German insurers seek simplified CSRD rules
The German insurance association has called on its government to lobby harder for a reduction and simplification of the reporting requirements required by the Corporate Sustainability Reporting Directive (CSRD) and says that the reporting costs are up to eight times higher for insurers than most companies.
The German version of the CSRD has now been published in draft form. After adoption in the cabinet, the federal government will forward the draft law to the Bundestag, where it will be discussed further.
The GDV said in its latest statement that sustainability reporting is inefficient and expensive, and companies and their customers suffer as a result. Jörg Asmussen, general manager of the GDV said: “Employees are more concerned with writing reports than with developing sustainable products.”
“The federal government estimates the one-off compliance costs at €846m for 14,600 companies that are required to report. That would be around €58,000 per company. For the insurance sector, however, we expect costs to be 4 to 8 times higher on average. For large insurance groups, the costs are actually in the two to three-digit million range,” added Asmussen.
The government estimates that the initial costs of meeting the law’s requirements will be €846m. The draft bill also states that the costs for ongoing sustainability reporting will be €1.58bn in total.
Asmussen is not impressed. “It is incomprehensible why the costs for setting up reporting for the first time with the necessary qualification of personnel and the clarification of content and methodological questions should be lower than for ongoing reporting. If efforts to reduce bureaucracy are to be successful, it is essential to find realistic, transparent and comprehensible approaches to determining compliance costs,” he said.
The GDV says that the group clause within the CSRD is particularly important for insurers and needs to be implemented to provide some relief.
The association explained that most insurers are organised into groups or corporations. A group of companies can consist of up to 15 formally independent companies. The group clause ensures that these groups only have to prepare one sustainability report.
“The group clause should definitely be retained in the further proceedings. If every subsidiary had to create its own report, it would be absolutely overwhelming with unnecessary information and costs,” says Asmussen.
The GDV head said that there needs to be a focus on decision-relevant data. Doubts are growing among German insurers as to whether the goals of sustainability reporting will actually be achieved.
Asmussen said: “To be clear: we insurers have supported the collection and publication of sustainability data from the beginning. Without them there is no sustainable transformation. But we won’t get anywhere with the ‘a lot helps a lot’ approach. The focus should be primarily on decision-relevant data that provides control impulses for companies, for example in capital investments or in risk management.”
The GDV reckons that companies will need to collect between 167 and 783 data points. “This means that employees are more concerned with writing reports than with developing sustainable products,” said Asmussen.
The GDV wants the federal government to lobby the EU commission for a significant reduction in sustainability reporting requirements.
“We are pleased that the federal government has recognised the need for adjustments to the European Sustainability Directive…For example, insurers could imagine concentrating their reporting on content that can be proven to make a contribution to sustainability. The requirements for smaller, non-capital market-oriented companies with up to 500 employees should also be noticeably reduced. In addition to the general standards, the planned introduction of separate, sector-specific requirements should initially be dispensed with,” said Asmussen.
