In a joint letter sent to the European Commission, Insurance Europe and the European Insurance CFO Forum welcome efforts to simplify the European Sustainability Reporting Standards (ESRS) but warn that the current proposals still risk excessive complexity and reporting burden.

While supporting the EU’s climate and sustainability objectives, insurers argue that revised ESRS should focus strictly on decision-useful and material information, avoid introducing new reporting obligations, and refrain from overly prescriptive requirements that could divert resources from effective sustainability management. The letter stresses the need to trust companies, auditors, and supervisors in applying materiality, and cautions against rules that could be seen as indirectly mandating behavior - particularly in areas such as climate scenario analysis.

“Simplification is about trust, proportionality and decision-useful information. Sustainability reporting should help companies manage real risks and support Europe’s long-term competitiveness, not divert resources through unnecessary complexity,” said Philippe Angelis, Head of sustainable finance & corporate reporting at Insurance Europe.

Insurance Europe also raises concerns about governance and process at EFRAG, suggesting recent difficulties highlight limits in its current multi-stakeholder model. Simplified, proportionate reporting standards, the industry concludes, are essential to safeguard Europe’s competitiveness while still supporting the green transition.

The full document was made available by Insurance Europe in a LinkedIn post.