The Green Industry Act (Law No. 2023-973 of 23/10/2023), adopted in France to support low-carbon reindustrialisation, introduces new obligations for insurance distributors, including those based in Luxembourg. Whenever a client is a French tax resident, the Luxembourg distributor falls within the scope of French regulation, under the supervision of the Prudential Control and Resolution Authority (ACPR).

An ACPR competency

It applies as soon as a client is a tax resident in France, regardless of where the distributor is based. This means that Luxembourg brokers must incorporate the requirements of the Green Industry Act into their advisory practices, documentation, and product offering.

Enhanced ESG advisory duty

The law requires an adaptation of the advisory duty to incorporate the sustainability preferences of clients who are tax residents in France. This includes :

• Presenting the provisions of the Green Industry Act prior to subscription
• Collecting ESG (sustainability) information, including labelled sustainability preferences, as well as the client’s family, professional and financial situation; investment and performance objectives; risk appetite and loss-bearing capacity; and financial knowledge and experience.
• Enhanced traceability: storing records on a durable medium (with automated tools recommended), providing written justification of the advice given, and updating the information in the event of any significant change.

The data collection framework is specified in Annex 1 of ACPR Recommendation 2024-R-03.

Long-term advice: an ongoing responsibility.

Long-term advice: an ongoing responsibility.

• Every two years for contracts with personalized advice (IBIPs).

• Every for years for others
• At each significant event in the client’s life (changes in family, professional, or financial situation, or in investment objectives).

This requirement entails a structured client monitoring system, with tools to detect changes, prompt updates, and document every step of the advisory process.

KEY DEADLINES TO ANTICIPATE

Three key dates structure the implementation:

• December 31, 2025: effective date for new subscriptions.
• October 23, 2026: remediation of the existing portfolio for IBIPs and personalized advice.

• October 23, 2028: remediation of all other contracts (entire portfolio).

A PRODUCT OFFERING TO ADAPT

The law requires an adaptation of the advisory duty to incorporate the sustainability preferences of clients who are tax residents in France. Indeed, since January 1, 2024, every life insurance contract must offer at least one labelled unit-linked fund (examples: SRI, Greenfin). What about foreign insurers operating under LPS in France?

If the client expresses a confirmed interest and no ‘Green Industry’ labelled product is available in the existing contract, it is necessary to adequately address the client’s needs and requirements outside of the current situation.

WHAT ABOUT NON-LIFE INSURANCE CONTRACTS?

The ACPR recommendation specifies that the ESG advisory duty also applies to non-life insurance contracts (auto, home, health, etc.). This includes taking into account clients’ sustainability preferences, as well as exercising particular care to avoid overlapping coverage or double insurance situations.

SFDR VS GREEN INDUSTRY/ TWO FRAMEWORKS TO ALIGN

The European Sustainable Finance Disclosure Regulation (SFDR) requires transparency on the ESG characteristics of products but does not constitute a label. In contrast, the Green Industry Act follows a prescriptive approach, with labels recognized by the French state. A product may fall under both frameworks, but only the French label ensures compliance with the Green Industry Act.

THE LABELING PROCESS

In France, the ‘Green Industry’ label is obtained through a certification process with an independent specialized organization, such as the AFNOR Group, with mandatory renewal every four years.

SANCTIONS FOR NON-COMPLIANT DISTRIBUTION

Under the French Monetary and Financial Code, Article L612-39, the ACPR may impose:

• Disciplinary sanctions (reprimand, ban from practicing, withdrawal of license).
• Financial penalties of up to €100 million or 10% of annual turnover.

CONCLUSION: A TRANSFORMATION TO ANTICIPATE

For Luxembourg distributors, the Green Industry Act turns ESG advisory into a strategic asset: it imposes higher standards while paving the way for a differentiated offering that can attract clients seeking transparency and sustainable solutions.

Lorenzo STIPULANTE, Flora MILCAN, EY Luxembourg