© Adam Sébire / Climate Visuals
Up to 85% of Europe’s insurers could be excluded from the corporate sustainability reporting directive (CSRD) due to the EU’s sustainable omnibus proposal, according to a report commissioned by nonprofit ShareAction.
This would reduce transparency, data availability and accountability, and could make the EU more vulnerable to climate change shocks, the report found.
The risk could even be higher, as insurers in the scope of the EU taxonomy could be limited to the largest companies that are subject to the corporate sustainability due diligence directive (CSDDD). Changes to the CSRD and the CSDDD, as well as the EU taxonomy, are being debated in Brussels.
“If the current proposals go ahead, a vast majority of insurers – some of whom manage billions in assets – could be exempted from sustainability reporting obligations overnight. That would leave investors, supervisors, and citizens in the dark about how insurers are managing their sustainability-related financial risks, while adding further instability to the financial system,” said Marika Carlucci, EU senior policy officer at ShareAction.
The report found that under the current proposed threshold of 1,000 employees, 51% of insurance firms would be exempt, which would increase to 67% if recent suggestions from the European parliament to increase the turnover threshold to €450mn go through.
Other potential changes, such as a 5,000-employee threshold which has been touted by the French finance minister, would exclude as many as 82% of insurance companies, with the percentage rising to 85% if turnover thresholds are also raised.
The report notes that the omnibus changes could cause future revisions to the sustainable finance disclosures regulation and Solvency II, with the insurance industry already advocating for the removal of mandatory sustainability risk plans.
“Weakening the CSRD now risks making financial markets less transparent, less stable and less prepared for the challenges ahead. This is even more striking for insurers – the ones managing the risks of climate change and footing the bill for the extreme events it fuels. EU policymakers must reconsider these proposals before they undo years of progress,” Carlucci said.
What EIOPA thinks of the EU’s proposed omnibus
The European Insurance and Occupational Pensions Authority (EIOPA), which oversees insurers, has welcomed the simplification process, especially if it means a more streamlined approach and cohesive framework across the EU. But it cautioned against adding more gaps or inconsistencies.
“Efforts to simplify regulation must, in our view, strike the right balance, ensuring that streamlining leads to a stronger, more cohesive framework, rather than introducing new gaps, inconsistencies or unintended burdens elsewhere,” said chair Petra Hielkema.
In a note published in April, EIOPA noted that the EU needs to enhance the competitiveness of the single market which includes simplifying regulations, but that any simplification process should be done in a holistic way. It should not mean regulatory burdens are shifted to a national level or moved onto supervisors, it added.
The insurance regulator noted it would still strive to make sure reinsurers and occupational pension funds have access to reliable and consistent sustainable data.
“Especially in the context of mounting climate risks, such sustainability data are important reference points that allow for a sound management of sustainability-related risks and the provision of reliable information to consumers,” EIOPA said.
EIOPA has asked that a regulatory technical standard (RTS) of insurers’ sustainability risk disclosures be delayed, as the uncertainty of the proposals makes it harder for them to do their job, Hielkema said at a conference in March.
“In light of these omnibus package proposals … I believe the timeline for finalising the RTS should be extended until there is stability on the scope and extent of the revised CSRD/ESRS requirements. This would ensure our approach remains aligned with the broader simplification efforts,” Hielkkema said.
Vincent Vandeloise, senior researcher at Finance Watch, said it was unusual for technical standards to be delayed but the omnibus process of reviewing legislation before it has been implemented is unheard of.
“The omnibus directive is unprecedented. It’s an extremely, extremely unusual process. Normally, omnibus directives have happened with rules that were many years old… This omnibus directive is addressing [rules] before they’ve been implemented, so that’s already exceptional.”
The insurance industry has spoken out against sustainable reporting requirements, arguing that they already report risks and have even asked the regulatory review to be removed.
“Deleting it now really doesn’t seem to make a lot of sense. The RTS would bring more efficient regulation. This is also the stated aim of the omnibus directive – more efficient regulation, simpler regulation, which has introduced uncertainty over the transition plans and the CSRD,” Vandeloise said.
Listen to the Sustainability Omnibus Podcast, a limited series exploring the complex nuances of the EU simplification agenda on sustainability reporting.
This page was last updated May 19, 2025
Written by
Moriah Costa is the Editor-in-Chief of Green Central Banking and has over a decade of experience writing about banking and finance. She is an award-winning American journalist based in Paris and has written for major international publications, including Reuters, The Guardian, and S&P Global. Having grown up in water-stressed Arizona, she has always had a strong interest in bringing awareness to climate and environmental issues.
