The German insurance association, GDV, is backing the European Commission’s plan to simplify corporate sustainability reporting requirements by consolidating existing rules through a so-called omnibus package.
The package, which aims to bundle existing and future reporting obligations, reduces administrative burdens on companies, said GDV in a statement. An increasing amount of reporting requirements are “detrimental to competitiveness”, and hurt the economy during the green transition phase, it added.
“Sustainability information is important for us as investors and providers of risk coverage. However, the reports must be more focussed,“ said GDV’s chief executive officer Jörg Asmussen.
The CEO added that the goal set by the Commission to cut sustainability reporting requirements by 25% “is a good signal”.
“We need sustainability reporting that focuses less on quantity and more on the quality of the information. The better the data, the easier it is for insurers to take sound decisions in terms of sustainability,” Asmussen said.
GDV’s stance on cutting corporate sustainability reporting requirements echoes the position of the German government pressing the European Commission to scale back sustainability reporting regulation.
The government has asked the Commission to postpone the application deadline for the Corporate Sustainability Reporting Directive (CSRD) and change the threshold in terms of turnover and employees to relieve companies from reporting obligations.
Rigid thresholds are unsuitable for small and medium-sized insurers, according to GDV.
“Due to their high turnover and balance sheet volume, almost all German insurers, including small regional undertakings, are considered large companies and are therefore subject to the same reporting obligations as international groups,” it added.
The criteria for reporting pose major challenges particularly to smaller undertakings, Asmussen said.
Therefore, GDV is calling for the introduction of industry-specific size categories or for insurers to only be subjected to the relevant reporting requirements if they have more than 250 employees, in line with the principle of proportionality.
The association is also proposing to reduce the scope of reporting requirements under the existing European Sustainability Reporting Standards (ESRS) by focusing on “decision-critical data”, and to postpone the development of sector-specific ESRS, according to its position paper.
It demands the abolishing of new requirements for sustainability risk plans based on the amended Solvency II Directive that are “redundant” given the framework and the transition plans required under the Corporate Sustainability Due Diligence Directive (CSDDD), and align different pieces of the sustainable finance framework, including Taxonomy and Sustainable Finance Disclosure Regulation (SFDR), the paper added.
“It should not be about including as many companies as possible [under the reporting framework], but the right ones,” Asmussen said.
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