Advice to the European
Commission on greenwashingrisks and the supervision ofsustainable finance policies
FINAL REPORTEIOPA-BoS-24-159
04 June 2024

ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Report

CONTENTS
Executive Summary and proposals

4

1.

6

Introduction and background
1.1.

3.

Process6

1.1.2.

EIOPA’s interpretation of the EC’s request for input

6

1.1.3.

Scope covered by EIOPA

7
7
8

2.1.

Sustainability claims

8

2.2.

ESAs common understanding of greenwashing

9

Supervising sustainability claims in the insurance and pensions lifecycles
Common approach to supervise sustainability claims

99

3.1.1.

Rationale of the Opinion on sustainability claims and greenwashing9

3.1.2.

Summary of the content of the Opinion

10

3.2.

5.

Background

Understanding sustainability claims and greenwashing

3.1.

4.

6

1.1.1.

1.2.
2.

MandateSustainability claims in the insurance and pension lifecycles

11

3.2.1.

Entity-level

12

3.2.1.1.

Sustainability claims in the business model

12

3.2.1.2.

Sustainability claims in the entity management13

3.2.2.

Product level15

3.2.2.1.

Sustainability claims in the product manufacturing and scheme design stage

15

3.2.2.2.

Sustainability claims in the delivery stage

15

3.2.2.3.

Sustainability claims in the product/scheme management stage

17

Risks and impacts from greenwashing

18

4.1.

Green exposure in the insurance and pension sectors

18

4.2.

Impact of greenwashing

19

Supervisory activities carried out in relation to greenwashing
5.1.

Survey to undertakings on sustainability

20
20

5.1.1.

Implementation of SFDR requirements

21

5.1.1.1.

Entity-level SFDR disclosures

21

5.1.1.2.

Entity-level investment information beyond SFDR

23

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5.1.1.3.

Product-level SFDR disclosures

23

5.1.2.

Implementation of IDD sustainability requirements

26

5.1.2.1.

POG sustainability-related requirements

26

5.1.2.2.

IDD suitability assessment sustainability-related requirements

30

5.1.3.

Non-life insurance products with sustainability features

31

5.2.
6.

SFDR Pre-contractual disclosure analysis

Supervisory experiences
6.1.

NCAs’ supervisory activities around greenwashing

Supervisory tools to tackle greenwashing

7.

37
37
39

6.2.

Occurences of potential greenwashing

39

6.3.

Supervisory capacities, challenges and powers

40

6.3.1.

Supervisory capacities

40

6.3.2.

Supervisory challenges

41

6.3.3.

Supervisory mandates and powers

42

Possible Improvements to the regulatory framework
7.1.

8.

32

Non-life insurance products with sustainability features43
43

7.1.1.

Clarifying what are non-life products with sustainability features44

7.1.1.1.

Potential sustainability features of non-life products

44

7.1.1.2.

Potential product-level disclosure

46

7.1.1.3.

Other considerations

47

7.1.2.
features

Pros and cons of the implementation of a potential approach for non-life products with sustainability
48

7.2.

Insurance Distribution Directive (IDD)

48

7.3.

Sustainable Finance Disclosure Regulation (SFDR)

49

7.4.

IORP II Directive

49

Annex

51

8.1.

Acronyms and abbreviations

51

8.2.

Stakeholder interaction

52

8.3.

ESAs understanding of greenwashing

52

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Report

EXECUTIVE SUMMARY AND PROPOSALSIn May 2022, the European Commission (EC) asked EIOPA to provide advice on greenwashing risks
and the supervision of sustainable finance policies. This Final Report serves as EIOPA’s final input tothe EC’s Call for Advice (CfA) on Greenwashing and complements EIOPA’s Progress Report on
greenwashing published in June 20231.
‘Sustainability claims’ made by insurance and pension providers should be accurate,
substantiated, accessible and up to date. Relying on the ESAs’ understanding of ‘greenwashing’ and
EIOPA’s understanding of ‘sustainability claims’, EIOPA sets out a common approach to supervise
sustainability claims and greenwashing in the insurance and pensions sectors. This common
approach composed of four principles follows a public consultation that ended in March 20242.
EIOPA applied this approach to a set of examples of sound and misleading sustainability claims
across the stages of the insurance and pension lifecycles.
While providers reported generally complying with sustainability-related requirements, EIOPA
sees room for improvement. To assess the status of implementation of the current sustainabilityrelated requirements, EIOPA coordinated a survey to undertakings on sustainability. 16 National
Competent Authorities (NCAs) participated in this exercise which covered 99 insurance and pension
providers. In relation to SFDR, EIOPA sees room for improvement particularly regarding Article 10
SFDR requirements (i.e., product-level website disclosures). Despite POG being a well-establishedconcept in the insurance regulatory landscape, the integration of sustainability-related objectives in
the POG process is not adequate, especially for non-life products. In relation to the integration ofsustainability preferences in the suitability assessment under the Insurance Distribution Directive(IDD), assessments undertaken by Insurance Based Investment Products (IBIP) distributors appears
at times to be insufficiently granular and precise.
The understanding of what is a non-life product with sustainability features varies acrossundertakings. Based on the survey to undertakings, EIOPA finds that 16 out of 46 manufacturers of
non-life products classified – with internal classification processes – some of their non-life insurance
products as having sustainability features or as being “green”. A lack of standards in relation to nonlife products with sustainability features can lead to a higher risk of greenwashing.
While there are data gaps, EIOPA finds that consumers’ investments in IBIPs are significantly
exposed to investments that have some sustainability features. By matching Solvency II data tocollective investment undertaking (CIU) data related to SFDR, EIOPA found that 51.6% of consumers’
1 EIOPA's Progress Report on Greenwashing - Advice to the European Commission - European Union - Link
2 Consultation on the Opinion on sustainability claims and greenwashing in the insurance and pensions sectors - Link

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investments in IBIPs disclosed under Article 8 of the SFDR (€771 bn), while 2.6% disclosed under
Article 9 of the SFDR (€38 bn).
EIOPA noticed an increase in supervisory attention around sustainability-related requirements
and greenwashing between 2023 and 2024. In the 2024 survey, more NCAs reported occurrencesof greenwashing or potential greenwashing (from 8 to 11 NCAs). NCAs also reported more
supervisory activities around greenwashing (from 15 to 21 NCAs), more resources dedicated togreenwashing supervision (from 22 FTEs to 30 FTEs), as well as more internal supervisory tools
developed around greenwashing. However, several challenges in the supervision of greenwashingremain, notably: resource constraints, a lack of sustainability-related data, the complexity of theregulatory framework and a lack of common approach to supervise greenwashing.
To address existing challenges and combat greenwashing, EIOPA lays out a set of key proposals
aimed at enhancing the supervision of greenwashing and at improving the sustainable financeregulatory framework. These key proposals are included throughout the report and are listed
below.










Proposal 1 – Using the ESAs common understanding of greenwashing as a reference point
Proposal 2 – Building a common EU supervisory approach in relation to sustainability claims andgreenwashing
Proposal 3 – Tackling greenwashing through enhanced supervision and targeted supervisory
activities
Proposal 4 – Preventing greenwashing
Proposal 5 – Enhancing supervisory resources and expertise to tackle greenwashing
Proposal 6 – Closing the gap related to non-life insurance products with sustainability features
Proposal 7 – Consumer-centric sustainability preferences
Proposal 8 – A sustainability-related investment framework that works for insurance andpension consumers and providers
Proposal 9 – Enhancing sustainable finance and mitigating greenwashing in the occupational
pensions sector

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1. INTRODUCTION AND BACKGROUND
1.1. MANDATE
1.1.1. Process
The request for input3 sent by the European Commission on 23 May 2022 requests EIOPA’s advice
on the areas of greenwashing and its supervision, by way of a progress report to be delivered by theend of May 2023 and a final report to be delivered by the end of May 2024. The progress report
was delivered to the Commission on 31 May 20234. With this report, EIOPA is fulfilling its mandate
to deliver a final report.
While the request for input asks for separate progress and final reports from each of the ESAs
individually, and that each of the ESAs accurately presents the specificities of the sectors in theirremit, the request for input encourages a high level of coordination across the ESAs deliveries.

1.1.2. EIOPA’s interpretation of the EC’s request for input
EIOPA has interpreted the request for input sent by the EC as covering three main parts. The firstpart was covered by the progress report, while the second and third parts are covered by this final
report.
(i) The first part asks the ESAs to provide input on occurrences, cases and complaints relating togreenwashing, and asks the ESAs to assess the scale and frequency of greenwashing. The ESAs
are also asked to assess risks and potential impacts stemming from the occurrence ofgreenwashing. Based on the occurrences, risks, impacts and complaints studied, the ESAs are
asked to provide a common high-level understanding of greenwashing across the sectors, and,
where relevant, a definition of greenwashing at sectoral level.
(ii) The second part relates to the supervision of greenwashing by NCAs. The ESAs are asked togather supervisory experience in dealing with greenwashing and to identify supervisory
practices (techniques, tools, measures taken, data requirements) which are effective at
identifying, monitoring and mitigating potential greenwashing risks and potential
gaps/challenges, including an assessment of whether the current and forthcoming supervisory
mandates, powers, obligations and toolkits are fit to adequately tackle greenwashing and its
risks. Input is also sought in relation to the resources dedicated to sustainability-related
3 Request for input to the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) andthe European Securities and Markets Authority (ESMA) related to greenwashing risks and supervision of sustainable finance policies link
4 EIOPA’s Progress report on Greenwashing - Link

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Reportsupervisory tasks. Further, the ESAs are requested to assess the current state of implementationof relevant EU sustainability-related requirements and assess how NCAs intend to/are already
implementing their supervisory obligations, including enforcement.
(iii) The third part invites the ESAs to propose improvements to the current regulatory framework,
based on observed shortcomings such as inconsistencies, contradictory concepts or definitions
and gaps – including in Level 1 legislation.

1.1.3. Scope covered by EIOPA
In its advice, EIOPA covers several relevant market segments under its remit and areas around which
potential greenwashing can emerge.
The market segments covered in EIOPA’s work are:

In the area of retail investments: Insurance-based investment products (IBIPs); Occupational
pension schemes; and Pan-European personal pension products5.
In the area of non-life insurance: Non-life insurance products marketed as having sustainability
features and corporate commitments related to underwriting practices.

1.2. BACKGROUND
European insurance consumers and pensions savers are increasingly interested in allocating theirmoney in a sustainable manner. According to EIOPA’s 2023 Eurobarometer survey, 32% of EU
consumers6 have heard about sustainable insurance or pension products, 13% have already boughtsuch products and 13% would consider buying them. Another 27% of EU consumers, while nothaving heard about sustainable insurance or pension products, would be interested in knowing
more about them.
Insurance and pension providers7, hereinafter ‘providers’, are increasing their sustainable offerings– both investment and non-life insurance products – and are adapting their business models to be
more sustainable. While this can contribute toward the transition to a more sustainable economy,challenges emerge when providers misleadingly portray themselves and their products/schemes assustainable by making misleading sustainability claims – i.e., greenwashing.
In its 2022 Consumer Trends Report8, EIOPA emphasized the importance of substantiating
sustainability claims made by providers. Additionally, some NCAs have reported instances ofpotential greenwashing in their markets.
5 While the current supply of PEPP is limited, EIOPA covered PEPP in its advice.
6 ‘Consumers’ is understood as a term that can englobe consumers, savers, pension scheme members and beneficiaries. This term istherefore used to refer broadly to people using or benefitting from pensions and insurance services.
7 ‘Insurance and pension providers’ captures insurance undertakings, PEPP providers, insurance distributors, and IORPs.
8 EIOPA’s 2022 Consumer Trends Report.

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EIOPA further explored greenwashing in its progress report9 which served as interim deliverable to
the European Commission’s Call for Advice on greenwashing. The progress report provides acommon understanding, shared by the three European Supervisory Authorities (ESAs) on whatgreenwashing is. EIOPA’s progress report also shows how greenwashing can manifest at all stages of
the insurance and pensions lifecycles10. Moreover, it highlights that greenwashing has a substantial
impact on insurance consumers, pension savers and providers. It also provides some initialconsiderations on the supervision of greenwashing, and early challenges faced by supervisors.
Finally, it lists issues identified in the regulatory framework.
Relying on the input provided in the progress report, this final report focuses on two aspects: i) the
supervision of greenwashing and ii) potential improvements to the regulatory framework aroundgreenwashing.

2. UNDERSTANDING SUSTAINABILITY CLAIMS AND
GREENWASHING
2.1. SUSTAINABILITY CLAIMSIn EIOPA’s progress report, EIOPA outlined that for greenwashing to occur, there should be a‘sustainability claim’ that is misleading.
EIOPA understands a ‘sustainability claim’ to be any claim related to the sustainability profile of anentity or a product. Such claims state or imply that an entity or product benefits the environment
or people11, but can also include claims misrepresenting sustainability risk to portray a moreenvironmentally or socially responsible profile.
‘Sustainability claims’ can be made by providers across all stages of the insurance and pensions
lifecycles.
‘Sustainability claims’ encompass a broad range of statements, declarations, actions, orcommunications related to sustainability, including any regulatory disclosures (e.g., SFDR, Taxonomy
Regulation) and sustainability requirements (e.g., considering sustainability-related objectives of
the target market in the manufacturing of an insurance-based investment product (IBIP)). In
addition, they include other forms of disclosures such as marketing information, website texts,
9 Progress Report on Greenwashing.
10 The insurance and pensions lifecycles encompass all the product-level and entity-level stages relevant to insurance and pensions

processes. More is available on greenwashing in EIOPA’s progress report on greenwashing (link).
11 This encompasses ‘environmental claims‘, as defined in Directive (EU) 2024/825 of the European Parliament and of the Council of 28
February 2024 amending Directives 2005/29/EC and 2011/83/EU as regards empowering consumers for the green transition throughbetter protection against unfair practices and through better information (OJ L, 2024/825, 6.3.2024).

