1. General Comments
The Association of German Public Insurers welcomes the initiative of the European Commission to strengthen sustainability reporting. As Germany’s second-largest primary insurance provider with a strong regional presence, the group is strongly committed to the goals of a more sustainable economy.
The public insurers are signatories of the Principles for Responsible Investment (PRI) and take environmental, social and governance principles into account in their investment decisions. In this light, the public insurers strongly support improved sustainability data. The Sustainable Finance Disclosure Regulation (SFDR) requires insurers to report an extensive set of sustainability data of their investments. The Taxonomy Regulation, particularly Art. 8, calls for the disclosure of additional sustainability indicators. The public insurers expect the Corporate Sustainability Reporting Directive in combination with the European Single Access Point https://www.voev.de/european-single-access-point to ensure that all these are available, ready to use and free of charge in a public database.
To improve the European Sustainability Reporting Standards (ESRS), the Association of Public Insurers makes proposals in two areas: firstly, alignment with the SFDR, and secondly, scope 3 emissions reporting.
Alignment with the SFDR
The current draft provides for a materiality assessment for data points that are mandatory for adverse sustainability impact (PAI) reporting under the SFDR. PAI data points that are deemed immaterial by investee companies should be able to be reported as "qualified 0". This would allow the data of investees to be easily collected and consolidated. The responsibility for reporting a "qualifying 0" would be borne by the investee company. The SFDR-PAI data points should also be reported in a separate table.
2. Specific comments on Annex I
Reporting on scope 3 emissions
The draft states that financial institutions "shall consider" the so-called PCAF (Partnership for Carbon Accounting Financial) standard when reporting scope 3 emissions. According to previous statements by EFRAG and the EU Commission, the wording "shall consider" should not create an obligation. In order to create legal certainty, a corresponding clarification should be anchored in the ESRS, e.g. through the wording "may consider".
German Public Insurers encourage the European Commission to pursue this ambitious project. It will be instrumental in aligning the different regulatory components of Sustainable Finance. The public insurers are looking forward to continuing the exchange on Sustainable Finance.