Insurance Europe: EC corporate governance proposals must account for existing EU sustainability rules
10 February 2021
Insurance Europe has today published its response to a consultation by the European Commission on sustainable corporate governance, including matters regarding social and human rights, climate change and the environment.
The sector is supportive of the EU’s sustainability objectives and
already makes a significant contribution towards the transition to
sustainability. However, should the Commission decide to establish an
EU-level legal framework for sustainable corporate governance, it must
strike the right balance between the benefit of greater transparency and
the burden it would impose on companies.
Such a framework should focus on sectors that are lagging behind in
the transition to sustainability and thoroughly consider existing
sectorial sustainability rules. For example, insurers are already
subject to several requirements to integrate considerations about
adverse impacts on human rights and environmental issues into their
corporate governance frameworks.
Therefore, before proposing new legislative requirements on sustainable corporate governance, the Commission should:
- Carefully assess the impact of measures that already cover the
integration of sustainability into corporate governance frameworks for
the financial sector: eg the Sustainable Finance Disclosure Regulation
and proposals to amend the Solvency II framework. This sectoral
legislation is currently ignored in the Commission’s studies in this
area, which risks creating inconsistency and overlaps, especially with
initiatives related to the 2018 Action Plan on Sustainable Finance.
- Recognise there is no "one size fits all" solution: eg in terms of
stakeholder engagement and remuneration. The proposed approach to due
diligence should be principles-based and risk-based, as well as
proportionate and context-specific.
- Work to address sustainability through a global approach and international coordination.
Full response
Insurance Europe
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