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Reportadvertising brochures, social media posts, policies, images, strategies, labels, certificates, ratings,
targets, non-regulatory labels, and product names.
There are several ways in which a ‘sustainability claim’ can be misleading and, thus, conducive togreenwashing. Therefore, the term ‘misleading’ is understood as an umbrella term that covers thefollowing non-exhaustive list of issues: selective disclosure, empty claims, omission or lack ofdisclosure, vagueness or lack of clarity, inconsistency, lack of meaningful comparisons or thresholds,
unsubstantiated, misleading imagery or sounds, irrelevance, outdated information, misleading
sustainability-related terminology, falsehoods.
EIOPA’s understanding of ‘sustainability claims’ is in line with the ESAs understanding ofgreenwashing, which is presented below.

2.2. ESAS COMMON UNDERSTANDING OF GREENWASHING
Summary statement12: The ESAs understand greenwashing as a practice whereby sustainabilityrelated statements, declarations, actions, or communications do not clearly and fairly reflect theunderlying sustainability profile of an entity, a financial product, or financial services. This practice
may be misleading to consumers, investors, or other market participants.
Proposal 1 – Using the ESAs common understanding of greenwashing as a reference pointNCAs are encouraged to adopt the ESAs understanding of greenwashing as a common reference
point for supervisory activity on sustainability and greenwashing.
Insurance and pension providers are encouraged to adopt the ESAs understanding ofgreenwashing as a common reference point for internal monitoring and tackling ofgreenwashing (e.g., as part of their policies and procedures).

3. SUPERVISING SUSTAINABILITY CLAIMS IN THE
INSURANCE AND PENSIONS LIFECYCLES
3.1. COMMON APPROACH TO SUPERVISE SUSTAINABILITY CLAIMS
3.1.1. Rationale of the Opinion on sustainability claims and greenwashing

12 More information is available in the Annex.

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NCAs have started to integrate the monitoring of sustainability claims and the risk ofgreenwashing in their supervisory activities. EIOPA noticed an increasing number of NCAs
reporting potential cases of greenwashing.
The number of potential greenwashing cases, and the impact of greenwashing on consumers’ trustin the insurance and pension sectors, necessitates an effective and consistent supervision ofproviders’ sustainability claims in order to tackle greenwashing. However, NCAs have reported somechallenges in their supervision of greenwashing (see section 6.3.2). First, the regulatory framework
is complex, and NCAs are currently in the process of developing the required expertise to assess
compliance with its requirements. Second, there is no common approach at EU level to assesssustainability claims and greenwashing in the insurance and pensions sectors. Thirdly, legal
requirements addressing greenwashing are often high-level, therefore more supervisory guidance
to ensure convergence is needed. A survey to NCAs carried out by EIOPA in January 2023 confirmed
these challenges, as 15 NCAs responded that they were waiting for further guidance on the
supervision of greenwashing from EIOPA.
In this respect, it is important to develop a common approach to supervise sustainability claims
and greenwashing in the insurance and pensions sector to ensure consistent outcomes across the
EU. To this end, EIOPA published a draft Opinion on sustainability claims and greenwashing for public
consultation in December 202313. This draft Opinion sets out a framework designed to assist NCAsin their monitoring of insurance and pension providers and that providers adhere to common
principles when making sustainability claims about themselves or their products or schemes.
Following the end of the public consultation in March 2024, EIOPA reviewed the draft Opinion, andis issuing with this Final Report, the Opinion on sustainability claims and greenwashing.

3.1.2. Summary of the content of the Opinion
The Opinion on sustainability claims and greenwashing applies to all product and entities under
EIOPA’s remit. Based on EIOPA’s Progress Report and Final Report on greenwashing, the Opinion
explains what sustainability claims are and outlines the ways in which they can be misleading andthus lead to greenwashing.
The Opinion sets out four principles for sustainability claims, which are derived from the legal
obligations to provide fair, clear and not misleading information laid down in Article 17 (2) of IDD,
Article 6 of the PRIIPs regulation and similarly in Articles 36 and 41 of the IORP II Directive. These 4
principles are as follows:

Principle 1: Sustainability claims made by a provider should be accurate, precise, and should
fairly represent the provider’s profile, and/or the profile of its product(s).

13 Consultation on the Opinion on sustainability claims and greenwashing in the insurance and pensions sectors - Link

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final ReportPrinciple 2: Sustainability claims should be substantiated with clear reasoning, facts andprocesses.
Principle 3: Sustainability claims and their substantiation should be accessible by the targetedstakeholders.
Principle 4: Sustainability claims should be kept up to date, and any material change should be
disclosed in a timely manner and with a clear rationale.

These 4 principles are further explained in the Opinion on sustainability claims, where EIOPA
outlines supervisory expectations throughout the insurance and pensions lifecycles.

3.2. SUSTAINABILITY CLAIMS IN THE INSURANCE AND PENSION
LIFECYCLESEIOPA lists below examples of sustainability claims for the various stages of the insurance andpension lifecycles14. These examples stem from the different data collection exercises that EIOPA
carried out (e.g., reporting by NCAs, ESAs Joint CfE, survey to undertakings). To provide a concrete
dimension to the Opinion on sustainability claims, claims are highlighted as being either sound or
misleading, with regard to the 4 principles set out in the Opinion and in line with legal provisions
cited in the section above (i.e., Article 17(2) of IDD, Article 6 of PRIIPs, and Articles 36 and 41 of the
IORP II Directive).
Figure 1 – Likelihood of greenwashing in the different stages of the insurance and pensions
lifecycles as rated by respondents of the ESAs Joint Call for Evidence (CfE)**

Source: ESAs Joint CfE, 2023

14 Please refer to pages 17 to 33 of EIOPA’s progress report for more details on each lifecycle stage.

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3.2.1. Entity-level
3.2.1.1. Sustainability claims in the business model
Insurance and pension providers, as major institutional investors, develop investment strategies
detailing their goals, ambitions, and methods for achieving them. This includes promoting thesustainability of their investments through channels like annual and climate reports, press releases,
advertisements, and social media. Insurance and pension providers (particularly IORP Boards)
seeking to embed sustainability in their investments usually rely on third parties (e.g., asset
managers), who are tasked with designing and implementing strategies that align with theirsustainability goals. Through their investments, insurance and pension providers influence theactivities of their investee companies, with some claiming to steer these companies towards
environmentally or socially beneficial practices.
Given insurance undertakings’ role as risk-managers, they are increasingly highlighting thesustainability credentials of their underwriting activities, e.g., not providing coverage for polluting
activities like coal mining or fracking. Furthermore, both insurance and pension providers aremaking long-term commitments to transition their investment activities (and underwriting activities
for insurance providers) towards Net Zero.
Examples of misleading sustainability claims15a) An IORP publicly declares that it intends to incorporate sustainability considerations in its newinvestment strategy. The IORP board outsources the design of this strategy to an external party,
which says that it has an extensive track-record in the design of investment strategies withsustainability considerations. However, the external party exaggerated its sustainability
expertise, and therefore does not manage to integrate sustainability considerations to the level
expected by the IORP Board. This claim is not accurate (principle 1) due to the external
provider’s misrepresentation of its sustainability expertise. Moreover, the IORP board did not
notice the inadequate integration of sustainability considerations ultimately leading the IORP
scheme to invest with a lower sustainability ambition.
b) An insurance provider claims on its website "a vast choice of responsible and sustainable
investment opportunities" and "the possibility to direct your investments towards the real
economy and sustainable initiatives". It does not provide details about such sustainabilityrelated investment options on its website. These claims are not accurate (principle 1), as theprovider makes vague and overly positive claims. Moreover, these claims are unsubstantiated(principle 2) as the provider did not provide information on its range of products with

15 The explanations of why a claim is misleading are for illustrative purposes. They should not be understood as representing EIOPA’s

supervisory assessments.

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Reportsustainability attributes on its website, nor explain how consumer investments would aid
sustainability efforts.
c) An insurance provider presents its entity-level SFDR information (e.g., Article 3, 4, 5 disclosures)on its website in a manner that is not accessible for consumers and the general public. The SFDRrelated content requires navigating through a disproportionate number of webpages. This claim
is not accessible (principle 3) and is not compliant with Article 2 of the SFDR DR.
d) An insurance provider highlights on its website homepage its strong credentials in making
investments in companies with low GHG emissions. This does not reflect that most of its
investments are in companies with high GHG emissions, which are disclosed in other reports,
whose access requires navigating through a disproportionate number of webpages. This claim
is not accurate (principle 1) and not accessible (principle 3) as it highlights positive impacts
while disclosing more material negative impacts in a less accessible manner. This can therefore
mislead consumers when assessing the sustainability profile of the insurer.
Examples of sound sustainability claimse) An insurance provider discloses on its website that it joined an alliance committed to achieving
Net Zero emissions by 2050 in its underwriting portfolio. Upon joining, the insurance provider
transparently outlined its long-term sustainability goals and established a roadmap with
science-based intermediate targets. Internally, this provider puts in place rigorous monitoringmechanisms to track progress. To ensure external accountability, this provider frequently
publishes progress reports detailing achievements toward these intermediate goals andaccurately communicates material changes to its approach and strategy. The provider also
actively collaborates with alliance members to share best practices and to stay updated onsustainability trends.
f) An insurance provider claims to promote sustainability and, on its website, provides informationon the sustainability objectives it pursues in a clear and layered manner. This allows consumers
to access the information without being overwhelmed. In providing this information it includes
links to reports and/or to a data repository where consumers or any other interested
stakeholders can easily check how this provider is progressing towards its sustainability
objectives.

3.2.1.2. Sustainability claims in the entity management
Sustainability aspects are increasingly becoming relevant in providers’ ways of operating.
Providers are highlighting the sustainability credentials of their Board, senior management, andemployees. Remuneration policies for senior managers and staff are increasingly tied tosustainability goals, and sustainability considerations are becoming integral to firm-level culture.
Many insurance and pension providers are also establishing sustainable finance committees toaddress sustainability across their organizations.

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Regulatory reporting by insurance and pension providers around sustainability aspects has
recently grown under the SFDR and the Taxonomy Regulation, and is due to further grow with the
CSRD. Moreover, when fulfilling these reporting obligations, insurance and pensions providers rely
to some extent on data provided by third parties. Additionally, providers often make use of thirdparty sustainability ratings and/or non-regulatory labels to portray themselves or their products assustainable.
Examples of misleading sustainability claims16g) A provider makes a claim that it materially links the remuneration of its senior management topositive environmental impact in the form of climate targets. These are short-term targets that
only measure financial risks stemming from the climate, i.e., climate risk – and therefore do notmeasure positive impact on the climate. Moreover, the provider does not disclose these targets
publicly. This claim is not accurate (principle 1) because the provider did not set climate targets
in its remuneration policy that are consistent with its claim, and the claim is not accessible(principle 3) given that the targets are not publicly available.
h) An insurance provider does not apply the same level of rigor in its sustainability reporting as it
does in its financial reporting. This leads the insurance provider to make a material
misstatement in the sustainability information it reports. This claim is not accurate (principle 1)due to the sustainability information reported being wrong.
i) An insurance provider claims to be a “sustainability leader” thanks to a rating given by a thirdparty rating provider. It does not explain what the rating measures. In this case, the rating solely
measures the sustainability risk profile of the entity; it does not assess the impact of theprovider’s activities on sustainability factors. This claim is unsubstantiated (principle 3) because
the rating does not explain what it measures which may lead consumers to believe that they
are investing in a provider that is positively impacting the environment or society, whereas thisis not necessarily the case.
Examples of sound sustainability claimsj)

An insurance provider sets out precise sustainability targets and guidelines in its investment
policy. A central sustainable finance committee coordinates and ensures that the targets aremet, and the guidelines are respected across the entity’s investment activities. The provider
also regularly engages with partnering asset managers through ex-ante and periodic
questionnaires. This practice helps prevent non-compliance with the entity’s investment policy,
while improving the chances of early detection and correction of non-compliance.
k) An insurance provider claims that it integrates in its firm-level management strong sustainability
considerations. This company sets out sustainability as one of its strategic priorities for the next

16 The explanations of why a claim is misleading are for illustrative purposes. They should not be understood as representing EIOPA’s

supervisory assessments.

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5 years with a detailed action plan which is published on its website. It also sets up a crosscutting sustainability team with adequate sustainability expertise, which is empowered tochallenge the Board and different business units where appropriate. Moreover, it materially ties
remuneration practices to sustainability targets, and organizes capacity building initiatives suchas workshops for employees on sustainability-related aspects.

