Insurance Europe has published its updated key messages on the EC’s proposals for the Corporate Sustainability Reporting Directive (CSRD), of which the industry is highly supportive.
The insurance industry is Europe’s largest institutional investor, with €10 trillion of assets under management. For insurers to make appropriate investment decisions and comply with sustainability regulation it is vital that consistent, comparable and machine-readable sustainability data is available, and that it can be accessed and used efficiently. The CSRD, together with the European Single Access Point initiative, can achieve this.
A limited number of simple, but important improvements are needed for the CSRD to work as intended:
- Consolidated reporting — The option to report at consolidated (group) level is key and should apply to public interest entities, as it does for others.
- Allow for multiphase delivery of standards — It is vital that any delays (such as those under discussion by co-legislators) do not apply to data needed for mandatory reporting requirements. The legislation should therefore make it clear that the European Financial Reporting Advisory Group can develop standards in a multiphase approach. This will allow it to give priority, and avoid delays, to information needed for reporting under the Sustainable Finance Disclosure Regulation and EU Taxonomy Regulation.
- Assurance — The decision to move to reasonable assurance should be based on an assessment once the standards have been in use for a number of years and not be automatically linked to the development of standards on reasonable assurance.
- An SME definition which works for insurance — Insurers have fundamentally different balance sheets and revenues to other industries due to the nature of their business. The definition of SME undertakings in the draft text should therefore be refined to reflect SME insurers’ characteristics.