SFDR Reform: EU aims to make sustainability information from insurers easier to understand
The European Commission has published a draft proposal to revise the Sustainable Finance Disclosure Regulation (SFDR). The goal is to significantly simplify sustainability information for financial investment products, such as unit-linked life insurance, and to make it more meaningful for policyholders.
“Today, these disclosures often run to 20 or 30 pages,” says Jörg Asmussen, CEO of GDV. “In the future, all relevant information will be provided clearly and understandably on no more than two pages. That is a major improvement for customers.”
More clarity and usefulness for policyholders
The planned reform will reduce the previously extensive and sometimes difficult-to-understand sustainability information to what truly matters, presented in a clear and well-structured way. This will allow policyholders to see at a glance whether a product contributes to environmental or social objectives.
Sustainable efforts by the industry become more visible
Additionally, all providers of financial products will be allowed in the future to report investments that contribute to the transition toward a sustainable economy. Under the current SFDR rules, this is not permitted. “With the inclusion of ESG strategies and sustainable processes, products will be able to account for investments that may not yet meet all sustainability criteria but already support the transition,” says Asmussen. “This is a realistic and forward-looking approach that better reflects the industry’s sustainable commitment.”
Insurers welcome the reform approach
Insurers strongly support this reform. Comprehensible information is essential for sustainable insurance products to reach the broader market. “Those looking for sustainable options should be able to identify easily which products offer real sustainable value. The EU is creating the foundation for greater transparency and better comparability for customers,” Asmussen says.
Sustainable Finance Disclosure Regulation
The Sustainable Finance Disclosure Regulation (SFDR) is a key element of the EU’s sustainable finance strategy. It has applied since 2021 and aims to increase transparency about sustainability aspects in the financial sector.
The Commission’s reform proposal will now be discussed in the European Parliament and the Council of the EU. Adoption of the revised SFDR is expected in 2026. Whether insurers can implement the proposed simplifications in practice will also depend on the design of the technical regulatory standards that follow.
