Insurance Europe has responded to a consultation by the European Commission on a draft proposal by its Platform on Sustainable Finance for an extended taxonomy to support economic transition.
The
EU taxonomy has a key role to play in promoting transition finance and Europe’s
insurers welcome the EC’s efforts to improve clarity in financial markets
regarding different levels of environmental performance.
While
insurers are generally supportive of extension proposals in the future, further
work is required to ensure that those extensions are efficient for investors
and achieve consistency with other ongoing work related to sustainable finance.
With
respect to the no significant impact (NSI) taxonomy, it is important that the
taxonomy framework recognises intermediate performance levels of economic
activities in the future, while avoiding further administrative burdens and
layers of complexity for investors. While not the main priority, defining such
intermediate performance can help better recognise transition efforts of all sectors
and encourage activities to move towards substantial contributions. This is key
for developing consistent transition plans and tools to reach the environmental
performance envisaged under the European Green Deal.
With
respect to the significantly harmful (SH) taxonomy, the industry recognises
that the SH taxonomy could be useful. However, the focus must be on finalising
the current green taxonomy and on supporting transition activities that can improve
companies’ sustainability performance beyond significant harm. Equally
important, the introduction of an SH taxonomy beyond the do no significant harm
(DNSH) category should rely on information about the implementation of the
current framework, which is currently not available, and accompanied by a realistic
impact assessment that duly considers the actual progress in implementing the
Taxonomy Regulation.
Overall,
insurers support a positive approach towards the green transformation. Pressure
on financial institutions is not the means to achieve this outcome since this
would be both inefficient and ineffective. SH activities should instead be
directly addressed by introducing specific regulations regarding these
activities. Similarly, investors’ risk management and allocation decisions
should remain risk-based and not be distorted via any artificial factors or
political objectives.
response
Insurance Europe
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