Feedback reference
F12292
Submitted by
Marie VIAL
User type
Non-governmental organisation (NGO)
Organisation
BETTER FINANCE
Organisation size
Micro (1 to 9 employees)
Transparency register number
Country of origin
Belgium

BETTER FINANCE welcomes this opportunity to comment on the proposal amending Delegated Regulation (EU) 2017/2359 to include the customer’s ESG preferences in the criteria and practical details to be taken into account by insurance intermediaries and insurance undertakings when assessing the suitability of insurance-based investment products for their customers.
Investment firms shall act in accordance with the best interest of their clients and as such, when providing investment advice and portfolio management, they must disclose information on the ESG of each financial product offered to the client before providing investment services.
The asset managers must explain to the client how his or her ESG preferences for each financial instrument is taken into consideration during the advisory and product suitability process.
BETTER FINANCE fully supports this proposal to include ESG considerations during the advisory and product suitability process. However, we have some concerns regarding the proposal.
Firstly, and as raised at several occasions by BETTER FINANCE ( BETTER FINANCE’s press release “ BETTER FINANCE welcomes EC roadmap towards a more sustainable economy but once again deplores failure to take the interests of EU citizens as pension savers and individual investors into account” http://betterfinance.eu/fileadmin/user_upload/documents/Press_Releases/e...; BETTER FINANCE’s press release “BETTER FINANCE welcomes the Sustainable Finance Action Plan but warns the Commission against its plans regarding taxonomy, benchmarking and an eco-label” http://betterfinance.eu/fileadmin/user_upload/documents/Press_Releases/e...) , before requesting institutional investors and assets managers to include ESG’s client’s preferences in the advisory and product suitability process, we must have an internationally agreed taxonomy in order to determine, for instance, what is “green and what is not”.
The Commission has chosen to follow a sequencing approach by first focusing on climate only. However, the proposed amendment to the IDD delegated regulation includes the three components: “E”, “S” and “G”.
Secondly, we believe that the Commission should make a clearer reference between the proposed Regulation on disclosures relating to sustainable investments and suitability risks (Proposal COM (2018) 354) 354 and the advisory and product suitability process.
Thirdly, we warn the Commission that the inclusion of ESG considerations/ preferences should not lead providers to comply with the delegated regulation just by constructing funds corresponding to the client ESG preferences without addressing ESG consideration for the rest of the portfolio.

The views and opinions expressed here are entirely those of the author(s) and do not reflect the official opinion of the European Commission. The Commission cannot guarantee the accuracy of the information contained in them. Neither the Commission, nor any person acting on the Commission’s behalf, may be held responsible for the content or the information posted here. Views and opinions that violate the Commission’s feedback rules will be removed from the site.