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.

Risk assessment | Gabriel Bernardino

Risk Management – A supervisor’s approach

Presentation by Gabriel Bernardino, Chairman of EIOPA, at SUERF Annual Lecture in Helsinki.
Consumer protection | Risk assessment

Joint draft ITS on the allocation of credit assessments of ECAIs to an objective scale of credit quality steps

Risk assessment | Solvency II

Proposal for guidelines on own risk and solvency assessment

Risk assessment | Solvency II

Draft advice to the EC on equivalence assessment of the Swiss supervisory system

Risk assessment | Solvency II

Call for advice on the review of Directive 2003/41/EC: Second consultation

Risk assessment | Solvency II

Draft advice to the EC on equivalence assessment of the Bermudian supervisory system

Risk assessment | Solvency II

Draft advice to the EC on equivalence assessment of the Japanese supervisory system

Regulation | Risk assessment

Addendum Joint draft ITS on the mapping of ECAIs’ credit assessments

Solvency II | Sustainability

Technical Advice on the integration of sustainability risks and factors under Solvency II and IDD

EIOPA welcomes comments on its draft technical advice regarding possible amendments to the delegated acts under Solvency II and IDD concerning the integration of sustainability risks and factors. Comments are most helpful if they: respond to the question stated, where applicable; contain a clear...
Consumer protection | Financial stability | Risk assessment

Joint CP related to the draft ITS on risk-mitigation techniques for OTC-derivatives

Consumer protection | IDD | Risk assessment | Solvency II

Second set of advice to the EC on specific items in the Solvency II delegated regulation

EIOPA welcomes comments on the second set of advice to the European Commission on specific items in the Solvency II Delegated Regulation. Comments are most helpful if they: respond to the question stated, where applicable; contain a clear rationale; and describe any alternatives EIOPA should...
Regulation | Risk assessment

Joint draft ITS on the mapping of ECAIs' credit assessments

Consumer protection | Risk assessment | Solvency II

Review of specific items in the Solvency II delegated regulation

EIOPA welcomes comments on the review of specific items in the Solvency II Delegated Regulation. Comments are most helpful if they: respond to the question stated, where applicable; contain a clear rationale; and describe any alternatives EIOPA should consider.
Regulation | Risk assessment | Solvency II

Proposal for guidelines on the system of governance

Consumer protection | Risk assessment | Solvency II

Technical advice on the identification and calibration of other infrastructure investment risk categories

Risk assessment | Solvency II

Proposal for guidelines on submission of information to NCA

Consumer protection | Financial stability | Risk assessment | Solvency II

Automation in financial advice

Consumer protection | Risk assessment | Solvency II

Proposal for guidelines on pre-application for internal models

Consumer protection | Financial stability | Risk assessment

Joint Consultation on anti-money laundering and countering the financing of terrorism

Risk assessment | Solvency II

Guidelines on preparing for Solvency II

Consumer protection | Financial stability | Risk assessment

Joint guidelines of acquisitions and increases of qualifying holdings in the financial sector

Risk assessment | Solvency II

Standard formula design and calibration for certain long-term investments

Consumer protection | PRIIPs | Risk assessment

Risk, performance scenarios and cost disclosures in KIDs for PRIIPs

Consumer protection | Regulation | Risk assessment | Solvency II

Joint draft RTS on the uniform conditions of application of the calculation methods

Consumer protection | Regulation | Risk assessment | Solvency II

Call for Advice from the EC on the identification and calibration of infrastructure investment risk categories

Consumer protection | Risk assessment

Joint draft RTS on risk mitigation techniques for OTC derivatives not cleared by a CCP

Consumer protection | Financial stability | Risk assessment

Joint draft RTS on risk-mitigation techniques for OTC-derivative contracts not cleared by a CCP

Financial stability | Risk assessment | Solvency II

Draft proposal on the add-on quantitative financial stability reporting templates