EIOPA consults on greenwashing limitation guidance

EIOPA has published a consultation on its draft Opinion on sustainability claims and greenwashing. The aim of the Opinion is to achieve more effective and enhanced supervision of sustainability claims across Europe and thereby limit the risk of greenwashing in the insurance and occupational pensions sectors.

The draft Opinion sets out four principles that should be observed when providers make sustainability claims:

  • Principle 1: Sustainability claims made by a provider should be accurate, precise and consistent with the provider’s overall profile and business model
  • Principle 2: Sustainability claims should be kept up to date, and any changes should be disclosed in a timely manner and with a clear rationale
  • Principle 3: Sustainability claims should be substantiated with clear reasoning and facts
  • Principle 4: Sustainability claims and their substantiation should be accessible by the targeted stakeholders.

Some examples of good practice given for principles 1 and 2 include, as part of a pension scheme, a pension provider offering a climate change mitigation focused investment option or an insurance provider systematically conducting scheduled reviews of external data to ensure that the investment options continue to align with the specified sustainability objectives of the target market. An example of bad practice includes the SFDR disclosure of a unit-linked product making only generic reference to indicators to evaluate the environmental and social characteristics and good governance principles of the investee companies without actually disclosing them.

The deadline for commenting is 12 March 2024.

Vida Fatemi