Climate Finance Policy Engagement Analysis
Climate Lobbying Overview: Insurance Europe has communicated top-line support for many sustainable finance policies in Europe, but has cautioned against a prescriptive approach to regulatory intervention in this area.
Top-line Messaging on Climate-Related Financial Policy: In its 2022-23 Annual Report Insurance Europe stated support for the role of the finance industry in achieving the goals set out in the Paris Agreement. In the same report, Insurance Europe supported the EU sustainable finance agenda with some exceptions, and in its 2024 Annual Report, it did not support further ambition in EU sustainable finance legislation and advocated for delayed implementation of existing policy.
Position on Regulated Corporate Climate Disclosure: In an August 2022 consultation response, Insurance Europe suggested that the European Sustainability Reporting Standards were overly granular and prescriptive. In a 2023 policy paper ahead of the 2024 EU Elections, Insurance Europe appeared to support the mandatory adoption and disclosure of transition plans, however did not support their inclusion in Solvency II.
Position on Taxonomies: In its 2024 Annual Report Insurance Europe supported a less stringent system for classifying sustainable investments under the EU Taxonomy, and suggested it is not functioning successfully to promote transition financing. In a 2024 joint policy paper, it suggested that the EU Taxonomy reduces competitiveness for re(insurers), despite stating an unclear position in its 2022-2023 Annual Report, and demonstrating broad support in its 2020-2021 Annual Report.
Position on Climate Labels, Standards, and ESG Ratings: In 2023, Insurance Europe gave general support to the creation of a EU product labelling system in consultation response to the ESAs on greenwashing. Insurance Europe stated support for the EU Green Bond Standard in 2021 feedback to the EU Commission, however, in a 2022 position paper, Insurance Europe appeared to advocate for the weakening of the EU GBS by proposing that the standard should take into account transitional efforts. In its 2023 Annual Report it suggested that the EU Green Bond Standard should remain voluntary, and supported the ‘flexibility pocket’ provisions and grandfathering clause for existing green bonds.
Position on Incorporate Climate Factors into Investor Duties: In a 2024 response to the review of EU Sustainable Finance Disclosure Regulation (SFDR), Insurance Europe supported narrowing the number of mandatory Principle Adverse Indicators (PAIs), while in a joint letter in the same year, Insurance Europe called for coordination of changes to SFDR, however pressed for an implementation phase and grandfathering measures in any new regime. In a July 2023 response, it supported lowering the ambition of SFDR by introducing for PAIs. It also did not support the incorporation of customer-facing disclosure requirements or the integration of sustainability preferences into suitability assessments in a 2022 consultation response on EU Insurance Distribution Directive (IDD), while in a 2023 response it did not support the integration of sustainability preferences or sustainable investment information into the Pension Benefit Statement (PBS) under IORP II.
Position on Incorporate Climate Factors into Risk Management and Prudential Regulation: In a 2023 response to EIOPA on the prudential treatment of sustainability risks, Insurance Europe did not support the use of asset shock tests, or the differential treatment of assets based on sustainability risk, a position stated in feedback on the review of Solvency II in 2022. It has supported the European Commission’s proposal to require stress testing and climate scenario analysis as part of the Solvency II review in 2022 comments, however in the same year, it also cautioned against the use of macroprudential regulation in comments to the FSB.