3.2.2. Product level
3.2.2.1. Sustainability claims in the product manufacturing and scheme design stage
Providers are integrating sustainability aspects in the life and non-life products they manufacture.
This in line with an increasing consumer interest in products with sustainability features, and withthe relevant specific sustainability-related requirements (i.e., POG DR). This implies theconsideration of sustainability aspects in all steps of product manufacturing, such as product design
and target market analysis. Moreover, manufacturers may use data provided by third parties whenmanufacturing products.
Examples of misleading sustainability claims17
l)

An insurance provider has a Multi-Option Product (MOP) that is named “Climate protection”.
Most of the investment options proposed by the insurance provider’s MOP are not aimed at
protecting the climate. This claim is not substantiated (principle 2) because the sustainabilityrelated name of the MOP is not consistent with its investment options.

Examples of sound sustainability claimsm) As part of a pension scheme, a pension provider offers a climate change mitigation focusedinvestment option. This option only invests in companies with a high share of EU Taxonomyaligned activities that contribute to climate change mitigation.
n) In relation to the investment options of MOPs, an insurance provider systematically conducts
scheduled reviews of external data, sourced from rating agencies and asset managers. This
allows the provider to ensure that the investment options continue to align with the specified
sustainability objectives of the target market, and communicate any material change toconsumers.

3.2.2.2. Sustainability claims in the delivery stage
The delivery of products includes the promotional strategy, as well as the interaction between
customers and providers at the point of sale. Some providers are promoting the sustainability

17 The explanations of why a claim is misleading are for illustrative purposes. They should not be understood as representing EIOPA’s

supervisory assessments.

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Reportprofile of their product by using sustainability-related words in their product name, and in thenames of the investment options offered by these products. To the extent that a lot of advertising
is visual, products are increasingly portrayed with sustainability-themed visual supports (e.g., green
colour, picture of trees) in various marketing channels. Product distributors advise on sustainability
features of products by assessing the suitability of products vis-à-vis consumers’ sustainability
preferences, by explaining to consumers the different sustainability features of such products, andby providing them the relevant disclosure, including sustainability disclosure. Distributor training
courses on sustainable finance requirements are also taking place. In addition, sustainability claims
are made in product-level pre-contractual and website mandatory disclosures focused onsustainability (e.g., SFDR), but also in those not explicitly focused on sustainability (e.g., PRIIPs KID,
PEPP KID, IPID etc…).
Examples of misleading sustainability claims18o) A provider names its insurance product “Sustainable future” however this product discloses a
0% sustainable investments commitment in its pre-contractual disclosure under Article 9 of the
SFDR. This claim is not substantiated (principle 2) because products that disclose under Article
9 should have a sustainable investment objective and only do sustainable investments.
Moreover, the product is using a sustainability-related word in the product name to makeconsumers think the product is more sustainable than it is.
p) When seeking advice for an IBIP, a consumer expresses preference to invest in an IBIP making ahigh share of sustainable investments. The distributor does not consider the consumer’s
preference and recommends an IBIP with a low share of sustainable investments. This claim is
not substantiated (principle 2) and is not compliant with the IDD DR 2021/1257 as the
distributors did not consider the sustainability preferences of the consumer when making its
recommendation.
q) An insurance provider does not provide a clear and direct link to the SFDR disclosure for each
investment option of their MOP. In addition, it presents an investment option, disclosing under
Article 8 of the SFDR, as having the name “sustainable” that neither has any commitment tomake sustainable investments nor taxonomy-aligned investments19. These claims are notsubstantiated (principle 2), not accessible (principle 3) and are not compliant with Article 10of the SFDR and Article 2 of the SFDR DR.
r) The SFDR disclosure of an IBIP makes generic references to indicators evaluating theenvironmental and social characteristics and good governance principles of the investee
companies without disclosing them. This claim is not substantiated (principle 2) because theprovider did not disclose the indicators.

18 The explanations of why a claim is misleading are for illustrative purposes. They should not be understood as representing EIOPA’s

supervisory assessments.
19 More examples are listed in section 0 of this report on the SFDR pre-contractual disclosure analysis.

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Reports) An insurance provider says its IBIP is sustainable because more than 50% of the product’s assets
are invested in companies that "consider" certain ESG aspects in their strategy. The provider
makes no reference to the IBIP’s SFDR disclosure. This claim is not substantiated (principle 2)
and is not accessible (principle 3) as it does not provide the evidence proving that more than
50% of the product’s assets are invested in companies that consider ESG aspectst) A provider makes a social media advertisement with sustainability-related visuals for a life
insurance product, stating that the “product contributes to the protection of the marine
ecosystem”, without additional explanations. This claim is not substantiated (principle 2)
because this provider does not explain how the product contributes to the protection of themarine ecosystem.
Examples of sound sustainability claimsu) An insurance provider offers an IBIP that is named “Paris-aligned investment”. This product aims
to achieve alignment with the Paris agreement goals. This aim is further detailed in the
product’s regulatory (e.g., SFDR disclosure) and non-regulatory disclosures.
v) A pension provider offers a pension product named “Funding the transition and yourretirement”. This scheme has a goal to decrease the GHG emissions that result from theactivities in which the product will invest. Moreover, the product’s SFDR disclosure highlights
how it intends to achieve this goal: i) by investing in assets (e.g., companies, projects, orsovereigns) that are expected to lower the GHG emissions of their activities and by ii) engaging
with investee companies to influence their business decisions to lower GHG emissions.

3.2.2.3. Sustainability claims in the product/scheme management stage
Insurance and pension providers monitor how products are working in practice (in line with POG
requirements for insurers), if there are changes in products’ sustainability features, and if they stillmatch the sustainability preferences of consumers even after the sale. The claims management
process may include sustainability features, as potentially outlined in the product’s marketing
documentation given to consumers in the delivery stage. Additionally, sustainability claims are
made within product-level periodic mandatory disclosure focused on sustainability (e.g., SFDR) but
also in those not explicitly focused on sustainability (e.g., PRIIPs KID, PEPP KID, IPID etc.).
Examples of misleading sustainability claims20w) A provider did not notify consumers who purchased an IBIP with investment options initiallydisclosing under Article 9 of the SFDR, but that after the purchase, disclosed under Article 8 of
the SFDR. This claim is no longer accurate because it was not updated (principle 4), as the

20 The explanations of why a claim is misleading are for illustrative purposes. They should not be understood as representing EIOPA’s

supervisory assessments.

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Reportprovider did not inform consumers that their chosen investment options no longer match theirsustainability preferences, nor did the provider offer remedial options.
x) An insurance provider portrays a non-life insurance product as sustainable in an advertisement
because it says that its claims management process is “very sustainable”, without explaining
what makes this process very sustainable. This claim is not substantiated (principle 2) as it does
not provide information on what makes the claims management process sustainable.
Examples of sound sustainability claimsy) For a motor insurance product, an insurance provider reduces the deductible if consumers
choose to repair their car using recycled parts. The motor insurance marketing material includes
clear information on this repair process, its sustainability benefits, and the amount of thedeductible reduction.
z) An insurance manufacturer sets out thresholds on the minimum proportions of sustainabilityrelated investment options for their MOPs. If the thresholds are breached for a given MOP, themanufacturer stops making sustainability claims about the MOP and adjusts the allocation
within 45 days.

4. RISKS AND IMPACTS FROM GREENWASHING
4.1. GREEN EXPOSURE IN THE INSURANCE AND PENSION SECTORS
To assess the exposure of the insurance and pension sectors to investments that have sustainability
features, EIOPA matched Solvency II data and IORPs data to Morningstar collective investment
undertaking (CIU) data related to SFDR. The results of this matching are presented in Figure 2.
Figure 2 – Matching of Solvency II data and IORPs data to Morningstar SFDR data in %% matching
Total insurers CIU investments

47.8%

Insurers’ CIU investments not held for unit- or index-linked contracts

18.9%

Insurers’ CIU investments held for unit- or index-linked contracts

75.9%

Total IORPs CIU investments

17.9%

Source: Morningstar, ESMA, EIOPA’s SII database (S06.02), EIOPA’s IORP database
Given the low matching of insurers’ CIU investments not held for unit- or index-linked contracts(UL/IL) and of IORPs CIU investments, the below analysis only considers insurers’ CIU investments
held for UL/IL contracts.

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As of Q3 2023, the total amount of CIU investments held for UL/IL contracts was 1,495 bn EUR, ofwhich 1,135 bn EUR was matched (75.9%). These are insurer’s investments that are made as part ofconsumers’ IBIPs, and therefore are a measure of consumers’ exposure to investments withsustainability features.
Figure 3 – Insurers’ investments held for IL/UL contracts at EEA level (data as of 2023-Q3)

Source: Morningstar, ESMA, EIOPA’s SII database (S06.02)
Looking at Figure 3, it appears that most consumers’ investments have some sustainability features(54.2% disclose under Article 8 or 9), with the vast majority disclosing under Article 8 investments(51.6%). These findings reconcile well with ESMA’s findings on the SFDR disclosure of EU funds: 52%
of funds disclosed under Article 8, and 3% of funds disclosed under Article 921. Beyond Article 8 or
9 SFDR disclosure, EIOPA looked at Morningstar Sustainable Investment (SI) flag. EIOPA found that
33% of Article 8 investments had the SI flag, while 98% of Article 9 investments had the SI flag.
While there are data gaps, based on this analysis, EIOPA finds that consumers’ investments in
IBIPs are significantly exposed to investments that have some sustainability features.

4.2. IMPACT OF GREENWASHING(Please refer to the Progress Report pages 13 to 16 for more details on the impact of greenwashing)
Misleading sustainability claims can lead consumers to buy products that are not aligned with
their sustainability preferences. It can also lead them to invest via a pension or insurance provider
that misleadingly portrays itself as an entity with sustainability credentials. In these instances,consumers' investments or premiums are diverted from benefiting the environment or society.
Greenwashing erodes consumers’ trust in providers’ ability to positively impact environmental orsocial factors, as also reported by consumer representatives in their response to the ESAs joint CfE.
21 ESMA’s TRV on trends, risks, and vulnerabilities No.1 2023 – Link

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Similarly, EIOPA’s Eurobarometer survey carried out in July 2023 shows that 51% of EU consumers
do not trust the sustainability claims made by insurance undertakings or distributors.
A provider that makes misleading sustainability claims might suffer significant reputational andfinancial damage if it is involved in greenwashing. Consumers might want to sever ties with theprovider by redeeming their investments, for example, in the case of investments through IBIPs(e.g., surrender), or by changing their non-life insurance provider (e.g., non-renewal). As many
consumers may surrender their products following greenwashing allegations, the concerned
insurance undertaking might not be able to cover all redemptions, for example due to a lack ofliquidity. Existing customers might pursue legal actions against providers to seek damages. Other
stakeholders, such as non-governmental organizations, might also pursue legal action against
providers or engage in public ‘name-and-shame’ techniques. If the provider is publicly traded, its
share value may decrease, potentially affecting its capacity to raise capital.
Where there is non-compliance with sustainability requirements and general consumer protection
rules such as the need for providers to be fair, clear, and not misleading, NCAs will apply increased
supervisory scrutiny. Where appropriate and in line with the relevant legislation, such cases could
result in sanctions or in product intervention measures.
Overstating sustainability efforts – for example in transition plans – may impact the financial
resilience of the insurer. Indeed, misleading sustainability claims may lead to a potential
misjudgement of risk exposures in relation to underwriting and investment activities, resulting inunanticipated losses or reduced returns.

5. SUPERVISORY ACTIVITIES CARRIEDRELATION TO GREENWASHING

OUT

IN

In 2023 and early 2024, EIOPA carried out two supervisory activities related to sustainability aspects,
as well one survey to NCAs on greenwashing. This was done to inform this Final Report, particularly
in evaluating the state of implementation of relevant sustainable finance requirements.

5.1. SURVEY TO UNDERTAKINGS ON SUSTAINABILITY
To assess the status of implementation of the current sustainability-related requirements, EIOPA
coordinated a survey to undertakings on sustainability-related aspects. 16 NCAs participated in thisexercise which covered 99 providers (89 insurance undertakings and 10 IORPs). The survey sought

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to inform various areas such as i) the implementation of SFDR requirements, ii) the implementationof IDD sustainability-related requirements, and iii) non-life insurance products with sustainability
features.
Although the survey encompasses a wide sample, its findings should not be construed as
representative of all EU insurance and pension providers.

5.1.1. Implementation of SFDR requirements
Out of the 99 providers that participated in this data collection, 84 providers were in scope of SFDR
(i.e., IORPs, insurers making an IBIP available). While providers reported generally complying with
SFDR requirements, EIOPA sees room for improvement particularly in relation to Article 10
requirements.

5.1.1.1. Entity-level SFDR disclosures
Providers generally complied with entity-level transparency requirements set out under SFDR andmost of these 84 providers were able to provide website links to their entity level disclosures22. Still,some issues and divergences were noticed, especially in relation to Article 4 SFDR reporting, where
several insurers reported not covering all their investment decisions.


