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Sustainable old-age provision lacks investment opportunities

D.he commitment of German insurers to structure their investments according to sustainability criteria is unmistakable. But the project is not easy to implement. It starts with the uncertainty about the future EU regulation on ESG investments, goes on to the specific design of the capital investment up to the documentation of one’s own commitment to the authorities. The industry is clearly committed to climate protection, social investments and investments only in well-run companies and countries. But there are doubts as to whether there are enough bonds, stocks and direct investments to equip all pension providers and non-life insurers with investments that meet the still vague ideas of ESG investments (ecological, social, governance).

“There are not enough sustainable investments in the world to fill the cover pools of German insurers,” says Guido Bader, CEO of the Stuttgart-based company. According to Statista data, sustainable investments are currently in the low three-digit billion euro range. German insurers have currently invested around 1.5 trillion euros. In addition, Bader fears the amount of data that the EU Commission is likely to require once the complex regulation is in place. “The information should be understandable for customers and the costs shouldn’t be too high,” says his colleague on the board, Ralf Berndt. “If we have to consult rating agencies, it will be too expensive.”

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