European insurers back ISSB proposal to scrap insurance-associated emissions reporting

(The Insurer) - Industry body Insurance Europe has welcomed the International Sustainability Standards Board (ISSB)'s proposal to remove insurance-associated emissions (IAEs) from Scope 3 reporting requirements in the absence of developed methodologies.

The ISSB proposed the amendment to the International Financial Reporting Standards’ second climate-related disclosure standard (IFRS S2) in early May.

The exposure draft grants financial institutions relief from measuring and disclosing Scope 3 emissions associated with derivatives, investment banking and (re)insurance underwriting, which fall under the GHG Protocol’s Category 15 of Scope 3 emissions.

The proposed addition of paragraph 29A(a) would permit an entity to limit its disclosure of Category 15 emissions to financed emissions attributed to loans and investments.

This would not prevent an organisation from disclosing IAEs if it chose to do so.

Insurance Europe submitted a response to the consultation on Monday in which it welcomed the ISSB's recognition of the challenges around Scope 3 Category 15 disclosures, particularly in relation to IAEs.

"At present, only a limited number of insurers disclose IAEs, and even fewer have set quantitative targets — typically confined to specific lines of business. While the sector has been proactive in supporting the climate transition, the reporting of IAEs remains in its infancy," said Insurance Europe's response.

"Significant challenges persist, including methodological uncertainty, limited data availability, and proportionality concerns, particularly for smaller entities. These factors justify a cautious and flexible approach."

Insurers also supported the option to use alternatives to the global industry classification standard, arguing that flexibility avoids unnecessary legal and cost burdens, particularly for multinational entities that already use other frameworks.

Insurance Europe added that while this flexibility is key for operational feasibility, the IPCC’s standards should remain the global reference to preserve consistency and comparability.

European insurers also called on the ISSB to implement the proposed amendments swiftly as many (re)insurers have already begun work to align with IFRS S2.