportunity to gain a competitive advantage in the market. But don't just take our word for it: according to client company KPMG's financial expert Astrid Montagnier, "PRISM is key to actually taking advantage of the functionalities enabled by the ESEF, rather than simply "complying" with ESEF as a mere compulsory format."

Spend less time worrying about compliance, and more time focused on your financial communication.
Use Prism for free and start benchmarking your ESEF data now!

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Alexandre Prat-Fourcade
Alexandre Prat-Fourcade
Cofounder & CEO