Recommendation 2022-R-02 of December 14, 2022, on promoting extra-financial characteristics in life insurance advertising communications

Recommendation 2022-R-02 of December 14, 2022 on the promotion of extra-financial characteristics in life insurance advertising communications

1. Context
   Life insurance advertising communications are increasingly highlighting the extra-financial characteristics1 of the promoted contracts or funds, as well as the actions of the professionals marketing them. The analysis of these advertisements, which have seen a sharp increase in recent years, has identified certain practices that may mislead clients regarding the reality of the alleged extra-financial characteristics or commitments. The ACPR observes in particular a risk of client exposure to practices known as "greenwashing," which violate the obligation to provide clients with clear, accurate, and non-misleading information enabling them to understand the actual composition of products and assess the extra-financial approach actually adopted. This subject has been the subject of exchanges within the joint pole between the ACPR and the Autorité des marchés financiers (AMF), which clarified its doctrine on the information to be provided by collective investment schemes integrating extra-financial approaches in the Position – Recommendation DOC-2020-03 modified on January 27, 2022.

2. Scope of the recommendation
   This recommendation complements the best practices set out in Recommendation ACPR 2019-R-01 of December 6, 2019, on the advertising communications of life insurance contracts.

2.1. Communications concerned
The following advertising communications2 are covered:

• extra-financial characteristics of a life insurance contract3 or capitalization contract (hereinafter "the contract(s)") or the funds4 it offers;
• extra-financial characteristics of life insurance5 or capitalization, without reference to a specific contract or fund;
• the commitment or scope of actions carried out by the persons concerned6 on sustainability factors within the meaning of Article 2 point 24 of European Regulation (EU) 2019/2088, known as "SFDR"7.

2.2. Persons concerned
This recommendation applies to the persons referred to in I and II of Article L. 612-2 of the Monetary and Financial Code, including when they exercise their activity in France under the freedom to provide services or freedom of establishment regimes.

2.3. Advertising media concerned
The recommended best practices must be taken into account regardless of the medium and format for the dissemination of the concerned advertising communications.

3. Recommendation
   With the aim of clear, accurate, and non-misleading advertising information when promoting extra-financial characteristics, in accordance with the provisions of Articles L. 612-1, II 3°, and L. 612-29-1, second paragraph, of the Monetary and Financial Code, the ACPR recommends8:

3.1. On general advertising presentation methods
3.1.1. Not to use a commercial name or presentation (hereinafter "arguments"), including wording or visuals, likely to mislead the public regarding:

• the extra-financial approach actually adopted by the contract or funds;
• the scope of the investment in contracts or funds integrating extra-financial characteristics on sustainability factors;
  And to verify that these arguments are based on objective and precise elements.

3.1.2. To provide a direct and easily accessible link to the website page containing the information that must be published in application of the European regulation known as "SFDR"9.

3.2. On advertising communications mentioning the extra-financial characteristics of a unit-linked fund
3.2.1. To ensure the balanced nature of the communication and, where the unit-linked fund is a collective investment scheme subject to the AMF's Position – Recommendation DOC-2020-03, to adopt the corresponding communication levels.

3.2.2. To ensure the clarity of arguments and, where the terminology "socially responsible investment" is used, to specify if necessary that the fund does not benefit from the ISR label.

3.3. On advertising communications mentioning the extra-financial characteristics of a contract
3.3.1. Not to mention extra-financial characteristics specific to the contract when the offer of unit-linked funds presenting such characteristics is limited to compliance with the provisions of Article L. 131-1-2 of the Insurance Code.

3.3.2. Not to give the impression that the entire contract integrates extra-financial characteristics when only certain funds are concerned, and in this case, to clearly state in the main body of the advertising text that the extra-financial nature depends on the selection made.

3.3.3. To clearly insert in the main body of the advertising text a mention specifying the following two pieces of information:

• the minimum proportion of the contract's funds that fall under Article 9 of the European regulation known as "SFDR" or are eligible for central communication within the meaning of the AMF's Position – Recommendation DOC-2020-03;
• the minimum number of the contract's funds that fall under Article 9 of the European regulation known as "SFDR" or are eligible for central communication within the meaning of the AMF's Position – Recommendation DOC-2020-03.

3.4. On advertising communications mentioning an argument regarding the extra-financial characteristics of a management method other than free management
3.4.1. To ensure the balanced nature of the communication regarding the extra-financial characteristics of the collective investments proposed as unit-linked funds within the investment universe, and to mention such characteristics only in one of the following situations:

• at least 80% of them fall under Article 9 of the European regulation known as "SFDR" or are eligible for central communication within the meaning of the AMF's Position – Recommendation DOC-2020-03;
• at least 75% of them fall under Article 9 of the European regulation known as "SFDR" or are eligible for central communication within the meaning of the AMF's Position – Recommendation DOC-2020-03, and the remainder (at most 25%) falls under Article 8 of said regulation.

3.4.2. When a management method other than free management allows investment without restrictions in any business sector, to mention this clearly.

3.5. On general-purpose advertising communications regarding extra-financial characteristics10
3.5.1. Not to use arguments likely to mislead the public regarding:

• the commitment or scope of actions carried out by the persons concerned on sustainability factors;
• the scope of the investment made by the client on sustainability factors;
  And to include in the main body of the advertising text the objective and precise elements on which these arguments are based, at a minimum the main ones.

3.5.2. To provide a direct and easily accessible link to the website page containing the information that must be published in application of the European regulation known as "SFDR"11.

3.5.3. To ensure the clarity of arguments relating to the promoted extra-financial characteristics and, in particular, not to imply that:

• these characteristics concern the entire investment offer of the person concerned if this is not the case;
• the entire investment offer proposed by the person concerned is labeled, if this is not the case, particularly when using the terminology "Socially Responsible Investment."

3.6. On the means and procedures put in place to ensure appropriate internal control
3.6.1. To integrate the "greenwashing" risk into the means and procedures implemented to ensure the control of advertising communications.

This recommendation is effective no later than April 1, 2023, for any advertising communication disseminated from that date.

1 Example of terminologies used: ecological, environmental, ISR/SRI, ESG, responsible, sustainable, green, ethical, social, solidarity, engaged, impact, low carbon, climate, transition, eco, planet… 2 Covered by Articles L. 132-27 of the Insurance Code, L. 223-25-2 of the Mutual Code, and L. 932-23 of the Social Security Code. 3 Including a contract whose benefits are linked to the cessation of professional activity. 4 Within the meaning of the aforementioned Recommendation 2019-R-01. Advertising communications in favor of financial instruments are thus notably concerned, provided these are also promoted as unit-linked funds of life insurance or capitalization contracts. 5 Including supplementary retirement. 6 Cf. point 2.2 of this recommendation. 7 European Regulation 2019/2088 of November 27, 2019, known as "SFDR," on the publication of sustainability information in the financial services sector. 8 The best practices detailed in point 3.1 on general advertising presentation methods apply to all advertising communications highlighting extra-financial characteristics, except those referred to in point 3.5. The recommended best practices in points 3.2 to 3.5 are intended to be implemented alternatively depending on the extra-financial characteristics promoted, whether they relate to a unit-linked fund (3.2), a contract (3.3), a management method other than free management (3.4), or have a general character (3.5). However, they apply simultaneously when an advertising communication highlights extra-financial characteristics falling under several of the aforementioned points. 9 In particular under Article 10. 10 These are communications without reference to a specific contract or fund, or communications on the commitment or scope of actions carried out by the persons concerned on sustainability factors. 11 In particular under Articles 3 and 4.