Sustainability claims refer to statements or representations about a product's or entity's sustainability profile, conveyed through text, visuals, or other media. These claims can be made across all stages of the insurance and pensions lifecycle, including business models, product manufacturing, and marketing. They include regulatory disclosures (e.g., SFDR, Taxonomy Regulation), marketing materials, policies, ratings, and product names, which significantly influence consumer decisions. EU legislation mandates that sustainability- related information be clear, fair, and not misleading, as outlined in SFDR, IDD, and IORP II. Misleading claims such as selective disclosure, vagueness, or falsehoods can contribute to greenwashing. Despite an evolving regulatory framework, fairness principles guide authorities in identifying and addressing misleading sustainability claims in insurance and pensions.
The Need for Accurate Sustainability Claims (Principle 1 and 2)
Accurate sustainability claims should be precise, fair, and aligned with a provider’s business model and product features. Claims must avoid overstatements or omissions that could mislead consumers. Providers should ensure sustainability commitments reflect actual investment and underwriting strategies. Sustainability considerations should be integrated into corporate decision-making, risk management, and governance. Products must align with target market sustainability objectives, and distributors should have relevant expertise. Claims should remain up to date, with changes clearly communicated. Sustainability-related product names must be specific and substantiated. Misleading claims risk greenwashing and regulatory breaches under EU legislation.
The Need for Substantiated Sustainability Claims (Principles 3) and Accessible Sustainability Claims (Principle 4)
Sustainability claims must be substantiated with clear reasoning, facts, and due diligence. Providers should ensure claims are accurate, verifiable, and supported by credible plans, especially for long-term goals like net-zero commitments. ESG ratings should be explained for relevance. Manufacturers must align product sustainability features with target market expectations through research and testing. Claims must also be accessible, using clear language, consumer-friendly platforms, and structured documentation. Distributors should ensure consumers understand sustainability preferences and product features, providing transparent and timely disclosures for informed decision-making.
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