EIOPA underlines support for insurers to tackle climate change

Written by Michael Griffiths

18/11/2022

EIOPA has underlined its commitment to supporting the insurance and pensions sectors in tackling climate change as the the 2022 United Nations Climate Change Conference (COP27) draws to a close.

The organisation stated that sustainability has “long been a pillar” of its work, with the overall objective to strengthen the sustainability of the insurance and pensions sectors.

Over the past year, EIOPA has provided guidance on the own risk and solvency assessment (ORSA), so that insurers adopt a “forward-looking” approach to the management of sustainability risk. It said it is also providing guidance on the application of the Sustainable Finance Disclosures Regulation. This year, its stress test will assess the resilience of Europe’s occupational pensions sector against a climate change scenario.

EIOPA is also making step-by-step progress in its work on assessing the extent to which a dedicated prudential treatment of environmental or social objectives under Solvency II might be warranted, and expect to launch a consultation before the end of this year.

In the area of protection gaps, EIOPA also confirmed it is to publish in December the first European-wide dashboard on the natural catastrophe insurance protection gap, in line with its commitment made in the confines of COP26 in Glasgow. 

As part of its contribution to this year’s conference, EIOPA has participated in European Union side events highlighting its supervisory initiatives in the area of climate risk and treatment of green investments, as well as the role of insurance and adaptation, focusing on the role of insurers as risk managers and investors.

“Climate change is an enormous global challenge and meeting the challenge requires a joint effort by many parties,” EIOPA stated. “The insurance and occupational pensions sectors play a vital role addressing climate-related challenges, as both risk managers for society and major long-term investors.

“EIOPA therefore values its consultative dialogue with the insurance and pensions sectors as part of its work to support both sectors in their efforts to mitigate and adapt to climate change and other sustainability risks.”

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