Insurance Europe and CFO Forum want greater ESRS simplification

Written by Adam Cadle

03/10/2025

Insurance Europe and the European Insurance CFO Forum have welcomed the simplification achieved so far on the revised Exposure Drafts of the European Sustainability Reporting Standards (ESRS) but warned that the standards remain too complex and burdensome.

Responding to the European Financial Reporting Advisory Group’s (EFRAG) consultation, while the industry bodies said the reduction in datapoints is positive, they stressed this does not automatically reduce implementation effort.

They argued that several issues must still be addressed. Concerning fair presentation, they declared their support for EFRAG’s clarification that the ESRS follows a fair presentation principle, but with a call to confirm it as an overarching principle that prioritises relevance and proportionality over box-ticking.

Secondly, they declared their support for the simplification of the double materiality assessment (DMA), the strengthened information filter, and the option to disclose at topical or IRO level. However, it said the DMA remains overly complex and the proposed changes are unlikely to significantly reduce reporting burden. The materiality filter should explicitly apply across all standards to reinforce a principles-based approach.

Thirdly, the industry bodies have given a recommendation to require only qualitative disclosures (Option 2), as this offers a more realistic balance given the legal, practical and audit challenges of forward-looking disclosures, while allowing time for reliable data and methodologies to develop.

There has also been support issued for exempting financial institutions from disclosing absolute GHG reduction targets, when only intensity targets are set, as intensity targets better reflect their role in financing transition.

Related Articles