Allianz Risk Barometer 2021 -
Changes in legislation and regulation

“Covid-19 may have caused some delays of the regulation train but it did not stop or even derail it, quite the opposite: 2021 promises to become a very busy year in terms of new legislation and regulation,” says Ludovic Subran, Chief Economist at Allianz.

Two areas stand out for their significant business impact: data and sustainability. Access and use of data determine the competitive landscape in the 21st century and new rules aim at creating a more level playing field. This includes, for example, a new framework for artificial intelligence and cyber security, as well as new standards and rules for digital finance and digital services and platforms.

Meanwhile, in order for a successful transition to a zerocarbon economy to happen integrating sustainability considerations into all business activities is key. To achieve this goal, a certain level of regulation is necessary. In particular, improving the availability, comparability and reliability of reported non-financial data – including climate-related key performance indicators based on greenhouse gas emissions – would help to steer sustainable investments successfully and to facilitate the green transformation.

“True, new sustainability disclosure requirements entail additional costs,” says Subran. “But the rewards are huge, for the companies which better understand their long-term environmental, social and governance (ESG) risks and for the societies at large which can define a clearer path to carbon-neutrality."