The European Insurance and Occupational Pensions Authority (EIOPA) has today said that “it is important to explore prudential treatment of exposures related to assets or activities associated substantially with environmental or social objectives.”
The EU supervisory body made the comments in response to a recent request by the European Commission for it to look into risk profile of assets and activities linked to the bloc’s sustainability goals.
That request was made as part of proposed reforms to the Solvency II directive that governs capital requirements for European insurers, which included a mandate for EIOPA to consider sustainability factors.
This could see insurers receive favourable regulatory conditions for assets that align with the EU’s Net Zero goal, which would be known as a ‘green supporting factor’. RI reported at the time that the proposals also resurrected the idea of a ‘brown penalising factor’, which could see poll…