Since 2021, the bureaucratic burden has increased for European companies – especially their CFO teams, as new regulations like ESEF and the CSRD have arrived. However, one of the new requirements might be a blessing in disguise for the efficiency of the CFO team.
Firstly, let us clarify what these regulations are about. The ESEF (European Single Electronic Format) regulation requires issuers (companies listed on European exchanges) to issue annual reports in a machine readable format. Specifically, this means that the PDF document has been banned in favor of XHTML documents, to which many companies must also apply “tagging” of financial data and other important facts. The CSRD (Corporate Sustainability Reporting Directive) requires eligible companies to collect and report on non-financial sustainability/governance/social KPIs and facts, and to similarly apply “tagging” of such data – also in an XHTML format. In both regulations, the “tagging” is applied using so-called “inline XBRL tags”, and the resulting official file is either an “un-tagged” XHTML file, or a zipped package containing an XHTML file and multiple XML files containing the “tagging” metadata.
But this sounds so much harder than before – when we just made PDFs? Well, sure – it sounds harder. And most companies today have created a more difficult process, since they continue to make the PDF, and then have added to that process (1) an XHTML conversion, and (2) XBRL tagging after conversion. This has turned out to be time consuming, and definitely not any easier than before. But there is a blessing to be found here.
The blessing is; find a way to not make the PDF. The PDF is a very inefficient way of making reports, which I have argued in another blog post here: Hot take: Don't make PDF reports.
If you are able to save all the unnecessary time spent making a PDF first, you can rather apply a “web first” approach. XHTML is a web format, and web reports are actually much better to read on computer screens, mobile screens and tablets - since they can adjust to different screen sizes.
We recommend that you dare to digitalize, and dare to be efficient, and approach both your annual and your interim reports with the “web first” approach. You will be rewarded with cost savings, time savings and a happier CFO team.
For the Nordics: Both Euronext Oslo and Nasdaq Nordic exchanges confirm that they accept XHTML or Zip files rather than PDFs.
Reach out to us (Wrepit) to learn about the easiest way to make “web first” reports.