EU Taxonomy

In accordance with the EU Taxonomy (Regulation EU 2020/852), PZU SA provides information on how and to what extent our activities are associated with economic activities that qualify as sustainable. In particular, we disclose what portion of our non-life insurance business is related to climate change adaptation.

Percentage share of non-life insurance business qualifying under the taxonomy<./strong>

	2023	2024
PZU	29.76%	29.63%
PZU Group	31.15%	30.54%

Percentage share of non-life insurance business not qualifying under the taxonomy.

	2023	2024
PZU	70.24%	70.37%
PZU Group	68.85%	69.46%

To determine the percentage of taxonomy-eligible activities and calculate the indicators in a way that ensures full transparency, the PZU Group reviewed all non-life insurance products (Group II) to classify them and identify those that provide coverage for climate-related risks.

Products were considered taxonomy-eligible if they belonged to one of eight business lines and covered at least one of 28 chronic or acute climate risks related to temperature, wind, water, or earth. Products offering all-risk coverage were also deemed eligible.

A similar analytical process was conducted for active reinsurance revenues, focusing on insurance products subject to reinsurance. If a product met the criteria and qualified under the taxonomy, the associated reinsurance revenues were also considered eligible.

Indicators are presented both individually for PZU SA and on a consolidated basis for all PZU Group companies engaged in non-life and other personal insurance: PZU, LINK4, TUW PZUW, TUW Polski Gaz (in liquidation), Lietuvos Draudimas, Lietuvos Draudimas – Estonia Branch, AAS BALTA, and PrJSC IC PZU Ukraine.

Details on the methodology can be found in the Annual Report, in the chapter dedicated to the PZU Group’s taxonomy disclosures.

In accordance with the EU Taxonomy (Regulation EU 2020/852), PZU SA presents information on how and to what extent its investment activities are linked to economic activities that qualify as sustainable.

Within the PZU Group, we report data for the following financial activity segments:

• Insurance segment, which includes insurance undertakings and reinsurance undertakings;
• Banking segment, which includes credit institutions and leasing companies;
• Asset management segment, which includes investment fund companies and a general pension company.

The PZU Group also includes non-financial enterprises (e.g., Pekao Faktoring Sp. z o.o., PZU Zdrowie and its subsidiaries, Armatura Kraków, etc.). However, the total revenues of these enterprises are immaterial from the perspective of the PZU Group.

Indicator for insurance and reinsurance undertakings operating in non-life insurance:

Weighted average value of investments by insurance or reinsurance undertakings supporting taxonomy-aligned activities, relative to the value of assets covered by the key performance indicator, taking into account weights assigned to investments in enterprises:	Based on turnover: %	1,11%
	Based on capital expenditure: %	1,61%
Weighted average value of investments by insurance and reinsurance undertakings supporting taxonomy-aligned activities, taking into account weights for investments in enterprises:	Based on turnover	3 505 254 462,02
	Based on capital expenditure	5 081 375 367,10
Percentage of assets covered by the key performance indicator relative to all investments of insurance and reinsurance undertakings, excluding investments in sovereign entities	Coverage rate: %	74,37%
Value of assets covered by the key performance indicator, excluding investments in sovereign entities	Coverage	315 664 152 501,21

Indicator for the insurance segment:

Weighted average value of investments by insurance and reinsurance undertakings supporting taxonomy-aligned activities, relative to the value of assets covered by the key performance indicator, taking into account weights for investments in enterprises:	Based on turnover: %	5,45%
	Based on capital expenditure: %	7,78%
Weighted average value of investments by insurance and reinsurance undertakings supporting taxonomy-aligned activities, taking into account weights for investments in enterprises:	Based on turnover	1 079 948 609,01
	Based on capital expenditure	1 542 164 602,62
Percentage of assets covered by the key performance indicator relative to all managed investments, excluding sovereign entities:	Coverage rate: %	30,30%
Value of assets covered by the key performance indicator, excluding investments in sovereign entities:	Coverage	19 811 835 360,87

Indicator for the banking segment:

