Insurance Europe responds to ESAs consultation on ESG disclosures

18 August 2020 — press.release
Insurance Europe has published its response to the European Supervisory Authorities' (ESAs) joint consultation concerning environmental, social and governance (ESG) disclosures.

Insurance Europe supports the efforts of the European co-legislators in facilitating the development of a more sustainable economy and welcomes the increased transparency in sustainable investments and sustainability risks brought about by the new Sustainable Finance Disclosure Regulation (SFDR).

Customer information is a key component in supporting the development of sustainable finance, provided that disclosures are balanced and help consumers make informed financial decisions aligned with their objectives. In this context, the draft regulatory technical standards (RTS) are a step in the right direction. However, some changes are needed to make the disclosure regime implementable in practice and to reflect market realities.

Proposed entity-level disclosures should be feasible with respect to financial market participants' activities and based on observable and verifiable facts. In addition, the ESAs should adequately consider implementation challenges and related timing implications, including those related to the quality and availability of existing ESG data. Moreover, the insurance industry takes the view that there needs to be a phased-in approach that allows financial market participants to implement comparable and meaningful disclosures.

Regarding product-level disclosures, there is a risk that the RTS are too prescriptive and will result in overly complex consumer information. Mandatory templates should also be avoided to allow for flexibility in implementation at national level and across various product types. The focus of the RTS should be on what information needs to be disclosed, rather than on the form of these disclosures.

More broadly, it is essential to ensure that there is consistency across related policy developments including the EU taxonomy, the Non-Financial Reporting Directive (NFRD) review, and ongoing amendments to the Solvency II and Insurance Distribution Directive (IDD) delegated acts with respect to sustainability preferences.


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