Insurance Europe recommended that, since sustainability has different meanings to investors in different markets, reaching a shared understanding of sustainability must be the key priority for the Commission.
Insurance Europe also welcomes the fact that the proposed classification system provides a foundation to harmonise standards and labelling schemes for green financial products, enhancing comparability and transparency at a national and EU level.
Moreover, it supports the fact that the taxonomy considers the degree of sustainability at the level of economic activities, and includes all economic sectors in its scope. This will allow various sustainable investment strategies and instruments to be included.
The taxonomy should look at sustainability in a holistic sense and include all environmental, social and governance (ESG) factors that contribute to sustainable investments, to recognise the implicit connection between these components.
The taxonomy should be prioritised over other elements in the Commission’s Action Plan and its timeline should be accelerated so that it includes all ESG components.
Insurers have the potential to redirect capital flows to greener activities, but their ability to invest more in sustainable projects faces several constraints, including the limited supply of sustainable investment assets and the barriers to long-term investments that currently exist in the Solvency II regime that governs insurers.
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