EIOPA issues its Opinion on EFRAG’s technical advice on the draft revised European Sustainability Reporting Standards

The European Insurance and Occupational Pensions Authority (EIOPA) published today its Opinion on the European Financial Reporting Advisory Group’s technical advice concerning the draft revised European Sustainability Reporting Standards (ESRS), following a request from the European Commission.

EIOPA’s Opinion focuses on the amendments to the existing ESRS included in the technical advice of the European Financial Reporting Advisory Group (EFRAG) that are most likely to have a significant impact on the (re)insurance and occupational pensions sectors, and the supervisory community. 

In this Opinion, EIOPA assesses whether the revised ESRS ensure the availability of key corporate sustainability data to (re)insurance undertakings and occupational pension funds, maintain consistency with other EU legislation - in particular sustainability risk management requirements under Solvency II - and facilitate interoperability with other international standards, including the International Financial Reporting Standards (IFRS).

EIOPA fully supports the simplification efforts in the draft revised ESRS and welcomes the work undertaken by EFRAG to reduce reporting burdens while keeping sustainability reporting meaningful. 

On the proposed improvements, EIOPA recommends introducing a time limit of 3 years on the waiver for data with “undue costs or efforts” for own operations. Current proposals would allow undertakings to potentially forgo the reporting of such data indefinitely if the costs or efforts related to it are deemed “undue”. A reasonable time limit would improve interoperability with IFRS standards and incentivise companies to improve reporting, develop data collection in a cost-efficient way and ensure that key data is made available to enable sound risk assessments by (re)insurance undertakings and pension funds.

In addition, to further reduce reporting burdens and strive for consistent disclosures, EIOPA is of the view that (re)insurance undertakings should be allowed to leverage their internal risk management procedures developed for prudential purposes (Solvency II) when preparing the financial materiality assessment.

Go to the Opinion

Notes and background

The European Commission also requested Opinions from the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Central Bank (ECB), as required by the Corporate Sustainability Reporting Directive (CSRD). 

The revised European Sustainability Reporting Standards (ESRS), once adopted by the Commission, will set out what information large companies subject to the CSRD obligations will be required to disclose as of 2028 on the environmental, social and governance risks that their business is exposed to and on how their business impacts people and the environment. The scope of companies required to apply the ESRS has been reduced by the Omnibus I Directive, and is limited to EU undertakings or groups with a net turnover exceeding EUR 450 million, and an average of more than 1,000 employees during the relevant financial year.

Smaller companies will be able to report voluntarily, using a simplified standard that will be proposed by the EU Commission in 2026, based on EFRAG’s proposal for a voluntary standard for SMEs. This standard will be adopted by the European Commission in parallel with the Delegated Act on the revised ESRS.