Insurance Sector Backs EU Proposal for Sustainability Regulation Delays
The insurance industry has expressed its support for the European Commission’s (EC) proposal to delay the enactment of crucial sustainability regulations under the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) until 2028. This postponement is part of the EU’s inaugural Omnibus package, intended to simplify reporting requirements while broader legislative discussions are ongoing.
In a recent position paper, Insurance Europe reiterated its dedication to tackling climate change and aligning with the European Union’s sustainability objectives. However, the industry emphasizes the necessity for additional time to evaluate the implications of these regulations, ensuring that companies remain concentrated on substantive sustainability initiatives rather than mere administrative compliance.
“As part of the ‘Stop-the-clock’ mechanism within the EU’s first Omnibus package, large companies who have yet to begin CSRD reporting and listed SMEs would see a two-year delay, while the CSDDD’s transposition and first phase would be postponed by one year,” the federation mentioned.
“In line with the European Commission’s commitment to reducing reporting burden and simplifying its laws, the industry stresses that more time is needed to sufficiently assess the impact of the two legislations, ensuring that excessive regulatory burden is avoided, preventing diversion from real action on sustainability.”
Insurance Europe has presented several recommendations for the Omnibus package, focusing on four principal areas:
For the Corporate Sustainability Reporting Directive (CSRD): The industry advocates for a commitment to revising and reducing existing reporting standards. It also suggests doing away with requirements for more detailed, sector-specific reporting while keeping the current assurance mandates. Furthermore, mandatory reporting should only pertain to the largest companies, and the proposed Omnibus improvements should be reflected in electronic tagging requirements and timelines.
Regarding the Corporate Sustainability Due Diligence Directive (CSDDD): Insurers are in favor of omitting an EU-level civil liability regime and propose removing the review clause concerning the inclusion of financial services. They also endorse extending the transposition deadline and the first application date by one year, as well as deleting Article 1(2), which mandates maintaining national levels of protection.
Concerning the EU Taxonomy: The industry supports removing the underwriting Key Performance Indicator (KPI) while retaining the proposal for a 10% materiality threshold. It also supports significantly reducing specific reporting templates and simplifying the ‘Do No Significant Harm’ (DNSH) criteria.
For Solvency II: The insurance sector calls for eliminating the requirement to develop Sustainability Risk Plans (SRPs) under the directive.
While the proposed delays provide more time to analyze the regulations’ impact, the insurance sector maintains that a balance between robust sustainability measures and manageable compliance requirements is crucial for long-term success.
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