Insurers Call for Greater Access to Sustainable Investments

The organisation which represents Europe’s insurance associations has called for greater access to sustainable investment options as it responded to the European Commission’s consultation on its sustainable finance strategy.

Insurance Europe has issued its response which calls for an increase in the supply of long-term sustainable assets to meet the needs of institutional investors, such as insurers, and their growing willingness to invest sustainably.

However, it added the demand for such assets is not matched by their availability, therefore public policies are needed to increase the supply of long-term sustainable assets. In this respect, carbon pricing can be an appropriate tool to reduce carbon emissions and make green projects more financeable compared to other ones.

Insurance Europe also called for sustainability to be brought into the mainstream in an affordable, simple and streamlined way, while finding the right balance in performing ESG analysis and identifying adverse impacts at reasonable costs.

In its submission it said this requires:

  • Affordable centralised access to reliable, comparable and standardised digital ESG data
  • Balanced disclosures for customers and other users of ESG information. Consumers should be able to rely on simple labels and information without technical details.

The industry also called for ESG factors to be fully integrated into global, diversified portfolios, while accounting for sustainability risks.

These include, filling the training gap among finance professionals and governance bodies, shared frameworks and assessment tools across financial actors coupled with enhanced sustainability and financial literacy.

The organisation said: “The insurance industry supports the ambitious objectives of the European Green Deal to make the EU economy sustainable, and the aim of achieving net-zero greenhouse gas emissions by 2050.

“Europe’s insurers remain as committed as ever to supporting the transition to a more sustainable society and to tackling climate change. The insurance industry can play a key role in the transition to sustainability through providing both insurance coverage and investment in sustainable assets. However, insurers are only one component in a wider effort to make the economy sustainable. And they can only play their part in the transition to a sustainable economy provided that other companies and governments are willing to fulfil their own roles by financing sustainable projects and issuing green bonds which meet EU sustainability standards.”