Value (PLN million)	Main KPI
	Green Asset Ratio based on balance sheet
Total Environmentally Sustainable Assets	2 481,7
KPI Turnover	0,8%
KPI Capex	1,2%
Coverage rate (relative to total assets)	70,8%
Percentage of assets excluded from the numerator in the calculation of the Green Asset Ratio (Article 7(2) and (3) and Section 1.1.2 of Annex V)	36,2%
Percentage of assets excluded from the denominator in the calculation of the Green Asset Ratio (Article 7(1) and Section 1.2.4 of Annex V)	29,2%

Indicator for the asset management segment:

Weighted average value of investments supporting taxonomy-aligned activities, relative to the value of assets covered by the key performance indicator, taking into account weights for investments in enterprises:	Based on turnover: %	5,1%
	Based on capital expenditure: %	9,4%
Weighted average value of investments supporting taxonomy-aligned activities, taking into account weights for investments in enterprises:	Based on turnover	2 878 876 042,07
	Based on capital expenditure:	5 300 054 857,14
Percentage of assets covered by the key performance indicator relative to all managed investments, excluding sovereign entities:	Coverage rate: %	57,6%
Value of assets covered by the key performance indicator, excluding investments in sovereign entities:	Coverage:	56 583 843 976,06

Aggregated Performance Indicator

Segment	Revenue (PLN million)	Share of Group Revenue (A)	KPI Turnover (B	KPI Capex (C)	Weighted KPI Turnover (A*B)	Weighted KPI Capex (A*C)
Asset Management	755	1,1%	5,1%	9,4%	0,1%	0,1%
Credit Institution	29 517	44,7%	0,8%	1,3%	0,4%	0,6%
Investment Firm	24	0,0%	-	-	-	-
Insurance Companies	32 401	49,1%	5,5%	7,8%	2,7%	3,8%
Non-financial Entities	3 179	4,8%	-	-	-	-
Look through	134	0,2%	-	-	-	-
Total	66 010	100,00%	-	-	-	-
Average Key Performance Indicator	-	-	-	-	3,1%	4,5%

Full data, including breakdowns of numerator and denominator, additional information, and methodology, are available in the PZU Group 2024 Annual Report

Based on the Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021*, PZU SA will consider requests from public authorities to share data from insurance and reinsurance activities related to claims and benefits associated with climate risks, in accordance with the Taxonomy guidelines. Requests will be considered to the extent that the shared data may help authorities achieve better climate change adaptation at regional, national, or international levels.

The scope of shared data will be limited by applicable laws binding on PZU SA. In particular, if there is a risk of breaching legally protected secrets, including insurance secrecy, trade secrets, or confidential stock exchange information, data will be provided in aggregated form at a higher level.

*Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 supplementing Regulation (EU) 2020/852 by establishing technical screening criteria to determine the conditions under which an economic activity qualifies as contributing substantially to climate change mitigation or adaptation, and to determine whether that activity causes significant harm to any of the other environmental objectives.

Minimum safeguards under EU Regulation 2020/852 (EU Taxonomy) are one of the key criteria determining whether an activity is environmentally sustainable. Meeting the minimum safeguards criterion means that the activity can be classified as environmentally sustainable, as it is conducted in accordance with:

• respect for human rights, including labor rights,
• implementation of anti-corruption practices,
• fair competition,
• compliance with tax regulations,
• no involvement in controversial weapons.

PZU and its subsidiaries conducting activities in line with the EU Taxonomy comply with the principle of minimum safeguards, as indicated by the Platform on Sustainable Finance and the relevant Commission notice. Within the PZU Group, minimum safeguards are assessed in both operational and investment activities.

In 2024, there were no:

• final court rulings against PZU or its subsidiaries for violations of labor or human rights,
• cases before the OECD National Contact Point (NCP) regarding human rights violations,
• allegations before the Business and Human Rights Resource Centre,
• corruption-related court cases (no final convictions of subsidiaries or their senior management),
• violations of competition law confirmed by final rulings of the Voivodeship Administrative Court or the Supreme Administrative Court regarding tax law breaches.

PZU and its subsidiaries are not involved in any activities related to controversial weapons (anti-personnel mines, cluster munitions, chemical and biological weapons).

Each type of controversial weapon is banned under international conventions and treaties to which Poland is a signatory. PZU and its subsidiaries operate in compliance with international law and do not engage in business activities involving controversial weapons.