3rd August 2022

EU insurers support ISSB’s SDS as global baseline
Trend

Insurance Europe has responded to a consultation conducted by the International Sustainability Standards Board(ISSB) regarding exposure drafts of two International Financial Reporting Standard(IFRS) Sustainability Disclosure Standards(SDS): one covering general sustainability-related disclosure requirements IFRS S1) and the other climate-related disclosure requirements(IFRS S2).
The ISSB can help to avoid global fragmentation and overlapping requirements in the field of sustainability reporting by creating a global baseline, in which jurisdictions and regional standard-setters can develop complementary requirements to address their specific policy characteristics.
In view of this, the ISSB must work in close cooperation with relevant jurisdictions, including the EU, when developing the global baseline for reporting requirements to ensure full interoperability. Ultimately, European insurers active in international markets should comply with the ISSB standards by applying European Sustainability Reporting Standards(ESRS) and, therefore, avoid double reporting efforts.
Furthermore, it is important to note that:
-Existing frameworks must form the basis for reporting requirements.
-The IFRS SDS should require the publication of a materiality matrix to make the materiality assessment clear, transparent and available for primary users.
-The ISSB should consider the investors’ information demands in their entirety. This goes beyond the outside-in view, as investors are already interested in many inside-out impacts and are likely to be even more so in the future.
-Restatement of comparative information should be made on a best-effort basis.
-Clarification is needed regarding forward-looking information requirements and time horizons.
-The ISSB’s activity classification should be compatible with the EU classification system.
-Clarity is required on how the value chain is defined for the financial sector and how the concept/requirement should be applied. In Insurance Europe’s view, the value chain for financial institutions should encompass direct upstream and downstream value-chain partners: however, with limited look-through requirements to be supplemented by qualitative sector-specific disclosure requirements.

Insurance Europe Trends(380 articles)

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