Insurers have called on the European Commission (EC) to implement a bloc-wide single access point for sustainability-related company information, arguing that access to reliable public data is currently limited and needs to be improved.

Insurance Europe

Trade body Insurance Europe welcomed plans from the EC for a European Single Access Point (ESAP) for environmental, social and governance (ESG) data but urged the bloc’s executive arm to fast-track its proposals.

The EC is currently seeking feedback on its Capital Markets Union Action Plan – launched in September last year – which proposes to improve access to ESG data by building an ESAP.

The objective of the ESAP is to facilitate the flow of information between member states, investors and listed firms to further integrate capital markets and enable a more efficient allocation of capital across the EU. The EC plans to have a legislative proposal on this by the third quarter of 2021.

In its response to the consultation, Insurance Europe said “robust, comparable and reliable” ESG data is needed for identifying and assessing sustainability risks in insurers’ activities.

The trade body explained that improved data standards are necessary to enable investors to steer their portfolios towards sustainability objectives, in line with the Paris Agreement and the European Green Deal.

“Unfortunately, the availability of reliable public ESG data is currently limited and should be improved,” Insurance Europe said. “A centralised ESAP would therefore help to achieve better comparability, increased transparency and lower barriers and costs, as well as help data preparers by eliminating multiple different requests for information.

“The ESAP should, therefore, be established as soon as possible. It is an important initiative of the Capital Markets Union action plan, which Insurance Europe fully supports,” the body continued.

A bloc-wide data access point should prioritise ESG data relating to the non-financial reporting directive, the sustainable finance disclosure regulation and the EU taxonomy, it said.

It must also include relevant ESG information already collected by European and national institutions and focus on the information needs of companies and investors, and not lead to additional obligations in financial and regulatory reporting.

Insurance Europe warned that such a structure would only be supported by the industry if it avoids adding to the regulatory burden faced by firms and does not include “redundant” reporting channels, with the ESAP only used to fulfil existing reporting requirements.

The ESAP should also provide data coverage necessary to comply with national legislation and make data available in a standardised digital format.

Earlier this week, trade body hit out at proposed reforms to capital rules published by the European Insurance and Occupational Pensions Authority (Eiopa), which it warned could disincentivise (re)insurers from investing in so-called green assets and would limit the support the sector could provide to aid the EU’s post-pandemic recovery.

The commentary from Insurance Europe comes after Swiss Re outlined bold plans to be a net-zero emissions company by 2050, which included a pledge to ramp its green, social and sustainability bond exposure to $4bn. This will include increasing social and renewable infrastructure investments by $750mn.

It also comes after Eiopa launched a call for evidence on the impact on non-life underwriting and pricing in light of climate change.

The regulator is pushing plans to shift regulation towards so-called “impact underwriting”, which will assess how insurers can apply their data, expertise and capacity to incentivise policyholders to mitigate insured risks via risk-based pricing and consider in their underwriting strategy measures that contribute to climate change mitigation. 

The move is the latest sign that regulatory focus is expanding beyond viewing environmental, social and governance through the lens of insurers’ investment standards to scrutinise what it means for their main business of underwriting.

But Insurance Europe warned last week that the concept of impact underwriting is not sufficiently well-defined to assess what effects it could have on the availability and affordability of insurance.