Article 3 of SFDR requires that providers in scope publish on their websites information about
their policies on the integration of sustainability risks in their investment decision-making
process. Out of the 84 providers in scope of SFDR, 80 indicated having this information
published on their website. 4 providers in scope of SFDR indicated not having this information
published on their website.
Article 4 of SFDR requires that providers in scope publish and maintain on their website astatement on due diligence policies on the principal adverse impacts of their investment
decisions on sustainability factors, if they consider these impacts (mandatory consideration if
they have over 500 employees). If they do not consider these impacts, they must provide a clear
reasoning as to why they do not do so.
Out of the 84 providers in scope of SFDR, 68 providers indicated considering these impacts withsome divergences between providers. While many insurers reported that this consideration
covered all their investments, others reported limiting PAI consideration to their generalaccount thereby excluding ‘indirect investments’ or ‘unit-linked investments’ (e.g., externallymanaged funds). This was mostly due to a lack of data (some mentioned fund managers notproviding them with the relevant data) or unclarities stemming from the regulation. However,some of these insurers indicated working on including these investments in the future. Unlike

22 According to Article 15(1) of SFDR, IORPs shall publish and maintain the information referred to in Articles 3 to 7 free of charge throughelectronic means, including on a durable medium or by means of a website, or on paper.

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the others, two insurers consider that externally managed investment options of their MOPs
are subject to consumers’ investment decisions rather than to providers’ investment decision,
therefore they exclude such investments from their PAI consideration. When it comes toproviders lacking data for their PAI consideration, two approaches were reported by providers,some providers estimate/extrapolate missing data while others restrict the scope of their PAI
considerations to the investments for which they have data. Further, a few providers reported
excluding from PAI consideration real estate investments and derivatives. Several providers
expect the quality and availability of data to improve over time, thereby improving their Article
4 reporting.
Out of the 84 providers in scope of SFDR, 16 providers indicated not considering these impacts.
2 out of these 16 providers indicated not doing so because they have less than 500 employees,
and reported publishing the statement requested by Article 4(1)(b) SFDR. Other providers
indicate that they do not consider PAI due the unavailability of data for their MOPs’ investment
options. One undertaking reported that they do not consider PAI via the PAI indicators but via
their own methodology which is done through an exclusion list. 4 providers noted plans to startconsideration of PAI in the near future, as data availability improves.
Article 5 of SFDR requires that providers in scope assess the consistency of their remuneration
policies with the integration of sustainability risks and publish this information on theirwebsites. Out of the 84 providers in scope of SFDR, 80 providers reported doing so, while 4reported not doing so. For those who reported doing so, issues of vagueness were noted,
particularly as some providers failed to clearly explain the link between sustainability risk
management and remuneration.
Article 12 of SFDR requires that providers in scope ensure that any information published inrelation to Article 3 and Article 5 (also in relation to Article 10 but the focus of this section isentity level) is kept up to date. Out of the 84 providers in scope of SFDR, 72 providers reported
setting out a process around the monitoring and review of SFDR information. Several providers
rely on internal committees/boards or business areas (e.g., SUFI department, appointment of a“sustainability manager”) that are dedicated to the coordination and oversight of sustainabilityrelated aspects throughout the entity, and to ensure that SFDR information is up to date. Many
providers reported having auditors or other external consultants review their SFDR disclosures.
ESG data providers are also widely used. In terms of the periodicity of reviews, many providers
reported reviewing their SFDR entity-level disclosure every year in line with reporting deadlines.
Some providers reviewed these disclosures more often, sometimes quarterly or monthly, or onan ad hoc basis (in case of significant changes). In terms of approval, some providers highlighted
that these disclosures are approved by their senior managers (e.g., CEO, Executives) or their
Board. Finally, several providers reported taking steps to ensure that SFDR disclosures be fair,
clear and not misleading, e.g., through the elaboration of internal guidelines for the
preparation, management and review of SFDR-related disclosures.

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5.1.1.2. Entity-level investment information beyond SFDR

47 providers reported including sustainability-related considerations in their shareholder
engagement policies. Most of these providers noted doing so through collaborative approacheswith investee companies, for instance engaging in dialogues, nomination committees andworking groups. These providers placed emphasis on conveying their expectations to investee
companies regarding the mitigation of sustainability-risk and/or the reduction of adverse
impacts on sustainability factors. Some providers specified that this approach applies either tocompanies in which significant shares are held or to situations where material sustainabilityrelated issues may cause detriment to the value of their investments. Another approach taken
by many providers is exercising voting rights at shareholder meetings on topics related tosustainability risks as well as sustainability impacts. Some providers also track investee
companies’ progress in integrating sustainability-related aspects in their activities and/or ask
investee companies to provide periodic reports on sustainability-related aspects. A few
providers further specified that if an investee company does not meet their sustainability
expectations a set of steps are foreseen: i) undertake an assessment, ii) work with the entity toaddress the issues identified, and iii) as a last resort if the issues are not resolved within a set
timeframe, the providers divest from the investee company. In terms of specific actions, a few
providers reported engaging with the investee companies that contributed most to theirinvestment portfolios’ CO2 emissions to set transition targets (e.g., net-zero targets).
27 providers reported not including sustainability-related considerations in their shareholder
engagement policies. Several of these providers noted not holding any direct equity, andtherefore cannot exercise active engagement, or do not have engagement policies at all.

5.1.1.3. Product-level SFDR disclosures
With this survey to undertakings, EIOPA did not focus on pre-contractual SFDR disclosures as it
already conducted analyses on that type of disclosure; a summary of it can be found in section 5.2of this report. Therefore, EIOPA sought with this survey information on product-level website
disclosures, on the review process of product-level disclosures, as well as other SFDR-related
information.


Article 10 of SFDR requires that providers publish and maintain on their website23 SFDR-related
information for each of their Article 8 and 9 products – this is further specified by Article 23 to
49 of SFDR DR. Out of the 84 providers that are in scope of SFDR, 45 providers provided at least
one link to an Article 8 or 9 IBIP, pension scheme or pension product website disclosure.
However, when reviewing these links, EIOPA found that many providers do not publish SFDR

23 According to Article 15(1) of SFDR, IORPs shall publish and maintain the information referred to the first subparagraph of Article 10(1)free of charge through electronic means, including on a durable medium or by means of a website, or on paper.

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Reportwebsite information in the way that SFDR DR requires them to. Indeed, the sections of thewebsite product disclosure listed in Article 24 and Article 37 of SFDR DR (e.g., ‘summary’ or‘investment strategy’ sections) are not included in these website disclosures. Furthermore,some providers did not publish the SFDR-related information of a product in the same part of
the website as other product information (e.g., marketing material). Moreover, some providers
publish a list of investment options with the only SFDR information being whether theinvestment option discloses under Article 8 or 9 SFDR, and ask the visitor to refer to the asset
manager’s website for the SFDR disclosure.
Article 2(17) of SFDR sets out that to qualify as ‘sustainable investment’ a financial productmust i) be invested in an economic activity that contributes to an environmental or social
objective, ii) not significantly harm any of those objectives, and iii) ensure that the investee
companies follow good governance practices. Given that the current regulatory framework
does not provide a standardized methodology to calculate the share of ‘sustainable
investments’ (SI), EIOPA asked in its’ survey to undertakings how they calculate the share of SI
made by their products in practice.
Around a third of providers under the scope of SFDR indicated that they did not calculate theshare of SI made by each of their product for three main reasons:• The first reason is that since the share of SI depends on the chosen investment option,
providers rely on the SI calculation (and disclosure) developed by asset managers.
• The second reason given by providers is that they do not have enough data to calculate
the share of SI at the MOP level.
• The third reason is that they lack products disclosing under Article 8 or Article 9 of SFDR.
Around two thirds of providers in the scope of SFDR indicated that they calculate the share of
SI made by each of their products, and none of these providers said that they use different
methodologies to calculate the share of SI across different product types. Some providers
reported gathering the share of SI of all investment options for each given product – usuallyfrom a third-party provider – and then calculate the weighted average share of SI based on thesize (e.g., AuM) of each investment option. However, many providers go further in their SI
calculation as they define a set of criteria for investments to be considered as ‘sustainable
investments’, which vary between providers and asset classes. Some criteria reported byproviders are presented below:•

Green turnover: Investments in a company that has at least X% (X varies from 20% to over
50% depending on the provider) of its turnover coming from activities/services that
contribute to one or more of the UN's Sustainable Development Goals. This contribution
typically relies on an assessment done by third parties, but a few providers reported having
their own methodology for this assessment.

•

Transition targets: Investments in a company that has made a commitment to a transition
pathway based on the framework provided by the Science Based Targets initiative (SBTi).

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



•

Taxonomy-aligned activities: Investments in a company that undertakes economic activities
contributing to one or more of the environmental objectives set out in the EU Taxonomy.

•

DNSH and good governance: Investments in a company must comply with the Do No
significant Harm (DNSH) principle and have good governance. This compliance is typicallymeasured through various indicators – including selected PAI indicators. For example,
companies should not have breached the "UN Global Compact Principles & OECD
Guidelines for Multinational Enterprises " (PAI 10) and or the "Lack of Processes &Compliance Mechanisms to Monitor Compliance with UN Global Compact Principles" (PAI11). Other examples are exclusions of companies involved in fossil fuels (PAI 4), in
controversial weapons (PAI 14), in cannabis, and in tobacco. Other providers reported
excluding companies based on controversy or ESG scores provided by third parties.

•

Sustainability-related bonds: Some providers consider that all “green bonds” qualify assustainable investments (e.g., mention of ICMA green and social bonds principles). For afew providers this also includes government bonds, as well as bonds relating to entities
that fulfil social or environmental roles (e.g., hospitals).

• Real estate: Investments in real estate that has environmental labels.
Article 12 of SFDR requires that providers ensure that any information published in relation to
Article 10 of SFDR (also in relation to Article 3 and 5 SFDR but the focus of this section is productlevel) is kept up to date. Generally, reviews of product-level SFDR disclosure follows similar
timelines and internal governance/processes as entity-level SFDR disclosure reviews, where
review intervals range from every month or quarter to every year (the latter being the mostcommon). Some providers reported monitoring or receiving reports on changes to externallymanaged investment options of their MOPs and then updating SFDR disclosures accordingly.
Like for entity-level SFDR disclosures, some providers use third-parties to update their SFDR
product-level information and have developed internal guidelines/guidance on SFDR
disclosures, which include the review and update of these disclosures.
Article 13 of SFDR requires that providers’ marketing communications do not contradict the
information disclosed pursuant to SFDR. To that extent, EIOPA sought input on the use of labels
as arguments to promote the sustainability profile of products. 18 providers reported usinglabelling schemes to promote the sustainability profile of their products. Almost all of theseproviders used national labelling schemes. Providers indicated choosing these national labels
because they are well-established in their respective countries, and because these labels
benefit from governmental oversight. A few reported also using non-governmental third-party
labels (e.g., Morningstar, Sustainalytics). For externally managed funds that are investment
options in their MOPs, providers reported relying on any labels/ratings used by those funds. 52
providers reported not using labelling schemes to promote the sustainability profile of theirproducts.

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While for other financial products (e.g., funds) sustainability-related information is more readily
available (e.g., via third party providers), sustainability-related information for IBIPs or pension
schemes/products is less available. To reduce this information gap, EIOPA collected SFDR productlevel information split by Article 6/8/9 for each provider: i) outstanding GWP at end 2022, ii) average
share of sustainable investments (SI) as defined in Article 2(17) of SFDR, and iii) average share oftaxonomy aligned investments (TR)24. The products for which it collected information on were IBIPs,
IBIPs that are also pension products, and IORPs.
Figure 4 - SDFR product-level information based on the survey to undertakings
Disclosing under
Article 6 SFDR

Disclosing under
Article 8 SFDR

Disclosing under
Article 9 SFDR

IBIPs
Number of providers that reported this field% of total outstanding GWP at end 2022

60

41

9

50.1%

49.4%

0.5%

14%

51%

3%

3%

Average share of SI
Average share of TR
IBIPs that are also pension products
Number of providers that reported this field

22

18

8

% of total outstanding GWP at end 2022

6%

93%

1.1%

Average share of SI

10%

53%

Average share of TR

0%

6%

IORPs
Number of IORPs that reported this field

9

6

0

% of total AuM at end 2022

56%

44%

0%

Source: EIOPA’s survey to undertakings, 2024

5.1.2. Implementation of IDD sustainability requirements
5.1.2.1. POG sustainability-related requirements
Out of the 99 providers that participated in this data collection, 89 providers were in scope of POG(i.e., manufacturers of insurance products), out of which 74 are IBIP manufacturers.
Despite POG being a well-established concept in the insurance regulatory landscape, with providers
being more accustomed to it compared to newer sustainability regulations, it appears, based on theevidence set out below, that the integration of sustainability-related objectives in the POG process
has not been performed by a considerable amount of insurance undertakings, particularly for non-

24 Limitation of the figures: EIOPA asked for the average share of SI and of taxonomy-aligned investments at provider-level, meaningthat each provider reported only two averages of SI (article 8, article 9) and two averages of taxonomy-aligned investments (Article 8
and Article 9).

