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Insurers welcome review of Non-Financial Reporting Directive, call for ESG data/assessments to be reported directly by investee companies

Insurance Europe has published its response to a consultation by the European Commission on an impact assessment on the review of the Non-Financial Reporting Directive (NFRD), which covers reporting on topics such as environmental protection and social responsibility.

Insurance Europe welcomed the review and acknowledged the need to update the Directive to address an increase in sustainability data requirements, as well as wider reforms currently taking place on sustainable reporting. This includes the regulation on sustainability disclosures in the financial services sector and the regulation on a classification system (taxonomy) of sustainable economic activities.

There is strong support in the insurance industry for transparent ESG data/assessments to be reported directly by investee companies. This will help address issues with the availability and quality of data that can currently hinder insurers' work to comply with their regulatory obligations in relation to ESG data.

While strong requirements would be helpful for companies in determining what to report on, Insurance Europe highlighted the need for the Commission to consider flexibility, materiality and proportionality when developing guidance or requirements.

The industry also called for a separation of financial reporting requirements and ESG reporting This would help to avoid operational overload and to allow flexibility in how insurers design and implement internal processes and reporting timetables.

Published 9 March 2020