Insurance Europe welcomes the new approach by the European Commission to enhancing competitiveness and ensuring sustainable prosperity through simpler sustainability rules.
"We fully recognise the need for the sustainability framework to be improved and commend the European Commission for its commitment to simplify the framework", Thea Utoft Hoj Jensen, director general of Insurance Europe, wrote in a letter sent to the Executive Vice-President Séjourné and Commissioner Valdis Dombrovskis just before the EC published its simplification approach and annual work programme, that sets out a series of ‘Omnibus’ packages with the first focussed on sustainable finance rules.
The insurance industry reaffirms that it will continue to be a key player in helping to address climate change and remains committed to supporting Europe’s sustainability goals. It is well placed to share insights on how the existing requirements can be streamlined and new burdens limited, based on the considerable effort it has already made in implementing the EU’s sustainable finance framework.
Insurance Europe highlights the following key priorities for the first ‘Omnibus’ package:
• Corporate Sustainability Reporting Directive (CSRD): as the cornerstone of sustainability data reporting, changes on the CSRD should focus on limiting regulatory burdens and removing overlap with other regulations. Work on additional sector specific reporting should be stopped at least until existing reporting has been assessed.
• EU Taxonomy Regulation: this is not proving useful for insurers’ investment decisions, nor does it fairly portray insurers’ contributions to sustainability. The focus should now be on reducing burdens achieved, by introducing a materiality filter to reporting obligations.
• Corporate Sustainability Due Diligence Directive (CSDDD): the requirements need to be simplified. The cross-sectorial requirement for “net zero” transition plans is vital for triggering climate mitigation and adaptation but to simplify and avoid overlaps they should be based on the existing reporting requirements under CSRD.
• Solvency II: should be part of the package to address unnecessary duplication in sustainability risk management and reporting and to reduce complexity for insurers.