According to Insurance Europe, the timing and sequencing of the taxonomy-related work on risks is very inefficient and this will cause practical difficulties and needlessly double the required implementation efforts. Insurers should therefore be allowed to comply using reasonable best efforts, so that they are not exposed to unnecessary liability risks. They should also not be forced to rely on expensive third-party data providers in order to comply with the proposed obligations.
The draft ESG product templates are already overly complex and long. With the addition of taxonomy-related information, the final templates risk being too detailed, overly complex and long for customers. Therefore, the new changes related to the Taxonomy Regulation should only introduce essential changes to the SFDR RTS.
The industry is of the view that all the KPIs should be reported separately. It does not see the rationale nor the need to apply the same approach to all investments made by a given financial product, since that would exclude all investments that are not reported according to the chosen metric. This would imply that FMPs would not be able to fulfil their reporting requirements. The proposal implies that the choice and use of a certain methodology (turnover, capital expenditure or operating expenditure) is made by the FMP or the reporting company, when in fact it is determined by the screening criteria for the activities under the TR.
Another issue is regarding the challenging implementation timeline. So, the final single template is expected to be published in the Official Journal very late in 2021, shortly before the actual proposed application date of 1 January 2022.
Source: Insurance Europe