Sustainable finance

Sustainability issues pose risks and opportunities to the insurance and pension sectors

Climate change, environmental and social risks can have an important impact on human, social and economic life. If not managed properly, they can pose material risks to the assets and liabilities of insurers and pension providers.

At the same time, the insurance and pensions sector can play an important role in the mitigation and adaptation to climate change or sustainability risks, through their investments, products and services. Given their role as society’s risk managers and important long-term investors, insurers and pension funds have a unique opportunity and responsibility to address sustainability-related challenges and facilitate the transition to a more sustainable and resilient economy.

What are EIOPA’s main areas of activity?

Through its work on sustainable finance, EIOPA aims to ensure that (re)insurers and occupational pension funds integrate sustainability risks in their risk management to protect consumers and secure financial stability. In doing so, EIOPA aims to ensure that insurers and pension funds can continue to offer relevant and affordable risk management solutions against natural catastrophes or old age poverty.

EIOPA’s activities on sustainable finance reflect the need for global action to enable decisive progress on the transition to a more sustainable economy. Sustainable finance is a strategic priority area in EIOPA’s work programme 2022-2024, and the Commission’s Strategy for financing the transition to a sustainable economy encapsulates work by EIOPA in delivering on the Green Deal.

In line with EIOPA’s founding regulation and sectoral regulation on insurance and occupation pensions,  EIOPA’s 7 key areas of activity on sustainable finance for 2022-2024 are the following:

  1. Integrate ESG risks in the prudential framework of insurers and pension funds
  2. Consolidate the macro/microprudential risk assessment of ESG risks
  3. Promote sustainability disclosures and a sustainable conduct of business framework
  4. Support supervision of ESG risks and supervisory convergence in the EU
  5. Address protection gaps
  6. Promote the use of open source modelling and data in relation to climate change risks
  7. Contribute to international convergence for the assessment and management of sustainability risks

Download the sustainable finance activities 2022-2024

Tackling greenwashing

The increase in consumers’ demand for investments with sustainability-related features was followed by an increase in offerings with sustainability-related features, giving rise to the risk of greenwashing. EIOPA, in its 2021 Consumer Trends Report, had already warned about a possible increase of greenwashing related risks, and highlighted the need to monitor and mitigate it.

EIOPA as well as the other European Supervisory Authorities (ESAs) have received a request for input from the European Commission on greenwashing risks in relation to sustainability claims and the supervision of sustainable finance policies. The request addresses three main areas: understanding and better monitoring greenwashing and related financial risks; taking stock of the implementation and supervision of sustainable finance policies aimed at preventing/addressing greenwashing; and assessing the supervisory and enforcement response. 

How to stay informed about our work?

EIOPA organizes regular Roundtables on Sustainable Finance to discuss past and upcoming work and the vital role that insurance and pensions play in strengthening society’s resilience to sustainability risks.

Our roundtables gather participants from Stakeholder Groups, the European Commission, representatives of the insurance and pensions, asset management and rating industries, and representatives of consumers associations and civil society.

Roundtables are public events and registrations are open to everyone.

Check  the events calendar 

Cooperation on sustainable finance

Climate change does not stop at borders. As a member of the Network for Greening the Financial System (NGFS), the Sustainable Insurance Forum (SIF) and the International Association of Insurance Supervisors (IAIS), EIOPA cooperates with European and international supervisory and standard-setting bodies to establish convergent supervisory practices for  sustainability risks in the financial services sector.

EIOPA’s deliverables on sustainable finance

Find out more about our work in this area. Here below search for news, reports, consultations, as well as speeches, interviews and events in the area of sustainable finance.

Sustainability | Disclosure

ESAs propose disclosures for fossil gas and nuclear energy investments

The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) have today delivered to the European Commission (EC) their Final Report with draft Regulatory Technical Standards (RTS) regarding the disclosure of financial products’ exposure to investments in fossil gas and nuclear energy...
Sustainability | Disclosure

ESAs propose disclosures for fossil gas and nuclear energy investments

The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) have today delivered to the European Commission (EC) their Final Report with draft Regulatory Technical Standards (RTS) regarding the disclosure of financial products’ exposure to investments in fossil gas and nuclear energy...
Sustainability | Disclosure

ESAs Final Report on disclosures for fossil gas and nuclear energy investments under SFDR

The European Supervisory Authorities (ESAs) have developed through the Joint Committee (JC) draft Regulatory Technical Standards (RTS) with regard to the content and presentation of information to be provided in pre-contractual documents, on websites, and in periodic reports about the exposure of...
Sustainability | Disclosure

ESAs Final Report on disclosures for fossil gas and nuclear energy investments under SFDR

The European Supervisory Authorities (ESAs) have developed through the Joint Committee (JC) draft Regulatory Technical Standards (RTS) with regard to the content and presentation of information to be provided in pre-contractual documents, on websites, and in periodic reports about the exposure of...
Sustainability

Sustainable Finance Conference

Our society is increasingly vulnerable to losses and damage from climate change. Innovation and cooperation are needed to adapt to highly disruptive systemic events, such as pandemics or large cyber-attacks. The insurance and pensions sectors are called on to foster resilience by managing risk not...
Sustainability

NGFS European Plenary Outreach Speech

Good evening and thank you very much for inviting me as keynote speaker to this NGFS European Plenary Outreach. In my remarks today, I would like to concentrate on the insurance sector and its role in addressing climate-related risks. I will briefly discuss climate-related risks (in particular...
Risk assessment

ESAs warn of rising risks amid a deteriorating economic outlook

The three European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) issued today their Autumn 2022 joint risk report. The report highlights that the deteriorating economic outlook, high inflation and rising energy prices have increased vulnerabilities across the financial sectors. The ESAs...
Risk assessment

