The European Commission's Omnibus package has set the stage for a fresh dialogue over sustainability reporting. The first in a series of planned legislative bundles, the Omnibus aims to consolidate and simplify existing regulations across sustainability.
For insurers, the stakes are high. Many have already poured resources into complying with the Corporate Sustainability Reporting Directive (CSRD) and other sustainability frameworks. Industry groups, including Insurance Europe, are pushing for targeted reforms that streamline disclosure requirements, without undermining sustainability objectives. Key demands include pausing sector-specific reporting standards, extending transitional reliefs and introducing a materiality filter for the EU taxonomy regulation.
Yet, the political backdrop is fraught. Parliament factions remain divided over how far these changes should go, with the Commission's president balancing political pressure.
At the same time, campaigners warned that simplification could weaken insurers' role in the green transition. Groups like Finance Watch and WWF argue that insurers should face certain supervisory obligations, including higher capital requirements for fossil fuel investments, as proposed by Eiopa. However, this topic was not included in the Commission's work plan.
Lindsay Keenan of Insure Our Future has argued that stronger intervention is needed to prevent "responsible insurers" from being undercut by competitors who continue to back fossil fuel projects.
Meanwhile, the European Insurance and Occupational Pensions Authority's (Eiopa) latest risk dashboard underscores growing concerns over ESG risks. The outlook for the next 12 months is pointing to an increase in ESG risks as growing scepticism and evolving dynamics in environmental agreements could undermine long-term sustainability goals, the authority said.
Across the Atlantic, US insurers are navigating an entirely different regulatory landscape, where ESG policies face growing resistance with Donald Trump back in the White House.
Attendees at a Crowe sustainability forum last month noted the challenges of balancing EU and UK reporting standards with increasing hostility toward ESG in the US. While some speculate that Trump's return could ease bureaucratic obstacles to green investment, others fear his administration's fossil fuel-friendly stance could derail climate finance progress.
Hannover Re CEO Jean-Jacques Henchoz, for example, has suggested disappointment with the apparent pro-fossil fuel stance of US President Donald Trump. He said international collaboration is needed for climate risk mitigation.
Scientific data supports Henchoz's concerns. A World Weather Attribution study found that climate change increased the likelihood of the Los Angeles wildfires by 35%. At the same time, Gallagher Re reported that global insured natural catastrophe losses hit $154bn in 2024—a staggering 27% above the 10-year average.
The Institute and Faculty of Actuaries (IFoA) also warned that current climate risk frameworks may be underestimating the full scope of economic and societal risks, potentially leading policymakers to miscalculate future threats.
Nonetheless, efforts to improve transparency and standardisation in sustainability reporting continue. The Partnership for Carbon Accounting Financials (PCAF) is refining its carbon accounting methodology for treaty reinsurance and project insurance, with the aim of enhancing clarity on emissions impact.
Also, in InsuranceERM's latest webinar, industry leaders discussed the latest developments and best practice in climate modelling and stress testing.
