SFDR, TNFD and the Data You Don’t Have: A Practical Gap Analysis for Insurers

Brussels is currently working through proposals to simplify parts of the EU’s sustainability reporting regime. That should be good news for insurers already stretched thin on compliance capacity.

But simplification at the regulation level doesn’t fix the underlying problem: insurers still need decision-ready data on the private companies they underwrite, reinsure or invest in, and most of that data doesn’t exist in a form anyone can actually use.

The gap between what SFDR and TNFD ask for and what portfolio teams can realistically source is where the real risk sits.

Where frameworks outpace portfolio data

SFDR’s Principal Adverse Impact indicators require insurers to report on emissions, biodiversity exposure, water use and social factors across investee and insured companies. TNFD, built on the same four-pillar structure as TCFD, pushes further into nature-related dependencies and impacts through its LEAP approach, locate, evaluate, assess, prepare.

Both frameworks assume a baseline of comparable, company-level data. For large listed firms, that baseline often exists. For the mid-market companies that sit inside most insurance and reinsurance portfolios, it typically doesn’t.

Common Mid-Market Data Gaps

Portfolio teams routinely run into the following structural blind spots:

• Nature & biodiversity:
  Dependency data is rarely disclosed below the enterprise level.
• Resource usage:
  Water usage and intensity metrics are often absent entirely for private companies.
• Governance oversight:
  Board-level oversight of climate and nature risk is inconsistently documented.
• Granular emissions:
  Emissions data broken down by scope is frequently missing or unverifiable.
• Supply chain exposure:
  Physical and transition risk across extended supply chains is almost never quantified.

Rethinking the Mid-Market Data Shortfall

A structuring problem, not a willingness problem

It’s tempting to read these gaps as companies choosing not to disclose. That’s rarely accurate.

Mid-market companies routinely publish sustainability-relevant information — on websites, in policy documents, through certifications and reports. What’s missing isn’t the information itself. It’s structure, consistency and comparability across a portfolio.

“That distinction matters. A willingness problem needs engagement. A structuring problem needs a methodology.”

Closing the gap with public disclosure analysis

This is exactly what public disclosure analysis was built to address. By scoring companies against a consistent 120-metric framework, aligned to SASB and weighted by materiality across 11 sectors and 77 industries, it turns scattered public disclosures into structured, benchmarkable data.

Critically, that structure maps onto the categories SFDR and TNFD already ask about — emissions, governance oversight, resource use, supply chain exposure — without requiring a single survey to be sent.

What this means for insurers

Regulatory simplification may ease reporting burden at the margins. It won’t manufacture data that doesn’t currently exist in usable form. Closing that gap is a data and methodology question, not a compliance-calendar one.