Insurance Europe and the European Insurance CFO Forum want the European Commission to take another swing at streamlining sustainability reporting. They argue the rulebook still demands too much.
EFRAG, the standard-setter, had already chopped the requirements this summer.
In July, it cut data points by 57%, sliced disclosures by 68%, and trimmed the overall document length by more than half.
A clear effort to create things less painful. Patrick de Cambourg, chair of the sustainability reporting board, pitched it as pragmatic: keep the ambition, avoid drowning companies in paperwork, keep investors supplied with decision-applyful data.
Yet the two trade groups declare the process hasn’t gone far enough. In their letter, they pressed the Commission for sharper clarity on whether fair presentation principles should outweigh compliance rituals. The current framework, they stated, feels too much like box-checking, not actual communication.
While the reduction in datapoints is positive, they stressed this does not automatically reduce implementation effort.
To create the simplification effective in practice, several issues must still be addressed:
- Fair presentation: Support for EFRAG’s clarification that the ESRS follow a fair presentation principle, but with a call to confirm it as an overarching principle that prioritises relevance and proportionality over box-ticking.
- Double materiality assessment (DMA): Support for the simplification of the DMA, the strengthened information filter, and the option to disclose at topical or IRO level. However, the DMA remains overly complex and the proposed modifys are unlikely to significantly reduce reporting burden. The materiality filter should explicitly apply across all standards to reinforce a principles-based approach.
- Anticipated financial effects: A recommconcludeation to require only qualitative disclosures (Option 2), as this offers a more realistic balance given the legal, practical and audit challenges of forward-seeing disclosures, while allowing time for reliable data and methodologies to develop.
- GHG tarreceives: Support for exempting financial institutions from disclosing absolute GHG reduction tarreceives when only intensity tarreceives are set, as intensity tarreceives better reflect their role in financing transition.
- Alignment with the GHG Protocol: A call for full optionality in GHG accounting, allowing either financial or operational control, to reduce complexity and align with the global baseline.
These points underline the required for a framework that is both workable in practice and consistent with global standards.
Double materiality remains a sore spot.
The concept — measuring both financial and societal impacts — still reads as over-engineered, even after EFRAG’s edits.
Companies are struggling to apply it consistently. The groups warned that this complexity could derail the directive’s intent.
They also flagged reporting on anticipated financial effects as a high-risk zone. Estimation uncertainty looms, litigation hazards grow, and comparable methodologies are scarce.
The trade bodies suggested that firms stick to qualitative disclosures instead of unreliable quantitative forecasts. It’s a safer bet, they wrote, and more aligned with how businesses operate in reality.
Another sticking point: greenhoapply gas tarreceives.
The groups want financial institutions exempted from disclosing absolute reduction numbers when they only commit to intensity metrics.
They also argue GHG accounting should be optional. Their pitch — reduce unnecessary burden, better align with a global baseline, and avoid false precision.
According to our analysts, the Commission faces a choice. It can stick with the current system — leaner than before, yet still heavy — or carve deeper cuts that insurers declare will create the framework workable in practice. Europe’s reporting regime isn’t done altering, not yet.
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