July 20, 2020 / 12:59 PM / 24 days ago

Europe's insurers call for more 'sustainable' assets to invest in

LONDON (Reuters) - Insurers need more long-term ‘sustainable assets’ to invest in plus clearer rules and more data on sustainability if they are to help to meet the objectives of the European Green Deal, regional trade body Insurance Europe said on Monday.

The group, whose members account for 95% of total European premium income, issued its call in response to a consultation by the European Commission on its sustainable finance strategy, which aims to achieve net-zero greenhouse gas emissions by 2050.

Insurers were increasingly keen to invest in assets that would help Europe to meet its sustainability goals, but there were currently not enough suitable investment opportunities in assets such as infrastructure to meet demand.

“Policy efforts to make sustainability more mainstream will likely be reflected in a higher uptake of sustainable investments,” it said in its response to the consultation.

“However, the main issue will remain the lack of attractive long-term sustainable investments in the real economy and the difficulty in unambiguously defining sustainable finance solutions.”

EU rules to create a common framework to define what constitutes a sustainable investment are due to come into force at the end of 2012.

Among other issues, the insurers said the risk-return profile of many sustainable projects was currently not good enough for insurers and in many cases did not meet regulatory requirements, while many projects were also too small or failed to match their long-term liabilities.

Reporting by Simon Jessop. Editing by Jane Merriman

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