The European Insurance and Occupational Pensions Authority (EIOPA), the European Union’s insurance and pension-focused financial regulator, announced the release of Sustainable Finance Activities 2022-2024, its 3-year plan aimed at ensuring the integration of sustainability risks into the risk management practices of insurers, re-insurers and occupational pension funds.

Unveiled at EIOPA’s sustainable finance roundtable event this week, the plan outlines the regulator’s priority focus areas, including identifying and addressing protection gaps, integrating sustainability across prudential insurance and pension frameworks and increasing reporting requirements on sustainability risks. While the activities outlined in the report primarily emphasize climate-related initiatives, the regulator said that other environmental, social and governance risks deserve enhanced attention, and the plan indicates that increased consideration will be given to social aspects.

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According to EIOPA, the plan’s activities reflect the need for global action in order to enable the transition to a more sustainable economy.

Speaking at the roundtable event, Petra Hielkema, Chair of EIOPA, said:

“These days there are very few of us who have not been touched by the effects of climate change in the recent past – and unfortunately, some more severely than others.  We see at close hand the impact that climate change has on human, social and economic life.

“And I think all of us at today’s roundtable recognise the importance that the insurance and pensions sectors can play in strengthening our response as a society and fostering resilience.”

Some of the key planned activities outlined in the report include promoting sustainability disclosures and a sustainable conduct of business framework following guidance under SFDR and EU Taxonomy regulations, providing guidance on the supervision of ESG conduct risks such as including greenwashing, and promoting open source modelling and data in relation to climate change risks such as the modelling for natural catastrophes.

Hielkema said:

“When we talk about ESG – which we do a lot – there are three words: Environmental, social and governance. It’s time to give attention to the S in ESG. We need to give more consideration to the social aspects of sustainable finance.

“Of course there is much less available data for the social side than environmental, but that does not mean it is less relevant. Because eventually, social issues will become prudential issues.”

Click here to access EIOPA’s Sustainable Finance Activities 2022-2024.