Insurance Europe supports the European Commission’s (EC) revised approach aimed at simplifying regulation, improving competitiveness, and securing sustainable economic development in the EU.
The insurance sector has long recognized the risks linked to climate change and continues to support the EU’s sustainability objectives.
The proposed Omnibus changes retain the essential components of the Corporate Sustainability Reporting Directive (CSRD), including transition plans, while redirecting focus toward essential data (see European Reinsurance Market Strengthen ROE).
This shift allows companies and investors to allocate more resources to actions that directly support environmental goals rather than administrative reporting.
The insurance industry has invested in the development and implementation of the sustainable finance framework and is well-positioned to identify unintended consequences and excessive complexity arising from new rules, according to Europe Insurance Market Rates.
The industry has consistently emphasized the need for reliable data, proportional requirements, and reasonable expectations.
Developing and complying with sustainability strategies, operations, and reporting obligations demand significant expertise and financial investment. Prioritizing the most valuable information remains a key objective.
The first Omnibus initiative’s intent to streamline sustainability reporting and disclosure is a welcome step (see how European Insurers Support Savings & Investments Union to Boost Innovation).
Insurance Europe acknowledges the need for a more efficient reporting framework and commends the EC’s initiative.
Even after simplification, the system will still yield valuable data and remain more advanced than other global equivalents.
Insurance Europe highlights several specific elements in the EC’s Omnibus proposal as particularly relevant:
- Support the “Stop the clock” measure, which gives non-reporting companies more time to adopt amended standards, preventing unnecessary costs and confusion. EU and national policymakers should finalize negotiations promptly or provide clear timelines to ensure legal clarity.
- Eliminate plans for further sector-specific reporting requirements. These added burdens were diverting resources from implementing existing obligations.
- Review and reduce current reporting standards for all affected entities, including third-country firms. The EC should set a clear target for simplification. A focus on key areas will allow significant reductions in complexity. The European Sustainability Reporting Standards (ESRS) should also align more effectively with ISSB standards.
- Maintain the current level of assurance (limited assurance) to avoid additional costs.
- Keep mandatory reporting limited to the largest companies. Allow smaller companies to provide relevant data on a voluntary basis. Reporting thresholds should apply only to firms with over 1,000 employees, measured over two consecutive financial years.
- Address the cost and difficulty of electronic tagging, which remains unaccounted for in current proposals. The EC should pause or phase work on tagging and study how AI developments could reduce or replace this requirement.
- Support the removal of an EU-level civil liability regime, preserving national frameworks.
- Exclude financial services from the Corporate Sustainability Due Diligence Directive (CSDDD) to avoid complex application to investments and insurance clients. This exclusion should be clearly stated in both the recitals and operative text of the CSDDD.
- Postpone the CSDDD transposition deadline and application date by one year to allow companies more time to comply.
- Delete Article 1(2), which preserves national levels of protection. Retaining this clause may hinder competitiveness for EU firms.
- Remove or suspend the underwriting KPI until its relevance has been thoroughly evaluated.
- Retain proposals to introduce a 10% materiality threshold for Taxonomy reporting, simplify templates to reduce data points by approximately 70%, and exclude companies with fewer than 1,000 employees from KPI requirements. Clarify consultation language to ensure effective application of the materiality threshold.
- Maintain the planned reduction of templates related to fossil gas and nuclear activity disclosures, and apply a materiality filter to these templates.
- Simplify the Do No Significant Harm (DNSH) and Minimum Safeguards rules.
- Remove the requirement for Sustainability Risk Plans (SRPs) under Solvency II.
These obligations add substantial reporting demands even though sustainability risk management is already addressed under existing rules such as CSRD and ORSA.
EIOPA’s draft Reporting Technical Standards (RTS) for SRPs also reference CSRD provisions. At a minimum, EIOPA should pause its work until the added value of SRPs is thoroughly reviewed, given their overlap with existing frameworks.
