Europe’s insurers welcome exemption from due diligence rules
Insurance Europe, the federation that represents the European insurance sector, has welcomed news that the European Parliament and member states agreed the corporate sustainability due diligence directive (CSDDD) but excluded financial institutions.
The CSDDD will hold large companies responsible for human rights and environmental violations along their value chains.
The text will be subject to further technical discussions and finalisation, and so last minute changes could be made. But for now, Europe’s insurers are happy that they will not be held accountable for their downstream supply chain exposures.
“It was decided that for financial services, including the insurance industry, the directive will apply with respect to their own operations and upstream activities but not at this time to their downstream value chain. Insurers will also be required to adopt and put into effect climate transition plans. Furthermore, a review clause has been included to assess inclusion of downstream value chains for financial services at a later stage,” explained Insurance Europe.
Referring to the provisional agreement, Philippe Angelis, manager at the federation, said: “Insurers are committed to the sustainable transition, and therefore welcome the new directive, including the cross-sectorial obligation to adopt transition plans in line with the Paris agreement. The complexity brought by the nature of insurance activities, where the contract beneficiary is often different from the insurance client (company pensions schemes for example), or where mandatory insurance products are provided to fulfil a social role, makes the inclusion of insurers’ downstream value chain very challenging and complex in practice. The agreement reflects these challenges.”
