In a formal letter to the European Financial Reporting Advisory Group (EFRAG), Insurance Europe, the federation representing European insurers and reinsurers, has reiterated its strong support for EFRAG’s central role in shaping the EU’s sustainability reporting framework under the Corporate Sustainability Reporting Directive (CSRD).

Amid the European Commission’s Omnibus initiative to revise the European Sustainability Reporting Standards (ESRS), Insurance Europe emphasized the need for simplification without sacrificing substance. The letter urges that the current revision process be seized as a chance to reduce administrative burdens, improve the usability of the standards, and protect Europe’s economic competitiveness, while continuing to advance the EU Green Deal and Sustainable Finance Action Plan goals.

The federation highlighted specific technical concerns in the existing ESRS structure, including:
 

• The overly prescriptive nature of Double Materiality Assessments (DMA),
• Redundant or low-value Minimum Disclosure Requirements (MDR), and
• Confusion caused by mandatory content hidden in guidance sections.

Insurance Europe also flagged sector-specific issues, such as unclear consolidation scopes for leased assets and misalignment in greenhouse gas emissions reporting boundaries, which currently diverge from global standards like the GHG Protocol and IFRS S2.

The letter includes high-level recommendations aligned with EFRAG’s simplification levers and calls for voluntary grandfathering provisions to protect early adopters—so-called "Wave 1" companies—who have already made substantial investments in sustainability reporting. The federation stressed that these companies should be able to continue their existing practices without facing compliance risk or needing to renegotiate audit requirements.

Insurance Europe concluded by reaffirming its readiness to engage further with EFRAG to ensure the reporting framework remains meaningful, manageable, and future-proof.

Here’s is a summary of Insurance Europe’s key recommendations:

1. Double Materiality Assessment (DMA)
 

• Simplify structure and reduce prescriptiveness of DMA disclosures.
• Allow more flexibility for companies to determine what is material, avoiding a “checklist” approach.
• Clarify guidance to prevent duplication and over-reporting.

2. Minimum Disclosure Requirements (MDR)
 

• Elminate or streamline disclosures that add little decision-useful value.
• Focus MDRs on material issues rather than enforcing blanket requirements.
• Improve consistency across topics to reduce overlap and ambiguity.

3. Application Requirements
 

• Clearly distinguish between mandatory and non-mandatory content.
• Remove legally binding elements from guidance sections to reduce confusion and legal uncertainty.
• Ensure that guidance serves as support, not hidden compliance obligations.

4. Reporting Boundaries
 

• Align GHG emissions boundary definitions with GHG Protocol and IFRS S2 to support global comparability.
• Reconsider how leased assets are treated in consolidation scope to avoid misleading disclosures and reporting burdens.

5. Grandfathering for Early Adopters
 

• Introduce voluntary grandfathering provisions for Wave 1 companies.
• Allow firms to roll forward their 2024 disclosures without renegotiation with auditors or reimplementation under simplified rules.
• Ensure legal certainty and protect prior investments in systems and processes.

These recommendations aim to enhance clarity, reduce complexity, and ensure the ESRS framework remains both practical and effective across industries, especially for insurers.