Insurance Europe and PensionsEurope have jointly expressed their support for the European Commission’s proposed ESG (environmental, social, and governance) Rating Regulation while calling for further enhancements to ensure transparency, comparability, and integrity within the ESG landscape.
The associations welcome the regulation’s potential to improve the transparency of ESG ratings, enhance the independence of rating providers, and reduce conflicts of interest.
However, they emphasise the need for broader coverage, urging the inclusion of ESG data products within the scope of the regulation.
The joint statement underscores the critical role of consistent and robust ESG data in fulfilling sustainable finance obligations.
The absence of a comprehensive public database poses challenges for the insurance and investment industries. The associations call on co-legislators to address this gap by extending the regulation to cover ESG data products, thereby ensuring the integrity of the ESG landscape.
Highlighting the urgency of addressing the existing data gap, the statement acknowledges positive steps taken with regulations such as the Corporate Sustainability Reporting Directive (CSRD) and the European Single Access Point (ESAP) but emphasises the gradual nature of their implementation.
The associations stress the need for an immediate solution to support the financial green transition, as the reliance on purchased ESG data services continues.
The statement cites the European Securities and Markets Authority’s (ESMA) progress report on greenwashing, emphasising the high risk to investor protection posed by the lack of clearly outlined data limitations and disclaimers in underlying methodologies.
The associations argue that covering ESG data within the ESG Rating Regulation is consistent with recommendations from the International Organisation of Securities Commissions (IOSCO) and ESMA, aligning with the draft regulation’s reference to the IOSCO definition for ESG ratings.