Joint Committee Report on risks and vulnerabilities in the EU financial system - Autumn 2022

The three European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) issued today their Autumn 2022 joint risk report. The report highlights that the deteriorating economic outlook, high inflation and rising energy prices have increased vulnerabilities across the financial sectors. The ESAs...
Sustainability

Fine-tuning needed to ensure investors contribute to the European Green Deal

There is no question that urgent action is required to address climate change and that environmental protection should be integrated into economic growth strategies. In the financial sector, insurance and pension funds have the longest investment time horizons and hence the greatest stake in...
Sustainability

Addressing the protection gap: challenges and opportunities for (re)insurers

The new EU strategy on adaptation to climate change highlights the fact that affordability and insurability of natural catastrophes insurance coverage is likely to become an increasing concern. Research shows that in the past only a quarter of the total losses caused by extreme weather and climate-...
ORSA | Sustainability

Application guidance on climate change materiality assessments and climate change scenarios in ORSA

This application guidance is a follow-up from EIOPA’s Opinion on the supervision of the use of climate change risk scenarios in ORSA (“Opinion”) published in April 2021 (EIOPA-BoS-21-127 - EIOPA, 2021a). The Opinion was addressed to the national competent authorities on the basis of Article 29(1)(a...
ORSA | Sustainability

Application guidance on climate change materiality assessments and climate change scenarios in ORSA

This application guidance is a follow-up from EIOPA’s Opinion on the supervision of the use of climate change risk scenarios in ORSA (“Opinion”) published in April 2021 (EIOPA-BoS-21-127 - EIOPA, 2021a). The Opinion was addressed to the national competent authorities on the basis of Article 29(1)(a...
ORSA | Sustainability

EIOPA publishes application guidance on how to reflect climate change in ORSA

The European Insurance and Occupational Pension Authority (EIOPA) published today the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA). The publication follows a public consultation on the...
ORSA | Sustainability

EIOPA publishes application guidance on how to reflect climate change in ORSA

The European Insurance and Occupational Pension Authority (EIOPA) published today the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA). The publication follows a public consultation on the...
Sustainability

ESAs issue report on the extent of voluntary disclosure of principal adverse impact under the Sustainable Finance Disclosure Regulation

The Joint Committee of the three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) published the first annual report on the extent of voluntary disclosure of principal adverse impact under the Sustainable Finance Disclosure Regulation (SFDR) – Article 18 of Regulation (EU) 2019/2088...
Sustainability

Joint ESAs’ Report on the extent of voluntary disclosure of principal adverse impact under the SFDR

Report to the Commission under Article 18 of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector.
Sustainability

Principal adverse impact and product templates for the Sustainable Finance Disclosure Regulation

Following the publication in the EU Official Journal of Regulation of Commission Delegated Regulation (EU) 2022/1288 supplementing the Sustainable Finance Disclosure Regulation (SFDR - Regulation (EU) 2019/2088), the European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) are making available...
Sustainability | IDD

Guidance on the integration of the customer's sustainability preferences in the suitability assessment under IDD

This Guidance is a follow-up to a public consultation which EIOPA ran on draft Guidelines on integrating the customer’s sustainability preferences in the suitability assessment under the Insurance Distribution Directive (IDD). During the public consultation, a number of respondents stressed the...
Sustainability | IDD

EIOPA publishes guidance on integrating the customer’s sustainability preferences in the suitability assessment under the IDD

The European Insurance and Occupational Pensions Authority (EIOPA) published today its guidance on integrating the customer’s sustainability preferences in the suitability assessment under the Insurance Distribution Directive (IDD). The Guidance is based on Commission Delegated Regulation (EU) 2021...
Sustainability

Clarifications on the ESAs’ draft RTS under SFDR

Sustainability

ESAs provide clarifications on key areas of the RTS under SFDR

The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) today published a statement providing clarifications on the draft regulatory technical standards (RTS) issued under the Sustainable Finance Disclosure Regulation (SFDR), which include the financial product disclosures under the...
Sustainability

EIOPA assesses European insurers’ exposure to physical climate change risks

The report presents the first results based on a large data collection exercise from the industry. It focuses on property, content and business interruption insurance against windstorm, wildfire, river flood and coastal flood risks. These risks have been identified as the most relevant and...
Sustainability

Discussion paper on physical climate change risks

Building on its ambitious agenda for sustainable finance, and in particular on the sensitivity analysis of asset-side transition risks published in 2020, EIOPA launched a follow-up exercise on physical risks in the second half of 2021. This discussion paper presents the first results of this...
Regulation | Sustainability

Consultation on sustainability disclosures for Simple, Transparent and Standardised securitisations

The European Supervisory Authorities (EBA, EIOPA and ESMA) published a Consultation Paper seeking input on draft Regulatory Technical Standards (RTS) on the content, methodologies and presentation of information in respect of the sustainability indicators for Simple, Transparent and Standardised (...
Regulation | Sustainability

ESAs consult on sustainability disclosures for Simple, Transparent and Standardised securitisations

Today the European Supervisory Authorities (EBA, EIOPA and ESMA) published a Consultation Paper seeking input on draft Regulatory Technical Standards (RTS) on the content, methodologies and presentation of information in respect of the sustainability indicators for Simple, Transparent and...
Risk assessment

ESAs see recovery stalling amid existing and new risks

The three European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) issued today their first joint risk assessment report for 2022. The report highlights the increasing vulnerabilities across the financial sector as well as the rise of environmental and cyber risks. Russia’s invasion of Ukraine...
Risk assessment

Joint Committee Report on risks and vulnerabilities in the EU financial system - Spring 2022

The report highlights the increasing vulnerabilities across the financial sector as well as the rise of environmental and cyber risks. It also includes a preliminary assessment of the consequences of Russia's invasion of Ukraine.