This leadership role to face major shift with rise of sustainability initiatives

Preserving our planet is now a top global priority, with companies taking active steps to contribute. The Deloitte Re/Insurance CSRD benchmark study shows that the role of Chief Financial Officer (CFO) is undergoing a significant shift due to sustainability initiatives. With the EU Corporate Sustainability Reporting Directive (CSRD) coming into play, CFOs are expected to handle more non-financial data alongside financial data.

According to the study, a majority of insurers have designated the CFO as primarily responsible for CSRD compliance, either alone (53%) or with the Chief Sustainability Officer (CSO) (23%). These insurers have formed core teams of up to ten full-time employees, supported by up to 20 external staff, integrated into larger cross-functional teams of 8-40 individuals.

The EU directive sets a higher standard compared to previous regulations, with companies required to report sustainability statements for the financial year 2024, starting in 2025. Despite this, a year after the CSRD's implementation, the insurance sector shows only moderate readiness, with most companies still in the assessment phase.

The second phase, focusing on KPI and disclosure design, is the least progressed, with only a third of companies starting a disclosure mock-up and none completing it. Consequently, none of the companies have moved to the implementation stage yet.

While many insurers are currently prioritising tactical solutions for the initial reporting year, the study suggests a shift towards a more strategic approach as they gain experience. This involves integrating sustainability into broader business and reporting models.

The study also highlights anticipated material topics under the European Sustainability Reporting Standards, ranging from three to eight topics per insurer. These include climate change, the workforce, consumers, business conduct, and biodiversity and ecosystems, with environmental disclosures requiring the most effort.

Conducted in early 2024, the study gathered data from the 16 largest insurers and reinsurers worldwide, both within and outside the EU.