The principles set out in EIOPA’s draft Opinion aim to pave the way for a more effective and harmonized supervision of sustainability claims across Europe and thereby limit the risk of greenwashing in the insurance and occupational pensions sectors.
EIOPA’s draft Opinion sets out four key principles:
- Principle 1: Sustainability claims made by a provider should be accurate, precise, and consistent with the provider’s overall profile and business model, or the profile of its product(s).
- Principle 2: Sustainability claims should be kept up to date, and any changes should be disclosed in a timely manner and with a clear rationale.
- Principle 3: Sustainability claims should be substantiated with clear reasoning and facts.
- Principle 4: Sustainability claims and their substantiation should be accessible by the targeted stakeholders.
Each principle is accompanied by examples of good and bad practice. The deadline to respond to the consultation is 12 March 2024.
This consultation is a significant development in the approach to regulatory oversight of sustainability claims and greenwashing risks in the insurance and pensions sector. Hogan Lovells previously reported on the UK FCA’s approach to ESG, which amongst other things, addresses greenwashing.
The FCA’s proposed anti-greenwashing rule aims to ensure that claims on sustainability are clear, fair and not misleading. The FCA’s consultation on its anti-greenwashing guidance, published on 28 November 2023, has an upcoming deadline for responses of 26 January 2024. The proposed anti-greenwashing rule is slated to come into force on 31 May 2024.
With ESG remaining a key issue for the insurance sector going into 2024, these developments demonstrate the ongoing importance for the insurance sector of robust oversight around sustainability claims and greenwashing risks.