The Association is referring in particular to the goals of reducing the CO2 footprint in order to combat further global warming. "Insurers, from their role as risk bearers, are the first to notice the consequences of a changing climate that causes more and larger claims and thus suffering and uncertainty," Weurding emphasises. "Contributing to a cleaner economy is not possible without some form of sustainability reporting because you have to be able to see whether you are making sufficient progress."
Simplify
Many of the proposals in the Omnibus are in line with the earlier call by the Association and Insurance Europe about the need to drastically simplify rules. "The sum and impact of Brussels regulations is gradually having a suffocating effect on the financial sector. It is high time that this is addressed." At the same time, Weurding still misses important aspects in the proposal, such as proposals on how the Commission intends to address the overlapping requirements within the CSRD and Solvency II regulations?" That is why the Association and Insurance Europe will continue to work in the coming period to actually convert the Commission's improvement plans into concrete reductions in the administrative burden for insurers.
What will change?
The first Omnibus package contains amendments from the Commission within the Corporate Sustainability Due Diligence Directive (CSDDD), Corporate Sustainability Reporting Directive (CSRD) and the EU Taxonomy.
CSRD (Corporate Sustainability Reporting Directive)
- Scope adjustment: The threshold for the number of employees will rise from 250 to 1,000 employees. Companies must also meet at least one of the following financial criteria: a balance sheet total > €25 million or a turnover > €50 million. In addition, companies from "phase 2" and "phase 3" will be given an additional two-year extension to introduce the legislation.
- Abolition of sector-specific standards: The Commission wants to remove the power to set sector-specific standards.
- Significantly reduce the number of data points: The Commission will revise the European Sustainability Reporting Standards (ESRS) to significantly reduce the number of data points required in order to improve consistency with other legislation.
CSDDD (Corporate Sustainability Due Diligence Directive)
- Postponement of implementation: The deadline for transposing the CSDDD into national law will be postponed by 1 year to 26 July 2027. The first phase of application of the sustainability duty of care for the largest companies will be postponed until 26 July 2028.
- Removal of financial services from the Directive: The obligation to include financial services in the scope of the CSDDD is removed.
- Delete provisions on civil liability at EU level.
- Maintain mandatory transition plans and simplify them by better aligning them with the CSRD.
EU Taxonomy
- Optional reporting for smaller businesses: EU taxonomy reporting will be optional for companies with fewer than 1000 employees and a turnover below 450 million euros.
The Commission's proposal will now be submitted to the Member States and the European Parliament. Both may propose changes to the proposal.
The Dutch Association of Insurers recently indicated in a position paper, in response to the proposed Omnibus package, that insurers, like other industries, have seen the regulatory burden increase considerably due to various European sustainable laws and regulations. However, when tackling the regulatory burden, the Commission should not lose sight of the level of ambition and the achievability of previously set climate targets.