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

Article 5 of the POG DR requires that insurance manufacturers incorporate sustainabilityrelated objectives when carrying out the target market assessment for a product.
41 insurance manufacturers indicated that they incorporate sustainability-related objectives inthe target market assessment for their IBIPs. To substantiate this, most of these insurance
manufacturers reported that they amended their POG policy to integrate sustainability-related
objectives when defining the target market, but did not provide further details on thisintegration. Others provided a clearer picture. Several manufacturers reported defining various‘sustainability-related objectives’ categories for the purpose of the target market assessment.
These categories are often based on the 3 IDD ‘sustainability preferences’ categories (i.e., PAI
consideration, share of SI, share of taxonomy-aligned investments). One provider alsomentioned defining a negative target market for consumers with sustainability preferences thatcannot be met by its product offering. One provider took a different approach and reported
relying on a mapping of the UN’s SDGs for the target market assessment. Some manufacturersof MOPs noted relying on the investment options’ SFDR disclosure for the target market
assessment (e.g., PAI consideration, Article 8 or 9).
9 insurance manufacturers indicated that they incorporate sustainability-related objectives inthe target market assessment for some of their IBIPs, typically only for IBIPs that they consider
as having sustainability features. 20 insurance manufacturers indicated that they do notincorporate sustainability-related objectives in the target market assessment for their IBIPs. Oneof the main reasons given by these manufacturers is that they do not offer IBIPs disclosing under
Article 8 or 9 of the SFDR. A few manufacturers indicated that they have not manufactured new
products or significantly revised existing products since the entry into force of the POG DR
sustainability requirements (i.e., 02 August 2022) and therefore have not updated their target
market assessment to include sustainability-related objectives. Some MOP manufacturers
noted challenges in integrating sustainability-related objectives in the target market
assessment, given the numerous investment options. Several of these 20 manufacturers
reported working on incorporating sustainability-related objectives in the target market
assessment for their IBIPs.
Article 6 of the POG DR requires that manufacturers incorporate sustainability-related
objectives when testing their insurance products (before they market it or in case of a significant
adaptation) to ensure that they meet the identified needs, objectives, and characteristics ofconsumers belonging to the target market. 39 insurance manufacturers indicated that they
incorporate sustainability-related objectives in the product testing for their IBIPs. Like forrequirements under Article 5 of the POG DR, most of these insurance manufacturers reported
that they amended their POG policy to integrate sustainability-related objectives when testingproducts, but did not provide further details on this integration. A few manufacturers reported

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expanding scenario analysis to include additional tests relating to sustainability. A few
manufacturers mentioned the use of interviews and/or focus groups with consumers to test
whether their products meet the identified sustainability-related objectives of the target
market. 5 insurance manufacturers indicated that they incorporated sustainability-related
objectives in the product testing for some of their IBIPs, while 26 insurance manufacturers
indicated that they do not do so at all. One of the main reasons given is that they do not offer
Article 8 or 9 IBIPs. Several of these manufacturers indicated that they plan on incorporating
sustainability-related objectives in the product testing in the future.
Article 7 of the POG DR requires that manufacturers continuously monitor and regularly review
insurance products that they have brought to the market, to ensure that products remain
consistent with the sustainability-related objectives of the identified target market. 34
insurance manufacturers reported doing so. Most of these manufacturers do so as part of theirgeneral POG review for each product, which is typically conducted every year (this varies
between every 3 months to every 3 years). Several manufacturers reported monitoring
investment options offered by their MOPs – done through the European ESG Template (EET) insome cases – especially in relation to SFDR-related information (e.g., if the investment option is“reclassified” from Article 6, 8, 9 of the SFDR). A few manufacturers also noted setting
sustainability-related thresholds in the monitoring of their MOPs. If thresholds are breached forone of its MOPs, a manufacturer noted that it stops making sustainability claims about the MOP
and adjusts the allocation within 45 days. A few manufacturers mentioned assessing results ofsurveys on sustainability-related aspects filled in by consumers or by external providers and takeremedial actions if they see the target market’s sustainability-related objectives not being met.
12 insurance manufacturers indicated that they monitor and review some of their IBIPs –typically their IBIPs with sustainability features – to ensure ongoing alignment with the target
market’s sustainability-related objectives.
24 insurance manufacturers indicated that they do not monitor and review their IBIPs to ensureongoing alignment with the target market’s sustainability-related objectives.
Article 8 of the POG DR requires that manufacturers select distribution channels that areappropriate for the target market of their IBIPs, and that they ensure these channels take into
account the target market's sustainability-related objectives, if any. 37 manufacturers reported
monitoring that their distribution channels collect information about and take into account thetarget market's sustainability objectives/preferences when distributing IBIPs. Approaches to
distribution varies among manufacturers; some directly distribute their IBIPs, while others use
intermediaries in addition to direct distribution, and some rely entirely on distribution via
intermediaries. For direct distribution, manufacturers reported ensuring that their IBIPs matchthe target market’s sustainability-related objectives by recording consumers sustainability
preferences during the advice process (e.g., collecting data on sustainability preferences). Somemention the use of digital tools to better collect and analyse this data. For indirect distribution

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Report(e.g., via intermediaries), some manufacturers noted that it is the responsibility of theintermediaries to ensure that they take into account the target market's sustainability-related
objectives when advising on IBIPs. Contrastingly, others reported requesting sustainability
preferences information for their IBIPs from intermediaries (e.g., by sending surveys to theintermediaries or data collection exercises), in order to monitor and assess that IBIPs are
distributed taking into account the target market’s sustainability-related objective. 5
manufacturers reported partially monitoring that their distribution channels collect information
about and take into account the target market's sustainability objectives when distributing
IBIPs. 26 manufacturers reported not doing so at all. Several of these manufacturers noted thatthey do not directly distribute IBIPs and consider that it is up to the intermediary to ensure thatit considers the target market's sustainability objectives when advising on IBIPs. A few
manufacturers noted that they do not offer advice in relation to their IBIPs.
When designing and developing MOPs, manufacturers choose the investment options of the
products, or make available a range of investment options from which consumers select theirpreferred options. EIOPA asked MOP providers how they selected investment options that they
make available, also in relation to sustainability-related objectives. Particularly in two MS,
providers indicated having a selection process for externally managed investment options at
two levels. The first level is an assessment of the sustainability profile of the third-party
managing the investment options (e.g., fund manager). This assessment reportedly considered
whether the third-party signed the UN PRI, whether it had set a transition target for its
investments and whether the third-party’s management team had sustainability expertise. The
second level is an assessment of the investment option’s (e.g., fund) sustainability profile which
reportedly considers aspects such as the ESG rating of the investment option or how theinvestment options fares in relation to PAI indicators (e.g., exposure to coal). Somemanufacturers in other MS, reported also conducting an assessment at one of the two levels.
For example, one manufacturer reported not accepting as potential investment options in its
MOPs any Article 6 of SFDR funds that were marketed as having ESG features.
The new sustainability-related requirements set out in the POG DR do not specify that thesustainability-related requirements only apply to IBIPs. In that context, EIOPA asked providers
whether they integrate sustainability-related objectives in the POG processes of their non-life
insurance products. 17 providers reported doing so for all of their non-life products. 10
providers reported doing so for some of their non-life products, depending on the line ofbusiness. These lines of business are health insurance, mobility-related insurance (e.g., motor
insurance, bike insurance), renewable energy insurance, pollution liability insurance, insurance
targeting vulnerable consumers, property insurance, natural catastrophe insurance. Moreover,a few providers reported using sustainability-related checklists/questions (e.g., one provider
reported taxonomy-related questions) when assessing whether a non-life product hassustainability-related objectives. 29 providers (that manufacture non-life products) reported

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not integrating sustainability-related objectives in their POG processes for their non-life
products.

5.1.2.2. IDD suitability assessment sustainability-related requirements
Out of the 99 providers that participated in this data collection 47 providers were in scope of IDD
suitability assessment sustainability-related requirements (i.e., distributors of IBIPs).
Most of the providers reported having integrated sustainability preferences in the suitability
assessment. However, in some cases, assessments appear to be insufficiently granular and precise,especially in relation to the use of the three IDD sustainability preferences criteria25 for bothcollection of consumer’s sustainability preferences and assessment of suitability.


Article 9 of the IDD DR on suitability requires that providers giving advice on an IBIP collectfrom consumers information – including on their sustainability preferences – for the purpose of
the suitability assessment. EIOPA’s Guidance on the integration of sustainability preferences inthe suitability assessment under the IDD26 further specifies this.
44 providers in scope of IDD suitability assessment requirements indicated collecting
information on consumers’ sustainability preferences. Almost all indicated doing so via
questionnaires to consumers, either via paper forms or digitally – the former being slightly moreprevalent. Indeed, 16 providers indicated using automated advice processes for the distributionof their IBIPs, while 28 reported not using such. Several of those collecting sustainability
preferences only in paper form reported being in the process of building tools to do so digitallyin the future.
The range of sustainability preference questions in the questionnaires to consumers varies
significantly. Some have only one or two generic sustainability questions, while others present
a more extensive set of questions – however, without clear reference to the 3 IDD sustainability
preferences criteria. Others reported having a set of detailed questions tailored to the 3sustainability preferences criteria. Especially when the questionnaires are carried out digitally,
the sustainability questions are layered, helping avoid consumer overload. One provider
explicitly mentioned that when a consumer is filling out the questionnaire digitally, theconsumer cannot go further in the purchasing process if the sustainability questions are notanswered.
Based on the answers to the sustainability preferences questions, several providers reported
selecting the most appropriate product/investment strategy or giving the consumer a list ofinvestment options that meet their sustainability preferences to choose from. Other providers
did not specify how they considered consumers’ answers to the sustainability preferences
questions. In case providers do not have suitable product in relation to sustainability

25 Article 2(4) of 2017/2359 DR (IDD suitability DR)
26 EIOPA’s Guidance on the integration of sustainability preferences in the suitability assessment under the IDD – Link

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preferences, several of them indicated asking if the consumer wants to adapt their preferences
and record this adaptation if there is one. A few providers also reported giving their consumers
educational material on what Article 8 and Article 9 investments are. Finally, one provider notedthat less than 20% of their consumers stated having sustainability preferences.
Article 10 of the IDD requires that providers possess appropriate knowledge and ability tocomplete their tasks and perform their duties adequately, and that they comply with continuing
professional training and development requirements in order to maintain an adequate level of
performance corresponding to the role they perform and the relevant market.
36 providers indicated having fully trained their employees distributing IBIPs on how to consider
sustainability preferences during the suitability assessment. Providers reported organisingmandatory online trainings (e.g., webinars, e-learning tools) as well as in person mandatory
trainings, which reportedly had high attendance rates (most indicated 100%, lowest was 77%).
While most providers indicated offering trainings on both general sustainable financeframework and IDD sustainable preferences, a few noted offering trainings only on thesustainable finance framework in general. In addition to trainings, many providers reported
giving their employees educational material on IDD sustainability preferences and manuals to
use when assessing consumers sustainability preferences. 7 providers indicated having partiallytrained their employees distributing IBIPs on how to consider sustainability preferences during
the suitability assessment, while 4 providers reported not having done so at all.

5.1.3. Non-life insurance products with sustainability features
While there is currently no understanding as to what a non-life product with sustainability featureis (aside from the Taxonomy-aligned underwriting of climate-related perils), 16 insurance
undertakings from 11 MS classified – based on internal classification processes – some of their nonlife insurance products as having sustainability features or as being “green”.
At year-end 2022, these 16 undertakings reported offering a total of 309 non-life product types
with sustainability features (max: 127 product types, min: 1 product type). The GWP for non-life
with sustainability features as share of total non-life GWP also varies across undertakings with anaverage of 17% (max: 67%, min: 0.1%).
The understanding of what is a non-life product with sustainability features varies fromundertaking to undertaking. One provider restricted its understanding of non-life products withsustainability features to those that are taxonomy-eligible based on the underwriting climaterelated perils criteria of the Taxonomy Regulation. Another provider reported working on aclassification approach based on the Taxonomy. Other providers take a broader approach andenlarge their understanding to any product that relates to environmental aspects, including
benefitting the environment as well as reducing risks related to the environment. While mostundertakings limit their understanding to environmental aspects, a few undertakings included inPage 31/54

ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Reporttheir understanding also ‘social’ aspects, such as products that target vulnerable consumers or thatstrengthen social inclusion.
In terms of the attribute(s) of the product that allows it to benefit the environment or society, someproviders find that it is sufficient for products to offer coverage to “green” or “sustainable” assets(e.g., solar or wind farms). One provider noted offering premium discounts for green assets (e.g.,
discounts for electric vehicles). A few providers reported integrating sustainability factors in theirclaims management process, or the allocation of premium paid for a given product to sustainablecauses (e.g., to preserve biodiversity).
In terms of lines of business, household insurance, motor insurance and natural catastrophe
insurance appear to be the ones with the most products with sustainability features. Beyond thelines of business shown in Figure 5, undertakings reported having products with sustainability
features also in the following lines of business: marine insurance, agriculture/crop insurance,
aviation insurance, electric scooter/bike insurance.
Figure 5 – Lines of business in which undertakings reported having products with sustainability
features (in number of undertakings)

Source: Survey to Undertakings
One undertaking that has not yet introduced non-life products with sustainability features indicatedthat it is awaiting clarity on what regulators would consider a non-life product with sustainability
features to be. Another undertaking reported being in the process of defining internally what it
would consider a non-life insurance product with sustainability features to be.

5.2. SFDR PRE-CONTRACTUAL DISCLOSURE ANALYSIS

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EIOPA conducted two analyses (one in 2022-2023 and another in 2023-2024) of SFDR precontractual product disclosure based on a cumulative sample of 200 IBIPs and IBIPs’ investment
options taken from EIOPA’s Cost and Past Performance Report27 (CPP) database.
Generally, these disclosures are compliant with the requirements set out in the SFDR and the
SFDR DR, however, two main groups of issues were identified in some of the disclosures: theaccessibility of these disclosures on undertakings’ websites and vague statements made within
the disclosure.

Main findings of the pre-contractual disclosure analysis
SFDR pre-contractual disclosures should be easily accessible on websites. However, EIOPA foundthat these disclosures are often hard to find on companies' websites or are sometimes missing.









