Negotiations on the insurance regulation Solvency II have fallen short of delivering the regulatory framework needed to hold insurers accountable for climate risks, with the final text only requiring most EU insurers to develop 'prudential plans and targets' to address risks associated with climate change.

Caroline Metz, senior EU policy officer at ShareAction, commented: "EU policymakers have missed a crucial opportunity to require insurers to break their ties with fossil fuels, the primary driver of climate change.

The Solvency II revision was a golden opportunity to push European insurers to develop robust transition plans with clear emissions reduction targets. However, the compromise, which focuses solely on insurers’ management of transition risks and ignores insurers’ impact, falls well short of what is needed for society and our planet.”

The upcoming trilogue scheduled for early December may yet allow stronger regulation, including effective supervision and transparency in implementing prudential plans.

---