Financial authorities denounce life insurance greenwashing

In its 2021 annual report, the Pôle Commun Assurance Banque Epargne of the Autorité de Contrôle Prudentiel et de Résolution (ACPR) and the Autorité des Marchés Financiers (AMF) points the finger at greenwashing in the life insurance sector.

Using sustainable development to sell life insurance more effectively

According to Grégoire Vuarlot, the ACPR's director of commercial practices control, life insurance is affected by the practice of greenwashing, which consists in highlighting the sustainable and ecological nature of a product that is not actually as environmentally friendly as it claims to be.

" In too many cases, life insurances overuse the idea of sustainable development to sell themselves without justification," he stressed at the presentation of the 2021 annual activity report of the joint ACPR and AMF division.

The financial authorities are looking to tighten up the marketing of sustainable finance in order to combat greenwashing. They are currently working on a draft recommendation to " limit or even prohibit this type of communication ".

Tighter control by ACPR and AMF

In practice, however, the fight against greenwashing is far from straightforward. The sustainability of a life insurance product is judged not only in terms of the contract itself, but also in terms of the assets underlying the savings product, in particular the units of account.

A survey carried out in 2021 by the ACPR confirmed " an increase in the weight of sustainable unit-linked products in inflows ", as well as " the absence of a specific marketing policy for these products ".

Several avenues are being explored to provide a better framework for communication. For example, insurers may have to stop using very general messages, which are a source of confusion for customers.

This determination to combat greenwashing is not unique to the French financial authorities. On a global scale, financial authorities are tightening their controls as the temptation for financial players to misuse sustainability and ecology for marketing purposes grows.

In Germany, the head of DWS, Deutsche Bank's asset management subsidiary, was forced to resign for possibly overvaluing its sustainable investments. In the UK, HSBC Bank has been accused of greenwashing by the Advertising Standards Authority.

US bank Goldman Sachs is under investigation by the Securities and Exchange Commission (SEC) for its ESG investment funds, which are supposed to respect environmental, social and governance criteria.