Regulate the market for ESG ratings
Insurers' need for ESG ratings and data has grown significantly in recent years. They also play an important role, particularly due to the increasing sustainability-related orientation of many undertakings.
ESG ratings play an important role in the evaluation of investments in renewable energy.
The existing market structures in the area of ESG ratings are considered problematic in part by the insurance industry. In particular, the low degree of standardisation and transparency, data availability and the low comparability of ratings are seen as critical. In order to address the existing challenges, GDV advocates regulatory measures, but these should be integrated into corresponding global initiatives.
Little need for improvement regarding ESG factors in credit ratings
We consider the inclusion of sustainability factors in credit ratings to be fundamentally warranted. At most, an additional measure could be further detailing of the ESMA guidelines on the disclosure of ESG factors in credit ratings published in April 2020. In this context, it is important that the requirements are proportionate to the disclosure requirements for other relevant factors and that any measures do not diminish the informative value of ratings with regard to default probabilities.