Europe’s insurers lobby EFRAG as it shapes sustainability reporting changes

Europe’s insurers and their associations are lobbying for key areas of sustainability reporting to be streamlined following the European Commission’s Omnibus package, published in February 2025. As the development of the European Sustainability Reporting Standards (ESRS) and implementation of the Corporate Sustainability Reporting Directive (CSRD) moves to the European Financial Reporting Advisory Group (EFRAG), insurers have been presenting their case for changes ahead of EFRAG’s report to the EC, expected by the end of October.

Insurance Europe said revision of the ESRS is a “key opportunity to simplify and streamline reporting requirements”.

In a letter to EFRAG, it added that the review “can significantly alleviate administrative burdens for European undertakings, improve the usability of the standards in practice and contribute to maintaining Europe’s competitiveness, all while upholding the original sustainability objectives set by the Commission.”

The insurance association said insurers are “well placed to assess the potential unintended consequences” of the rules, as well as identify “undue complexity”. German insurance association GDV said it is also drawing on insurers’ experience to make sustainability reporting “more targeted, simpler, and more effective”.

Insurance Europe lists several key areas for improvements, including the double materiality assessment, which it said is “overly detailed and prescriptive”. It also identified where the minimum disclosure requirements could be streamlined or are of low value to users, and highlights where mandatory content is included in guidance sections of the ESRS.

“These issues create unnecessary complexity, increase compliance burdens and detract from the focus on meaningful, decision-useful sustainability information,” it said.

Insurance Europe also stressed that the changes in the standards should allow for voluntary grandfathering provisions, in particular to ensure that companies already applying sustainability reporting rules in the first wave of applications have legal stability and are not faced with the risk of non-compliance with the simplified ESRS.

“It is important that these companies have the ability to roll forward their current reporting without needing to engage in new implementation discussions with auditors,” it told EFRAG.

In its own submission to EFRAG, the GDV said sustainability reporting standards should be more aligned with companies’ business models to give companies greater flexibility.

GDV managing director Jörg Asmussen said: “We are committed to a reporting framework that is simple, feasible and meaningful without losing its purpose. Climate change is increasing risks for the economy and society, and insurers are key players in managing and insuring these risks. However, this requires a sustainable framework.”

The GDV said sustainability reports should provide an accurate picture of an insurer’s positive and negative sustainability activities, rather than set against a checklist of individual requirements, and be more tailored to the needs of users.

“The target audience is primarily investors. By focusing on numbers and streamlining the qualitative requirements, the scope of the reports could be significantly reduced without compromising their informative value,” Asmussen said.

The GDV is also seeking to simplify reporting of insurers’ indirect CO2 emissions along their value chains, in particular for insureds.

“Companies should only be required to record those indirect emissions that they can influence through their own actions,” said Asmussen.