Ooni Koda
  1. Home
  2. /
  3. Newsfeed
  4. /
  5. Deloitte study: sustainability will drive a massive shift...

Deloitte study: sustainability will drive a massive shift of the CFO function, which will likely manage more non-financial data than financial data in the coming years

May 27, 2024

Sustainability is expected to drive a massive shift for the Chief Financial Officer (CFO) function, which will likely manage more non-financial than financial data in the coming years, as the EU Corporate Sustainability Reporting Directive (CSRD) imposes new reporting requirements for which CFOs are generally appointed responsible, according to the Deloitte “Re/Insurance CSRD benchmark” study, conducted among life, non-life and composite insurers subject to CSRD. According to the study, 76% of the insurers that have defined their CSRD governance have assigned the accountability mainly to the CFO - 53% - or jointly to the CFO and the Chief Sustainability Officer (CSO) - 23%.
Most of the insurers which participated to the study have established a central team of up to ten full-time employees, supplemented by up to 20 external employees, integrated within a larger, cross-functional team of 8-40 people. For all non-EU headquartered entities, group is involved in local CSRD implementation, the study shows.
The new EU directive is significantly more comprehensive in its scope, level of detail and assurance requirements than any other regulations, the study explains, and the first companies that are subject to it will report a sustainability statement in 2025 for the financial year 2024. One year since the CSRD entered into force, in January 2023, the insurance industry shows a low-to-medium level of readiness on average. Most of insurers analyzed by the study are still in the assessment phase, as 44% have completed the double materiality assessment (DMA), an evaluation of what they need to report according to the directive scope, and only 25% have completed a gap analysis to identify what they need to do or to prepare in order to comply with the European Sustainability Reporting Standards (ESRS). This stage can be explained by the fact that players in the industry have prioritized the implementation of the new IFRS 17 accounting rules, according to the study. Among the analyzed companies, those head-quartered in Germany are the most mature in their CSRD journey, whereas those with non-EU headquarters were much further behind.
“Almost 20% of the insurers analyzed by the study haven’t even appointed a function accountable for the CSRD reporting, which shows that some of the players are still trying to understand the new requirements. On the other hand, the results highlight that 63% of them have started to engage with their external auditor, in an attempt to align both sides' expectations on the auditor’s work and on the CSRD report applicable for the financial year 2024,” said Claudiu Ghiurluc, Audit and Assurance Partner, Deloitte Romania, and Leader of the Insurance Industry.
The second phase, that comes after the assessment, KPI and disclosure design, is the least well progressed, according to the study. Only a third of the companies have started a disclosure mock-up and none of them has completed it yet. Subsequently, none of the analyzed companies has reached the third and final stage, implementation.
Most of the insurance companies that are in the first wave of reporters are actively implementing tactical solutions for the first year of reporting. This indicates a compliance-led approach. But, as insurers and reinsurers will gain more experience and understanding, their approach will become more strategic, integrating sustainability into their wider business and reporting operating model, according to the study.
“In what concerns Romania, the Corporate Sustainability Reporting Directive has been transposed into the local legislation through Order 85/2024 issued by the Ministry of Finance, and the Financial Supervisory Authority has already published a draft norm for the insurance undertakings. Our interactions with the insurers active on the local market show that the study findings are valid in Romania, too, and it is obvious that the current stage can be described as an exploration phase, in which the players in the field are getting acquainted to the new reporting standards on sustainability as a response to the need to comply with them, and in which the efforts are mainly led by the group’s mother-company. However, CSRD can be more than a new reporting requirement, it can be a first step in a transformation towards a business model that embeds sustainability,” said Ana Serban, Director Assurance Services, Deloitte Romania.
Among the topics that are envisaged by the European Sustainability Reporting Standards, which include cross-cutting standards, environment, social and governance disclosures, the analyzed insurers deem a range of three to eight topics as material, with a median of five. Climate change, own workforce, consumers and end-users, business conduct and biodiversity and ecosystem are among the ones considered most important. The environmental disclosures require overall the highest effort, followed by social disclosures, the study also shows.
The Deloitte “Re/Insurance CSRD benchmark” study was conducted based on data gathered at the beginning of 2024 from 16 largest insurers and reinsurers, headquartered both in EU and non-EU countries.

The information provided by KomuniK

Read in full - click here
Head of Romanian Orthodox Church highlights “united voice of Christians” in message to pope Leo XIV

The Patriarch of the Romanian Orthodox Church, Daniel, congratulated Pope Leo XIV for succeeding Pope Francis on Thursday, May 8. He expressed confidence that the new pope will continue to promote "the spirit of dialogue, peace, and cooperation between the Roman Catholic Church and the Orthodox Church." "In a world facing multiple spiritual, economic, and […]

Organizers of Romania’s Untold festival offer RON 150 voucher for voters

The organizers of the Untold festival announced they will offer a RON 150 (EUR 30) voucher toward the purchase of a festival pass to anyone who votes on May 18, during the second round of the presidential elections. In an online message, Untold representatives emphasized the connection between civic participation and the future of every […]

Bucharest's Open Streets program brings vintage cars, shows, lights festival this weekend

The Open Streets program, which sees the city's major arteries close for car traffic and become pedestrian areas, returns this weekend with a program of exhibitions, concerts, and a Festival of Lights. On Saturday, May 10, at 2:00 p.m., the public is invited to the Made in Romania exhibition, which presents a selection of civilian […]

Stimulating exports eases deficits, Nobel-awarded economist Joseph Stiglitz says at event in Romania

Joseph Stiglitz, the famous economist and professor at Columbia University in New York, and winner of the Nobel Prize in economy in 2001, told an audience in Cluj, Romania, that governments must stimulate exports and key sectors when facing deficits.  Stiglitz was in Romania on Thursday, May 8, to receive the title of Doctor Honoris […]

Romania's Constitutional Court validates results of presidential elections' first round

The Constitutional Court unanimously validated on Friday, May 9, the results of the first round of the presidential elections.  It also rejected as unfounded a request to annul the elections filed by Sebastian-Constantin Popescu, the presidential candidate of the New Romania Party, it announced. The runoff, set for May 18, will see ultranationalist leader George […]

Olea - Middle’terranean breeze seasonality reopens with an elevated dining experience

Bucharest's culinary scene welcomes back OLEA, the JW Marriott Bucharest Grand Hotel's celebrated Mediterranean destination, now reimagined with a fresh concept that blends authentic coastal flavours with contemporary sophistication. Following an extensive transformation, OLEA reopens its doors to offer guests a refined journey through the Mediterranean's sun-drenched culinary traditions, right in the heart of Romania's […]