Several undertakings did not provide on their website the link to the SFDR disclosure for each
investment option of their MOPs. These undertakings usually only had a list of the available
investment options for their MOPs and indicated for each investment option whether it
disclosed under Article 6, 8 or 9. A few cases were also seen of undertakings showing a list ofinvestment options without the links to the SFDR disclosures, as well as without indicating
whether the investment options listed disclosed under SFDR Article 6, 8 or 9.
While most undertakings had working links to SFDR disclosure, several undertakings had links
to investment options offered in MOPs that did not work, not allowing EIOPA to retrieve thedisclosures.
Some undertakings did not include the SFDR disclosure of their MOP and its investment optionsin the MOP’s dedicated webpage but included this information in a different webpage
containing entity level disclosures (e.g., investors relations webpage). This issue was also
observed for non-MOP products.
A few cases were also identified in which MOPs investment options were mistakenly using SFDR
periodic disclosure templates instead of the SFDR pre-contractual product templates.
Some undertakings referred to external documentation within the SFDR disclosure but did not
say where that documentation could be found (e.g., no link to the documentation), norreferenced the relevant section in that documentation.

In addition to accessibility issues, the information in SFDR pre-contractual disclosures was at times
vague, not fully complying with the requirements set out in the SFDR and SFDR DR.


Discrepancies were observed between SFDR information highlighted on the website and theactual SFDR disclosure where some investment options were presented as Article 9 on thewebsite, while the SFDR disclosure indicated that these investment options disclosure under

27 EIOPA's Costs and Past Performance Report December 2023 - Link

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













Article 8. Other discrepancies were observed between sustainability-related information in the
SFDR disclosure and other pre-contractual documentation.
Inconsistencies were also observed within the SFDR disclosures. For example, an investment
option’s disclosure indicated that it would mostly do social sustainable investments, while itlater stated that most of its investments are made in environmentally-focused companies.
Another example is an investment option’s SFDR disclosure showing two different percentagesof sustainable investments, one in the first page and another one in the allocation table figure.
In the disclosure, several products disclosing under Article 8 simply state that they will makeinvestments considering ESG characteristics. There is no explanation as to what environmental
and/or social characteristics the products promote, nor how they will promote them.
Some investment options use sustainability-related names such as “sustainable”, “climate”
while disclosing under Article 8 and having a 0% commitment to make sustainable investments
and 0% taxonomy-aligned investments.
Several Article 9 investment options fail to provide any information on their sustainable
investment objective. Other Article 9 investment options did not indicate any minimum
percentage commitment of sustainable investment. Moreover, some Article 9 disclosures
expressed sustainable investments as a range (e.g., from 10 to 50%).
All sections of the disclosure were filled in most of the reviewed SFDR disclosures. However,some explanations were lengthy (e.g., beyond a page for one question) and unclear. Statements
about products’ social characteristics and social sustainable investments were found to beparticularly vague.
Several undertakings provided unclear explanations as to how their sustainable investments
under Article 2(17) meet the DNSH criterion. For example, in some cases it is unclear how the
PAI-indicators are taken into account for this purpose.
Formatting issues were also noticeable, as some disclosures omitted sections or icons set out
in the SFDR DR. Moreover, sections that should be removed from the disclosure – for example
where no specific index has been designated as a reference benchmark – have been kept incertain disclosures. Further, a few cases were noticed where sections or graphs not set out in
SFDR DR were added to the disclosure.

Proposal 2 – Building a common EU supervisory approach in relation to sustainability claims andgreenwashingIn line with its mandate28, EIOPA will foster supervisory convergence in relation to greenwashing
and act as a forum for supervisors to share their experiences in supervising greenwashing
through EIOPA’s greenwashing workstream.
EIOPA will achieve this by implementing various initiatives at EU level:

28 Article 8(1)(a), Article 8(1)(b) and Article 29(1)(a) of EIOPA Regulation

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Reporta)

An Opinion on sustainability claims and greenwashing, which EIOPA is publishing with thisFinal Report. The Opinion aims to remedy a lack of a common EU approach to supervise
sustainability claims and greenwashing, and to ensure the effective and consistentsupervision of greenwashing in the EU insurance and pension sectors. EIOPA will monitor theeffective implementation of this Opinion by NCAs.
b)
EIOPA will explore the use of Suptech to help the supervision of greenwashing, particularly
in relation to disclosure supervision. This exploration also aims to mitigate NCAs’ resource
limitations. EIOPA’s has already started assisting 4 NCAs in developing Suptech tools andguidance to identify potential greenwashing within the context of a technical support project
promoted by the European Commission – DG REFORM. Other activities may be undertaken,
also based on lessons learned from the DG REFORM project.
c)
EIOPA may work on a paper setting out how sustainability claims are made across all stagesof the insurance and pension lifecycles, and include a list of examples of good/bad practices.
This paper would leverage work already covering sustainability claims, which are EIOPA’s
Progress Report, this Final Report, as well as the aforementioned Opinion.
 EIOPA may undertake more initiatives to further develop the supervision of sustainability claims
and greenwashing. Moreover, to facilitate enforcement, EIOPA may develop further internalguidance on the use of product intervention powers also in relation to greenwashing for
products within the remit of PRIIPs, taking into account that the product intervention provisionsin PRIIPs Regulation refer to the marketing of IBIPs and not just the distribution or sale, and also
the criteria laid down in Article 1 and 2 of Commission Delegated Regulation (EU) 2016/1904
on product intervention refer to “the information, marketing or other promotional material
associated with the investment”.

Proposal 3 – Tackling greenwashing through enhanced supervision and targeted supervisory
activities
 EIOPA will use its mandates to monitor and tackle greenwashing:a)
EIOPA will use its mandate to carry out mystery shopping exercises throughout the EU toensure compliance with requirements in the advice process, including sustainability
requirements. EIOPA is currently coordinating a mystery shopping exercise in 8 Member
States and while this does not focus solely on sustainability requirements, it covers them.
b)
EIOPA will continue to carry out market monitoring activities on greenwashing.
c)
EIOPA will continue to carry out consumer research also in relation to sustainability (e.g.,
inclusion of sustainability-related questions in EIOPA’s Eurobarometer Survey).
d)
EIOPA will continue to support NCAs in their supervisory activities, by organising capacity
building initiatives related to sustainability.

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
a)
b)
c)
d)
e)

f)

g)

h)

Within their respective mandates, NCAs are recommended to continue enhancing their efforts
to tackle greenwashing by:
Verifying insurance and pension providers’ compliance with sustainability-related
requirements (e.g., SFDR, IDD sustainability-related requirements, Taxonomy regulation).
Monitoring that when insurance and pension providers make sustainability claims they abideby the 4 principles set out in the Opinion on greenwashing and sustainability claims.
Where relevant, monitoring the evolution and availability of life and non-life products
claiming to have sustainability features in their market.
Where appropriate, evaluating the use of Suptech tools to support risk-based supervision ofsustainability claims, and particularly of sustainability-related disclosure.
Where relevant, NCAs are encouraged to share with EIOPA lessons learned stemming fromtheir supervisory activities on greenwashing or good supervisory practices used by the NCA
to identify greenwashing.
Where relevant and if the NCA collects complaints directly from consumers, or if it has awhistleblower section on its website, NCAs are encouraged to allow consumers/private
individuals to submit complaints or tips about potential greenwashing in an anonymised
manner.
Where appropriate and relevant, NCAs are recommended to take enforcement measuresagainst providers that have been found to have done greenwashing, this includes cease anddesist measures, as envisaged in IDD, and other relevant measures available at the national
level. This includes, where NCAs have competence under the Unfair Commercial Practices
Directive, to ensure claims which may amount to greenwashing are addressed and act as adeterrent against misleading sustainability claims.
Where appropriate and relevant in addition to the abovementioned measures, NCAs shouldmake use of their supervisory and investigatory powers under SFDR to ensure that providers’marketing communications do not contradict the information disclosed pursuant to SFDR.

Proposal 4 – Preventing greenwashing

To ensure that their sustainability claims do not lead to greenwashing, insurance and pension
providers are recommended to:a)Follow the 4 principles set out in the Opinion on sustainability claims and greenwashing.
b)
Include greenwashing risk considerations as part of their internal governance structurearound sustainability.
c)Ensure that entity-level decarbonisation/transition commitments, if any, are substantiatedwith concrete plans, intermediary targets, clear and granular data and that progress isregularly reported to the relevant stakeholders.

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Reportd)e)Where there are no clear criteria defining what has sustainability features and what does nothave sustainability features, ensure that information is fair, clear, and not misleading.
Under internal control and reporting systems, include and implement appropriate
sustainability control and reporting arrangements.

6. SUPERVISORY EXPERIENCES

Supervising greenwashing and ensuring compliance with the relevant sustainable financerequirements is necessary to prevent and mitigate greenwashing as well as to prevent consumer
detriment in the insurance and pensions sectors. Conscious of this, EIOPA and its Members (NCAs)
have started to integrate greenwashing risk in their supervision. In this context, EIOPA conducted
two NCA surveys requesting input on aspects related to the supervision of greenwashing. The firstsurvey closed in January 2023 (please refer to page 35-46 of the progress report for a summary ofthis survey), and a second, shorter survey closed in January 2024.
The main takeaway from these surveys is that there was a noticeable increase in supervisoryattention around sustainability-related requirements and greenwashing from the 2023 to the2024 survey. In the 2024 survey, more NCAs reported occurrences of potential greenwashing (from3 to 5 NCAs). NCAs also reported more supervisory activities around greenwashing (from 15 to 21NCAs), more resources dedicated to greenwashing supervision (from 22 FTEs to 30 FTEs), as well as
more internal supervisory tools developed around greenwashing. This could be attributed to thegradual implementation of sustainability-related requirements, coupled with a growing consumer
interest in sustainable offerings and providers expanding their sustainability offerings. However,
several challenges in the supervision of greenwashing remain, notably: resource constraints, lack ofsustainability-related data, the complexity of the regulatory framework and a lack of common
approach to supervise greenwashing.

6.1. NCAS’ SUPERVISORY ACTIVITIES AROUND GREENWASHING
There was an important increase in NCAs that reported carrying out supervisory activities aroundgreenwashing, from 15 NCAs in the 2023 survey to 21 NCAs in the 2024 survey. Of these 21 NCAs,
14 NCAs did so for both the insurance and pensions sectors, whereas 6 did so exclusively in relation
to the insurance sector and 1 NCA exclusively for the pensions sector.

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The most common supervisory activities included regulatory disclosure compliance checks (13NCAs) and thematic reviews/surveys related to sustainability requirements such as SFDR and IDD
sustainability requirements (14 NCAs) (Figure 6). 10 NCAs provided guidance to the industry, and 11
reported carrying out workshops with the industry. Consumer financial literacy initiatives werecarried out by 7 NCAs, market monitoring activities by 8 NCAs, and on-site/off-site inspections were
undertaken by 6 NCAs. Additionally, 2 NCAs noted supervisory activities related to the monitoringof pension and insurance-related content via social media and press monitoring. Some of the key
highlights stemming from these activities are listed below:










In addition to the SFDR pre-contractual disclosure analysis outlined in section 5.2 of this report,
a number of NCAs undertook independent SFDR compliance assessments. Some of thempublished the results of their assessments29. To address the issues identified in theseassessments, several NCAs issued recommendations to providers. Moreover, one NCA reported
taking supervisory measures against three pension providers after identifying issues relating to
SFDR periodic disclosure. Another NCA, after identifying issues in pre-contractual and website
disclosures, took supervisory measures against one insurance undertaking.
A number of NCAs reported that their market is still in the process of fully implementing
sustainability-related requirements, and therefore some of their supervisory activity is geared
towards guidance to the industry. For example, BaFin provided detailed guidance on SFDR
product-related information and organised regular workshops with the industry and auditors,
focusing on their implementation of the SFDR. Additionally, several NCAs have issued/areplanning to issue ‘Dear CEO’ letters asking the industry not to engage in greenwashing30.
After noting an increase in misleading sustainability claims in life insurance advertisements,
ACPR issued a recommendation aimed at improving sustainability claims made in life insurance
advertising31. Following the entry into force of this recommendation in April 2023, the French
NCA noticed a decline in the use of vague or unclear sustainability claims in life insurance
advertising.
The AFM published in October 2023 a set of guidelines on sustainability claims32 which provide
guidance to market participants on how to avoid making misleading sustainability claims.
The Swedish FSA followed up the ESAs Consumer Factsheet on sustainable finance with a video
providing further information to consumers on how to allocate their money sustainably33.
One NCA has updated the conduct-related data it requests from undertakings in its market toinclude data on the provision of sustainable products, on marketing campaigns with sustainable
elements and on complaints related to greenwashing.

