Insurers Clamour for Practical ESG Reporting Rules Under CSRD

Highlights

• European insurers are lobbying the European Commission to simplify CSRD sustainability reporting requirements.
• Insurance Europe and the European Insurance CFO Forum solicit clarity on double materiality and proportionality in ESRS.
• The industry recommends qualitative reporting and optional GHG accounting to align with a global baseline.

European insurers are urging the European Commission to simplify the sustainability reporting process required under the Corporate Sustainability Reporting Directive (CSRD).

Their concern follows revisions released by the European Financial Reporting Advisory Group (EFRAG), which were meant to make reporting less complex but, according to insurers, still leave too many technical layers in place.

The insurance trade bodies Insurance Europe and the European Insurance CFO Forum have written a joint letter to the Commission requesting more decisive simplifications to the European Sustainability Reporting Standards (ESRS).

Read More: Consultation Opens on Simplified ESRS Drafts Under Omnibus Directive

These standards define what companies must disclose under the CSRD, including environmental, social, and governance data. Although EFRAG recently reduced data points by 57%, cut mandatory and voluntary disclosures by 68%, and shortened the overall framework by more than half, insurers say the standards are difficult to interpret and apply.

EFRAG’s sustainability board chair, Patrick de Cambourg, said that these revisions are intended to make the ESRS more usable so that sustainability reporting helps resilience, investment, and long-term value creation.

However, trade associations insist that further clarity is necessary. They have asked the Commission to confirm whether fair presentation principles should take precedence over detailed compliance rules and to embed proportionality more firmly in the system, making the reporting process better suited to company size and capacity.

Also Read: EU to Expressly Set Out Sustainability Reporting Rules by October

A major concern for insurers is the complexity of double materiality assessments, which require companies to evaluate how sustainability issues affect financial performance and how their operations affect the environment and society. They consider this process burdensome, particularly for sectors dealing with large data sets and varying methodologies in different regions.

Insurers have also raised concerns about forward-looking reporting obligations, which involve predicting future financial outcomes linked to environmental or social factors.

They caution that such estimates come with high estimation risks, inconsistent measurement approaches in different markets, and a heightened risk of litigation. Instead, they recommend limiting these disclosures to qualitative information, which they see as a more practical and balanced method.

On climate reporting, the industry seeks flexibility. Insurers and financial institutions are of the opinion that companies using intensity-based greenhouse gas (GHG) targets should not be compelled to disclose absolute reduction targets.

See Also: EU Weighs Omnibus Proposal, Insurers Left Out of CSRD: Report

They also propose making GHG accounting optional, suggesting this as a path to align EU standards with a global baseline rather than adding another layer of region-specific obligations.

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