Insurers’ body calls for “workable” disclosures for Taxonomy-related data
The Taxonomy Regulation allows European Supervisory Authorities (ESAs) to develop additional disclosure obligations for sustainable products that invest in Taxonomy eligible activities, by amending regulatory technical standards (RTS) of the Sustainable Finance Disclosure Regulation (SFDR) to create a single template for sustainability disclosures. Responding to a consultation by the ESAs, Insurance Europe welcomed the effort towards ensuring consistency between SFDR and the Taxonomy Regulation, but highlighted areas that need urgent attention.
The Insurers’ association pointed out that there is insufficient availability of reliable ESG data, especially related to Taxonomy. Due to this, insurers should be allowed to comply using reasonable best efforts, so they are not exposed to unnecessary liability risks or be forced to rely on expensive third-party data providers to comply with these obligations.
The body also pointed out that the timeline for implementation is challenging, since it comes into force by 1 January 2022 while final templates are expected to be published officially only by the end of 2021. The addition of taxonomy-related information will result in the final templates being too detailed, overly complex and long for consumers. “The new changes related to the Taxonomy Regulation should only introduce essential changes to the SFDR RTS,” said Insurance Europe, in its consultation. The association also added that the disclosure templates were tested only in two countries, which is not representative of the EU markets and consumers. It called on the ESAs and the European Commission to address these issues.