EFRAG assesses interest in voluntary ESAP template for SME financing

On 2 April 2026, EFRAG published a draft assessment report evaluating whether a voluntary reporting template for SMEs on the European Single Access Point (ESAP) would help smaller companies attract financing. The report, requested by the European Commission in July 2025, is based on interviews with 85 stakeholders and surveys from 39 respondents. The public consultation runs until 27 May 2026.

The central finding is sobering: EFRAG does not currently see sufficient interest from finance providers and facilitators for the voluntary template to function as a meaningful tool. Most banks, pension funds, and insurance companies expressed no interest in using it, while venture capital and private equity firms view it as redundant alongside existing commercial databases.

What is ESAP and why does SME financing matter?

The European Single Access Point, established under Regulation (EU) 2023/2859, is a pan-European platform designed to centralise publicly available financial and sustainability-related information about EU companies. ESMA is mandated to establish and operate the platform by 10 July 2027. ESAP does not create new reporting requirements — it consolidates data already required by 19 EU regulations and 16 directives into a single searchable, digital repository.

The Commission’s initiative would extend ESAP to allow unlisted SMEs to submit information voluntarily from 2030. The template would function as a standardised digital business card — containing key financial, operational, and qualitative information — to help investors screen potential investment targets more efficiently.

This initiative sits within a broader policy context. The EU’s Competitiveness Compass identifies closing the innovation gap as a strategic priority, and the March 2024 Eurogroup statement called for concrete action to boost risk capital for innovative, fast-growing companies. Europe’s venture capital market remains significantly underdeveloped relative to the US: annual VC investment in the US is six to eight times higher than in the EU, and the EU accounts for just 5% of global VC flows compared to 52% for the US and 40% for China.

Europe’s structural financing problem

The EFRAG report devotes substantial space to diagnosing the structural issues behind Europe’s SME financing gap — and the picture it paints helps explain why a voluntary template alone is unlikely to bridge it.

Europe’s financial system remains overwhelmingly bank-centric. Banks provide approximately 70% of business debt in the EU, compared with around 20% in the US. However, banks are generally unable to finance early-stage innovative companies. Basel III capital requirements, volatile cash flows, reliance on intangible assets (intellectual property is not accepted as collateral), and limited securitisation markets (0.3% of GDP versus 4% in the US) all constrain bank lending to startups.

The result is a reliance on venture capital and private equity that Europe’s market cannot adequately supply. The scale-up gap is particularly acute: EU scale-ups typically raise 50% less capital than Silicon Valley peers by their tenth year. Government agencies provided 37% of total EU VC funds raised in 2023, yet institutional investors remain largely absent — European pension funds allocate less than 0.01% of assets to VC, more than 100 times lower than in the US.

Exit opportunities compound the problem. Without robust IPO and M&A markets, early-stage investors cannot monetise returns efficiently, which suppresses willingness to fund innovation at all. The EU has over 20 central counterparty platforms and central securities depositories for equities — the US has one of each. For SMEs, the initial cost of listing can reach 15% of the amount raised, and 42% of firms cite regulatory burden as their primary reason for not going public.

What stakeholders actually said

EFRAG’s assessment is built on interviews across the full spectrum of financing providers, from business angels to pension funds, alongside SMEs and their representatives. The response pattern reveals a clear divide between those who see ESAP as potentially useful and those who regard it as redundant.

Interest from finance providers

Interest from SMEs

SMEs indicated willingness to provide information voluntarily, but only under specific conditions: the template must demonstrably improve their chances of obtaining financing; the cost and effort must not exceed the benefits; and ESAP must offer functionalities beyond a simple data repository. The feedback also revealed significant regional variation — startups in larger markets like France and Germany felt less need for ESAP, while those in smaller or less-developed ecosystems (Ireland, Cyprus, Spain, Norway) saw more potential value in reaching a wider European investor base.

A consistent concern across jurisdictions was confidentiality. Startups would ideally present the kind of detailed information shared during pitch events — innovation ideas, business models, recent valuations, capital requirements — but this is commercially sensitive. Many stakeholders argued for a platform with tiered access levels, where basic information is public but more detailed data is available only to verified investors upon request.

What a template could contain

While the report’s primary purpose is to assess interest rather than finalise template content, EFRAG collected preliminary input on what information investors would expect. The consensus was that the template should combine qualitative and quantitative data, and that content should vary by lifecycle stage.

On comparability, most investors told EFRAG that harmonised GAAP figures were not essential at the screening stage — trends, company size, and development stage matter more than precise accounting alignment. Local GAAP was considered sufficient for SMEs, with the caveat that the applicable framework should be stated. On reliability, audited information was not deemed necessary for startups (due diligence serves that function), though companies should be able to indicate whether their data has been audited.

Conditions for the template to work

The most consistent feedback EFRAG received was that a voluntary ESAP template is at best one component of a much larger set of reforms needed to address European SME financing. Several preconditions emerged repeatedly.

EFRAG itself concluded in its draft assessment letter that a separate, purpose-built database — rather than ESAP — might better serve the SME ecosystem. A dedicated platform could offer tailored functionalities such as confidential data sharing, investor matching, and integration with national registers, all of which are difficult to implement within ESAP’s current legislative framework.

Implications for ESG data and sustainability reporting

The EFRAG assessment has indirect but important implications for the European sustainability reporting landscape. ESAP is already set to receive mandatory sustainability statements from companies subject to the CSRD and CSDDD from January 2031. The proposed voluntary SME template would extend the platform’s scope into a new category of users — unlisted companies that currently have no reporting obligations under EU law.

Several respondents noted that ESG information (climate strategy, gender balance, carbon footprint) and links to VSME reports should feature in the template. This aligns with the growing convergence between financial and sustainability data in investor decision-making. For ESG reporting platforms and data management providers, the initiative signals continued regulatory momentum toward structured, machine-readable sustainability disclosure — even for entities well below the CSRD threshold.

There is also a supply-chain dimension. Several stakeholders identified the potential for a pan-European SME database to support supply-chain due diligence — helping large corporates find suppliers and assess their sustainability credentials. This use case intersects directly with the CSDDD and CSRD value chain reporting requirements that are reshaping how companies track upstream and downstream ESG risks.

What happens next

The consultation on EFRAG’s draft assessment is open until 27 May 2026. Comments can be submitted through EFRAG’s website, and the organisation is also scheduling additional interviews with interested parties during the consultation period.

Following the consultation, EFRAG will finalise its assessment report and submit it to the European Commission by the end of June 2026. The Commission will then decide whether to proceed with the initiative. If it does, a second phase would involve EFRAG developing the actual content and structure of the voluntary template.

Given the mixed-to-negative feedback from key stakeholder groups, the most likely outcomes are that the Commission either scales back its ambitions for the voluntary template, conditions any further development on the availability of enhanced ESAP functionalities, or explores a dedicated platform separate from ESAP. The report makes clear that addressing the EU’s SME financing gap requires structural capital market reforms — regulatory harmonisation, deeper exit markets, mobilisation of institutional capital — rather than a data repository alone.

At Generation Impact Global, we track EFRAG’s evolving standards and regulatory outputs — from SFDR disclosure requirements to ESRS implementation guidance — to help financial institutions and corporates stay ahead of the EU’s rapidly shifting sustainability reporting landscape.