Insurance Europe proposes changes to further improve the EU’s Taxonomy Regulation. In a position paper published today, the industry backs EU efforts to both simplify sustainability reporting and disclosure requirements, whilst delivering the sustainable transition. It also calls for ‘removing or suspending’ the insurance underwriting KPI which is proving burdensome to the industry.
The paper is in response to a European Commission consultation on the current technical discussions – level 2 measures - of the EU’s Taxonomy – a regulation which sets criteria for what constitutes an investment that contributes to the EU’s sustainability goals.
The industry notes that the insurance investment KPI is not proving useful for assessing insurers contribution to sustainable investment and is creating too much reporting burden. Among other suggestions, to enhance the impact of the regulation Insurance Europe therefore suggests removing or suspending the KPI until a thorough review is done to assess its added value.
For the insurance investment KPI, the industry supports the introduction of a 10% materiality filter to simplify reporting. This should exclude companies with fewer than 1000 employees from the denominator. As part of the simplification efforts, Insurance Europe also proposes further simplifying reporting templates on performance and exposures to fossil gas and nuclear activities.