The Insurance Distribution Directive (IDD) has been amended through the Commission Delegated Regulation (EU) 2021/1257 of 21 April 2021 by incorporating the sustainability preferences of the customers or potential customers in the suitability assessment. Accordingly, as of 2 August 2022 the insurance undertakings and insurance intermediaries must consider the individual customer decisions on whether or to what extent ESG aspects or sustainability factors should be taken into consideration in the investment options of the insurance investment products.
Definitions of the concepts used in the questionnaire
Investments in one or more economic activities that should lead to positive sustainability impacts in the world. Mandatory conditions: (i) the economic activity must contribute to a measurable environmental or social objective; (ii) the economic activity does not significant harm any other environmental or social objective; (iii) good governance practices must be followed.
Environmentally sustainable investments
Investments in - at least - one economic activity that is considered environmentally sustainable according to the European Sustainability Taxonomy and its implementing regulations. This regulatory framework sets out the criteria for what qualifies as environmentally sustainable.
Principal Adverse Impacts (PAI)
PAI stands for Principal Adverse Impacts on sustainability. They are the negative impacts caused by an economic activity related to all areas of the three ESG dimensions - environmental, biodiversity and governance - such as greenhouse gas emissions, carbon footprint, exposure to fossil fuels... To achieve a positive impact in the world, the PAIs must be reduced.
The questionnaire below helps to identify and address the sustainability preferences of the customers or potential customers.