29 MFSA’s analysis – link ; AFM’s pension analysis – link ; AFM’s insurance analysis – link; DFSA’s analysis - link
30 CBI’s “Dear CEO” letter – link
31 ACPR’s recommendation on sustainability claims in life insurance advertising - link
32 AFM’s guidelines on sustainability claims – link
33 FI-SE’s consumer financial literacy initiative - link

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Figure 6 – NCAs that carried out supervisory activities aimed at tackling greenwashing – January2024

Source: Survey to NCAs
Supervisory tools to tackle greenwashingTools aimed at guiding supervisory teams help ensure the adequate supervision of greenwashing.
There was an increase from 2 NCAs in the 2023 survey to 6 NCAs in the 2024 survey which havedeveloped internal guidelines related to the supervision of greenwashing. One NCA focused on
preparing educational material on sustainability requirements for their supervisory teams, while
three other NCAs developed internal supervision policies focused on sustainability. Yet another NCA
noted developing internal methodologies and checklists for sustainability-related supervisory
analyses. Another NCA reported working on an internal methodology to evaluate the sustainability
features of IBIPs. 6 NCAs are currently in the process of, or are planning to insert greenwashingrelated considerations in supervisory guidelines or other tools. 12 NCAs have not yet developed
supervisory guidelines on greenwashing and are looking to EIOPA for further guidance. Some NCAs
emphasise that guidance provided by EIOPA should be concrete and use examples where possible.
4 NCAs noted not foreseeing the development of such tools in the future.
EIOPA’s progress report already highlighted that 21 NCAs saw value in the use of Suptech to tackle
greenwashing. NCAs reiterated their interest in Suptech, particularly as a mean to alleviate resource
constraints and address data availability issues. Indeed, several NCAs reported building or planningto build new Suptech tools and seeking out ESG data providers to close data gaps.

6.2. OCCURENCES OF POTENTIAL GREENWASHING

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In carrying out the supervisory activities outlined in the section above, some NCAs identified
occurrences of greenwashing. From the 2023 survey to the 2024 survey, there was an increase in
the number of NCAs that identified one or more occurrences of greenwashing from 3 NCAs to 5
NCAs. Most of the greenwashing occurrences related to insurance at product level (4 NCAs),
followed by pension at entity/product-level (3 NCAs) and insurance at entity-level (1 NCA). Theseoccurrences share some commonalities. 3 of the 5 NCAs noted that sustainability claims were madewithout adequate substantiation. 2 NCAs highlighted that unclear aspects and inconsistencies
present in the current sustainable finance regulatory framework gave rise to these occurrences.
Finally, issues around the understandability and accessibility of the sustainability claims werehighlighted by all 5 NCAs.
There was also an increase in the number of NCAs that did not identify greenwashing occurrences
but are currently investigating potential greenwashing occurrences from 5 NCAs in the 2023 survey
to 6 NCAs in the 2024 survey. These related to the use of sustainability-related words in IBIPs names,
sustainability claims about non-life insurance products, and potential non-compliance withsustainability-related requirements (e.g., SFDR, POG DR).
The NCAs that did not identify occurrences of greenwashing are the majority, however thisnumber decreased from 21 NCAs in the 2023 survey to 19 NCAs in the 2024 survey. The lack ofgreenwashing occurrences, according to 13 NCAs, is likely due to the limited availability of productswith sustainability features in their markets. Some NCAs indicated that insurers and pension
providers took a cautious approach when branding their products/investments as having
sustainability features, engaging in so-called “green-bleaching”. Other reasons raised include thenovelty of the sustainability-related requirements (5 out 19 NCAs), resource constraints limiting thesupervisory activities conducted in this area (4 out of 19 NCAs) and the inadequacy of the regulatory
framework aimed at tackling greenwashing (4 out of 19 NCAs).

6.3. SUPERVISORY CAPACITIES, CHALLENGES AND POWERS
6.3.1. Supervisory capacities
In the January 2024 survey, NCAs reported a total of 30 FTEs dedicated to sustainability-related
supervisory tasks in the insurance and pension sector. This represents an increase of 8 FTEs fromthe 2023 survey, which is slightly less than the planned increase reported in the 2023 survey of anadditional 11 FTEs. In addition to the 30 FTEs dedicated to sustainability aspects, NCAs also reported
58 FTEs working on the supervision of sustainability aspects as part of general conduct supervision,
but not dedicated to sustainability.
16 NCAs reported that they have enough resources and expertise to adequately tackle
greenwashing. Several noted considerable investments both in resources dedicated to supervising

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Reportgreenwashing and in fostering sustainable finance expertise within their institutions. A few NCAs
currently see low risk of greenwashing in their market, and therefore consider their resources andexpertise sufficient. As sustainability requirements are clarified and implemented, some of these 16
NCAs anticipate facing pressures in terms of resources and expertise. Hence, they are adopting aforward-looking approach, intending to hire more sustainable finance experts (16 FTEs in the next
two years) and initiate capacity-building programmes in the upcoming years.
14 NCAs reported that they do not have enough resources and expertise to adequately tackle
greenwashing. Several of these NCAs noted that they have to carry out additional supervisory tasks
without additional resources. Moreover, several NCAs highlighted a shortage of staff with expertisein sustainability. However, efforts are underway to address this through capacity-building initiatives.
Figure 7 – FTEs dedicated to sustainability-related supervisory tasks, January 2024
FTEs dedicated to sustainability

FTEs solely supervising sustainability requirement ingeneral [Total]
o/w FTEs supervising sustainability related
disclosure requirements
o/w FTEs supervising sustainability related POG
requirements
o/w FTEs supervising sustainability related IDD
requirements for distributors
o/w FTEs supervision sustainability requirementsfor pension providers

Current

Increase in next 2
years

30

16

14

9

1

2

1

2

2

2

Source: Survey to NCAs

6.3.2. Supervisory challenges
One of the main challenges reported by NCAs in supervising greenwashing are resource
constraints (8 NCAs). The section on supervisory capacities above (6.3.1) shows that there is a totalof 30 FTEs dedicated to sustainability-related tasks – this is an average of 1 FTE per NCA dedicatedto sustainability topics. Moreover, there are significant differences among NCAs, with 5 NCAs having
3 FTEs or more and others having none. While there is also some staff working on the supervisionof sustainability aspects as part of general conduct supervision, as noted by some NCAs, such staff
might not always have the adequate expertise to supervise sustainability requirements and claims.
This leads to another key challenge reported by NCAs, which is a lack of expertise in sustainablefinance (9 NCAs), especially given the complexity of the current regulatory framework. An
additional challenge reported by NCAs is the complexity and lack of clarity of the current regulatory

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Reportframework – some NCAs also noted that these requirements are often changing, which does notallow them to build enough expertise before newer requirements come into force.
In order to lessen resource constraints and expertise-related issues, many NCAs recognise thenecessity to not only enhance the sustainable finance knowledge among their staff – by way ofworkshops or trainings – but also to recruit sustainable finance experts.
Another point mentioned by some NCAs is the lack of data related to sustainability and thatassessing the compliance of disclosures can be quite resource intensive. Moreover, some NCAs
note that given that insurance and pension providers are not required to submit their sustainabilityrelated disclosures to NCAs (e.g., SFDR disclosure), they have to carry out resource-intensive datacollection efforts, reducing the time dedicated to the assessment of the disclosure. Finally, NCAs
pointed to a lack of an EU common approach in supervising greenwashing.

6.3.3. Supervisory mandates and powers
24 NCAs believe that their supervisory mandates and powers allow them to sufficiently tackle
greenwashing. However, they note that the “NCA supervisory toolkit” to measure, monitor, analyseand remediate greenwashing (i.e., supervisory knowledge, supervisory practices, supervisory tools)
needs further development. According to many of these NCAs, focus should now be on thepractical implementation of the supervision of greenwashing. Two NCAs note that while they canaddress greenwashing when it has been assessed as such, they do not have the mandate to takepreventive supervisory activities in relation to greenwashing.
6 NCAs noted not having sufficient supervisory mandates and powers to adequately tackle
greenwashing. A few of these NCAs noted that they only have a specific mandate to identify,
prevent and sanction greenwashing practices in information mandated by regulatory requirements
such as SFDR. However, they note a gap with respect to other information made available to theconsumers, such as advertising or other mediums in which sustainability claims are made.
Proposal 5 – Enhancing supervisory resources and expertise to tackle greenwashing

Where feasible given budgetary constraints, NCAs that indicated not having sufficient
resources/expertise to adequately tackle greenwashing are encouraged to increase resources
dedicated to sustainability-related supervisory tasks, and to organise capacity building
initiatives for staff on sustainable finance.
Given the cross-sectoral nature of greenwashing, (non-integrated) NCAs are encouraged toclosely cooperate with the securities and/or banking supervisory authorities of their Member
State in their approach to tackling greenwashing.
For both integrated and non-integrated authorities, where relevant, NCAs are encouraged to
set up one internal horizontal group/unit/function within their current governance structure

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Reportthat is tasked with high-level coordination of sustainability aspects – including greenwashing –and that facilitates information sharing across the authority.

7. POSSIBLE IMPROVEMENTS TO THE REGULATORYFRAMEWORK
Based on the issues and gaps already identified in EIOPA’s progress report, as well as additional
issues identified in this final report, in this section EIOPA proposes improvements to the regulatory
framework that would enhance the tackling and supervision of greenwashing in the insurance andpensions sectors.

7.1. NON-LIFE INSURANCE PRODUCTS WITH SUSTAINABILITY FEATURES
Significant efforts – both policy as well as supervisory – have gone into defining and disclosing thesustainability features of investment products such as IBIPs, pension schemes, PEPPs and otherpension products. While EIOPA believes that investments, specifically retail investments, are crucial
to finance the transition to a sustainable economy, non-life insurance products also have an
important role to play in the transition:

According to EIOPA’s Solvency II database at the end of 2022, non-life insurance accounted for€476 Billion in terms of gross written premium (6% increase since 2021) in the EEA with the‘Fire and other damage to property’ amounting to €112 Billion in gross written premium (GWP)
alone34.
According to EIOPA’s Eurobarometer survey conducted in July 2023, the penetration of non-life
insurance is greater than that of life insurance, showing its important place in the lives of EU
consumers.
53% of EU consumers have bought or considered buying sustainable insurance or pension
products or would be interested to know more about them in 2023.

Looking at the current EU sustainability-related framework, two pieces of legislation refer to thesustainability features of non-life insurance products:


The POG delegated regulation does so implicitly as it introduces the concept of “sustainability
factors” of an insurance product (POG DR Article 5) and the consideration of consumer’s

34 While it is true that not all of the line of business (LoB) ‘Fire and other damage to property’ is related to sustainability factors, this LoB

includes damage stemming from natural catastrophes (e.g., droughts leading to wildfires).

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Reportsustainability objectives (POG DR Article 5, 6, 7, 8 10, 11) in the manufacturing of a product.
While left unspecified, these considerations are not limited to insurance investment products,
but also cover non-life insurance products.
The Climate Delegated Act under the Taxonomy regulation provides a clear way to measuretaxonomy alignment when underwriting climate-related perils.

EIOPA is of the view that the current framework does not set explicit standards for non-life
products that can claim to have sustainability features and those that cannot, giving rise to a riskof greenwashing. Indeed, POG only requires that sustainability be considered in productmanufacturing, and the Climate Delegated Act, given its scope, only offers measurement oftaxonomy alignment for the underwriting of climate-related perils. In addition, the IDD includes
general rules around ensuring that marketing communications are clear, fair and not misleading andthat marketing communications are always clearly identifiable as such, but these requirements are
not specific to sustainability-related marketing communications. As mentioned in EIOPA’s progress
report on greenwashing, this is a gap in the current sustainability-related framework.
Moreover, as highlighted in the section on the survey to undertakings (5.1.3), 16 insurance
undertakings reported selling products with sustainability features, and their understandings of anon-life product with sustainability features varies. Further, 18 NCAs reported being aware of“green” or “sustainable” non-life insurance products in their markets, while 10 NCAs indicated not
being aware of such products in their market.

7.1.1. Clarifying what are non-life products with sustainability features
EIOPA sees merit in addressing the identified gap and tackling greenwashing in non-life insurance
products. Towards that goal, EIOPA offers insights on potential approaches, focusing on 7.1.1.1 –potential sustainability features of non-life products and on 7.1.1.2 – potential product-level
disclosure. If an approach for non-life products with sustainability feature were to be developed,
EIOPA sees merit in developing these two steps jointly.
The ideas presented here are preliminary indications, requiring further elaboration as well as
stakeholders’ input, for example by way of a public consultation.

7.1.1.1. Potential sustainability features of non-life products
Categorizing sustainability features of non-life insurance products should consider current
sustainability requirements, work previously done by EIOPA (e.g., impact underwriting), as well as
current market practices.
Current sustainability-related requirements such as SFDR and the Taxonomy Regulation, indicatethat to have sustainability features, a product – or an economic activity in the case of the Taxonomy

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Report– must benefit the environment or society (e.g., ‘promote environmental or social characteristics’,‘have a sustainable investment objective’, ‘contribute to an environmental objective’, ‘consider
principal adverse impacts’, ‘not significantly harm’).
Beyond taxonomy-aligned insurance of climate-related perils, EIOPA looked at current market
practices of products with sustainability features. It did so via a survey to NCAs, desk research,
publications35, a survey to undertakings (see 5.1.3) and a request for input to the IRSG. Below arepresented some of these products, which are bundled by type of product attribute which in theproviders’ view allows them to achieve a sustainability benefit.
Some non-life products link the subscription/renewal of a non-life policy with an action by the
insurer that benefits the environment or society. For instance, some non-life products indicatethat they allocate a portion of the premium paid by consumers to sustainable causes. They dothis by directly giving a portion of the premium to certain charities – in some cases, thepolicyholder can select the charity of their choosing. Another way is by investing a portion of
the premium in investments that consider sustainability aspects. Another practice observed is
a commitment by the insurer to plant a tree for every new non-life policy subscribed. Yetanother practice observed is an insurer offering its policyholders with electric vehicles thepossibility to earn money by selling their carbon credits.
EIOPA also observed non-life products that provide rewards to consumers when they adopt
sustainable behaviours – these include both consumer risk reduction behaviours as well as
behaviour that positively impacts the environment and/or society. These rewards can bepremium reductions as well as other types of reward such as receiving free health-tracking
watches. Examples of such products are outlined below:•

A property insurance that offers premium discounts for policyholders who implement
energy-efficient home upgrades.

•

A property insurance that offers higher indemnity to rebuild the house with moresustainable materials.

•

Health insurance that offers medication to stop smoking for free to consumers.

•





Motor insurance that incorporates telematics to charge lower premiums to consumers
that drive less.
Other products indicate that they take measures to benefit the environment in their claims
handling processes. For example, a motor insurance product which uses second-hand parts
when fixing cars.
Finally, some insurance products insure green assets, for example products that insure ataxonomy-aligned, energy-efficient residential building. Other examples are insurance productsthat cover electric vehicles or wind farms.

35 “Compendium of market practices” report of the Platform on sustainable finance - Link; AAE discussion paper “Sustainable Products

in insurance” – Link

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At this stage, EIOPA does not provide a view as to whether these products should be considered ashaving sustainability features or not, but finds it useful to list current market practices.
Considerations may be made in the future as to whether some or all these product types should beconsidered as having sustainability features. While more analysis is need, the potential
categorisation of the sustainability features of non-life products could be implemented by settingout a product categorisation in a dedicated legal text. It may also be done in relation to the“sustainability-related objectives” set out under the POG DR.

7.1.1.2. Potential product-level disclosure
While further analysis should be carried out, EIOPA is of the view that there may be merit indeveloping jointly product categorisation and product disclosure. Therefore, provided that a simple
and clear but rigorous product categorisation is defined, EIOPA believes that products fitting into
the categories should be able to claim in disclosure or marketing material (e.g., advertisements,
product name) that they have sustainability features. It follows that those that do not fit in the
categories should not be able to claim in any disclosure or marketing material that they havesustainability features.
EIOPA does not currently see the need for a dedicated pre-contractual document giving consumers
information on the sustainability features of non-life products. Such an approach could put adisproportionate burden on the industry and further increase the amount of pre-contractual
documentation that consumers currently receive.
However, EIOPA sees merit in requiring that products show their sustainability features in theexisting Insurance Product Information Document (IPID), which has been, since 2017, the primary
standardized consumer-facing pre-contractual disclosure document for non-life products in the EU.
This could be done via the inclusion of a specific sustainability section in the IPID which would
inform consumers in a concise and understandable manner about the sustainability features of the
non-life product (see Figure 8). To ensure the appropriateness of this section, it is important todefine what information should be disclosed in it. Any change to the IPID should be behaviourally
informed to ensure it remains succinct and easy to understand (e.g., by way of consumer testing as
set down already in Article 20 IDD).
Given the succinct nature of the IPID, EIOPA would expect the new sustainability section to be shortand clear. While the focus should be on understandability in the IPID, there may also be need for
granular substantiation of the categorisation of the product as having sustainability features
outside. Again, EIOPA does not currently believe it to be necessary to have a dedicated sustainability
disclosure document, however, to ensure appropriate substantiation, it could be envisaged to clarify(in line with POG DR) that upon request by the CA or the consumer, the insurer should makePage 46/54

ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Reportavailable the relevant documentation substantiating the categorisation of the product as having
sustainability features.
The inclusion of a new sustainability section in the IPID would require the amendment of Article
20(8) of IDD, as well as Commission Implementing Regulation (EU) 2017/1469 on the IPID.
Figure 8 – Potential new sustainability features section in the IPID

Source: EIOPA’s own elaboration

7.1.1.3. Other considerations
Should a new approach to categorize and disclose the sustainability features of non-life products be
developed, EIOPA believes that efforts should be made to ensure that this disclosure reduces

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information asymmetry for consumers, but also mitigates compliance burden for insurers and limit
market disruptions. To that extent, there should be an evaluation as to how existing non-life
products should be treated.

7.1.2. Pros and cons of the implementation of a potential approach for non-life productswith sustainability features
Below are presented the pros and cons of the implementation of a potential approach for non-life
products with sustainability features. Should the ideas and approaches outlined in the section above
be further developed, a comprehensive impact assessment should be carried out.
Consumers: There would be a lower risk of consumers being greenwashed given that there
would be standards for non-life products with sustainability features. Moreover, consumers
would be able to make more informed choices with standardized sustainability information on
non-life products – specifically through the IPID. However, the IPID disclosure would be longer,
as there would be an additional sustainability section.
NCAs: NCAs would have a set of rules as to what is and what is not a non-life product withsustainability features. They would have access to information and documentation
substantiating the categorisation of the product as having sustainability features. However,these would be additional requirements that NCAs would need to supervise.
Insurers: Insurers would be able to claim that their products meeting the sustainability
standards have sustainability features both in marketing material as well as in the IPID. However,this would entail higher compliance costs for their products with sustainability features.

Proposal 6 – Closing the gap related to non-life insurance products with sustainability features

A potential gap in the sustainable finance regulatory framework has been identified aroundnon-life insurance products with sustainability features. EIOPA may make further considerations
in relation to non-life insurance products with sustainability features.

7.2. INSURANCE DISTRIBUTION DIRECTIVE (IDD)
Proposal 7 – Consumer-centric sustainability preferences

The consumer testing carried out in the context of the ESAs Final Report on the draft RTS on thereview of PAI and financial product disclosures in the SFDR Delegated Regulation36 shows thatmost consumers do not understand, due to their complexity, what ‘taxonomy-aligned
investments’, ‘sustainable investments’ and ‘consideration of principal adverse impact on

36 Final Report on draft Regulatory Technical Standards on the review of PAI and financial product disclosures in the SFDR DelegatedRegulation - Link

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final Reportsustainability factors’ are, i.e., the three IDD sustainability preferences criteria. The lack ofconsumer understanding of these criteria increases the risk of greenwashing and misselling. The
IDD sustainability preferences criteria were developed based on existing SFDR principles andconcepts. Consequently, should the European Commission review SFDR, particularly inalignment with the Joint ESAs Opinion on SFDR, the IDD sustainability preferences criteria
should also be reassessed. In reviewing the IDD sustainability preferences criteria, EIOPA asksthat the European Commission take a consumer-centric approach, for example by consumer
testing these criteria, to ensure a high level of understanding of these criteria by all types ofconsumers, including more vulnerable consumers.
Another issue identified in the IDD is the unclear link between ‘sustainability-related objectives’in product manufacturing (POG DR) and ‘sustainability preferences’ in the advice process (IDD
suitability assessment DR). While EIOPA partially sought to address the link between‘sustainability-related objectives’ and ‘sustainability-related preferences’ in the published Q&A
247937, there may be merit either in aligning the terminology or making the link clearer between
the two concepts.

7.3. SUSTAINABLE FINANCE DISCLOSURE REGULATION (SFDR)
Proposal 8 – A sustainability-related investment framework that works for insurance and pension
consumers and providers


EIOPA’s Progress Report highlighted various issues related to the SFDR, such as unclarities
around the definition of sustainable investments under Article 2(17) SFDR, broadness of the“promotion of environment or social characteristics” under Article 8, SFDR’s use as a labelling
regime, as well as issues around MOPs’ treatment in the SFDR. Against that background, andgiven the cross-sectoral competence of SFDR, the ESAs are preparing a Joint ESAs Opinion on
SFDR, which is due to be published soon.
Therefore, EIOPA recommends the European Commission to consider the proposals included inthat Opinion, especially in the context of its assessment of SFDR.

7.4. IORP II DIRECTIVE
Proposal 9 – Enhancing sustainable finance and mitigating greenwashing in the occupational
pensions sector

37 Q&A 2479

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ADVICE TO THE EUROPEAN COMMISSION ON GREENWASHING RISKS AND THE SUPERVISION OF
SUSTAINABLE FINANCE POLICIES – Final ReportIn September 2023, EIOPA published its Technical advice to the European Commission on thereview of the IORP II Directive38, which covered various sustainability aspects (e.g., inclusion ofsustainability aspects in the PBS, integration of sustainability aspects in IORPs investment
decisions).
EIOPA recommends the European Commission to consider that advice and more particularly
the section related to sustainability aspects, as they will contribute to the tackling ofgreenwashing in the occupational pensions sector.

38 EIOPA’s technical advice for the review of the IORP II Directive – Link

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8. ANNEX

8.1. ACRONYMS AND ABBREVIATIONSACPR Autorité de contrôle prudentiel et de résolution.
AFM Autoriteit Financiële Markten
CBI Central Bank of Ireland
CFA Call for Advice
CfE Call for Evidence
CO2 carbon dioxide
DB defined benefit
DC defined contribution
DFSA Danish Financial Supervisory Authority
DR Delegated Regulation
EC European Commission
EEA European Economic Area
EIOPA European Insurance and Occupational Pensions Authority
ESAP European single access point
ESAs European Supervisory Authorities
FMPs financial markets participants
FI-SE Swedish Finansinspektionen
GHG Greenhouse gas
IBIPs insurance-based investment products
IDD Insurance Distribution Directive
IORP institution for occupational retirement provision
MFSA Malta Financial Services Authority
MOP multi-option product
MS

Member States

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NCAs National Competent Authorities
PAI principal adverse impacts
POG product oversight and governancePP with profit participation products
PRIIPS packaged retail and insurance-based investment products
SFDR Sustainable finance disclosure regulation
SI

Sustainable Investments under Article 2(17) of the SFDRSII Solvency II Directive
TR Taxonomy Regulation
UL unit-linked insurance
UN PRI United Nation Principles for Responsible Investment
UN SDGs

United Nations Sustainable Development Goals

8.2. STAKEHOLDER INTERACTION
In order to inform this Final Report and the Progress report, EIOPA interacted with various
stakeholders via structured interviews from June 2022 until December 2023. These interviews
focused on what greenwashing is, how greenwashing occurs, its impact, and the regulatory
framework around it. The stakeholders with which EIOPA held structured interviews were thefollowing: 2° Investing Initiative, BVI Bundesverband Investment und Asset Management e.V.,
Better Finance, Zurich Insurance Group, France Assureurs, United Nations Development Programme
Sustainable Investment Forum, International Monetary Fund, Allianz, Carbon Disclosure Project,
AXA, Gesamtverband der Deutschen Versicherungswirtschaft, Credit Agricole and the UK Financial
Conduct Authority.

8.3. ESAS UNDERSTANDING OF GREENWASHING
In addition to the summary statement, the ESAs have identified several core characteristics that
help understand the potential scope of greenwashing:
A. Similarly to communication of other misleading claims there are several ways in whichsustainability-related statements, declarations or communications may be misleading. On the
one hand, communications can be misleading due to the omission of information relevant to
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B.

C.

D.

E.

F.

G.

H.

partial, selective, unclear, unintelligible, vague, oversimplistic, ambiguous or untimely
information, unsubstantiated statements). On the other hand, communications can bemisleading due to the actual provision of information, that is false, deceives or is likely to
deceive consumers, investors or other market participants (including but not limited tomislabelling, misclassification, mis-targeted marketing, inconsistent information);
Similarly to other misleading actions, greenwashing is a type of misconduct which may not only
result in a direct claim, but in misleading actions or omissions. Potential examples include
identifying clients with sustainability preferences within the positive target market of a productthat does not have any sustainability features (in the product design phase) or not taking duly
into account clients’ sustainability preferences in the advice phase.
Sustainability-related misleading claims can occur and spread intentionally or unintentionally,
whereby intentionality, negligence, or the lack of robustness and appropriateness of due
diligence efforts could, where relevant, constitute aggravating factors in the context ofsupervisory and enforcement actions.
Greenwashing can occur either at entity level (e.g., in relation to an entity’s sustainability
strategy or performance), at financial product level (e.g., in relation to products’ sustainability
strategy or performance) or at financial service level including advice39 (e.g., in relation to theintegration of sustainability-related preferences to the provision of financial advice).
Greenwashing can occur at any point where sustainability-related statements, declarations,actions or communications are made, including at different stages of the business cycle offinancial products or services (e.g., manufacturing, delivery, marketing, sales, monitoring) or of
the sustainable finance value chain.
Greenwashing may occur in relation to the application of specific disclosures required by theEU sustainable finance regulatory framework or in relation to general principles – as featured
either in the general EU financial legislation or more specifically in EU Sustainable Financelegislation. In addition, greenwashing may occur in relation to entities that are outside of theremit of the EU sustainable finance legislation as it currently stands.
Greenwashing can be triggered by the entity to which the sustainability communications relate,by the entity responsible for the product, by the entity providing advice or information on the
product, or it can be triggered by third parties (e.g., ESG rating providers, or third-party
verifiers);
Greenwashing may or may not result in immediate damage to individual consumers or investors(in particular through mis-selling40) or the gain of an unfair competitive advantage. Regardlessof such outcomes, if not kept in check, greenwashing undermines trust in sustainable financemarkets and policies.

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EIOPA
Westhafen Tower, Westhafenplatz 1
60327 Frankfurt – Germany
Tel. + 49 69-951119-20
info@eiopa.europa.eu
https://www.eiopa.europa.eu

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