EU Taxonomy

Pursuant to the EU Taxonomy (Regulation EU 2020/852), PZU SA publishes information on how and to what extent its business relates to economic activity that qualifies as environmentally sustainable. In particular, PZU SA presents what percentage share of its entire operations in non-life insurance is climate change-aligned.

Percentage share of business activities in insurance other than life insurance that is eligible as taxonomy-aligned

	2021	2022
PZU	50,20%	53,9%
PZU Group	53,50%	54,3%

Percentage share of business activities in insurance other than life insurance that is ineligible as taxonomy-aligned

	2021	2022
PZU	49,80%	46,1%
PZU Group	46,50%	45,7%

To determine the percentage share of activity eligible as taxonomy aligned and calculate the indicators in a manner providing complete information, the PZU Group has reviewed all non-life insurance products (belonging to Class II) to draw up a product classification system and separate those that provide insurance cover in the event of materialization of climate risks.

The products considered eligible as taxonomy-aligned are products that belong to one of eight lines of business and that cover at least one of the 28 climate risks: constant or acute hazards, related to temperature, wind, water or solid mass. All-risks products were also deemed to be eligible.

A similar estimate was drafted for inward reinsurance premiums; inward reinsurance premiums deemed eligible as taxonomy-aligned refer to products that are deemed eligible as taxonomy-aligned.

These indicators are presented on the standalone basis for PZU SA and on the consolidated basis for all the PZU Group companies that do business in non-life insurance: PZU, LINK4, TUW PZUW, Lietuvos Draudimas, PZU Branch in Estonia, AAS Balta and PrJSC IC PZU Ukraine.

Pursuant to the EU Taxonomy (Regulation EU 2020/852), PZU SA publishes information on how and to what extent its investment activities relate to economic activity that qualifies as environmentally sustainable.

The first four indicators pertain to PZU SA’s investment policy in terms of the accumulated assets originating from the insurance activity they conduct; these indicators should demonstrate the percentage share of assets invested in activities aligned with the taxonomy in all assets held.

1a. Percentage share of total assets of assets with exposure to economic activities eligible as taxonomy-aligned, KPI revenue	2,3%
1b. Percentage share of total assets of assets with exposure to economic activities eligible as taxonomy-aligned, KPI capital expenditure	3,0%
2a. Percentage share of total assets of assets with exposure to economic activities ineligible as taxonomy-aligned, KPI revenue	5,8%
2b. Percentage share of total assets of assets with exposure to economic activities ineligible as taxonomy-aligned, KPI capital expenditure	5,1%
3. Percentage share of total assets of assets with exposure to central governments, central banks and supernational issuers as well as derivatives	25,7%
4. Percentage share of total assets of assets with exposure to entities not subject to the obligation of publishing non-financial information	14,5%
Total assets	45,9

PZU Group is a mixed group (it consists of financial companies and non-financial companies) and conducts diversified activity, therefore its taxonomic disclosures have been construed from the vantage point of an insurance undertaking.

PZU Group - Investment policy indicators

1a. Percentage share of total assets of assets with exposure to economic activities eligible as taxonomy-aligned, KPI revenue	0,5%
1b. Percentage share of total assets of assets with exposure to economic activities eligible as taxonomy-aligned, KPI capital expenditure	0,9%
2a. Percentage share of total assets of assets with exposure to economic activities ineligible as taxonomy-aligned, KPI revenue	2,3%
2b. Percentage share of total assets of assets with exposure to economic activities ineligible as taxonomy-aligned, KPI capital expenditure	2,0%
3. Percentage share of total assets of assets with exposure to central governments, central banks and supernational issuers as well as derivatives	32,5%
4. Percentage share of total assets of assets with exposure to entities not subject to the obligation of publishing non-financial information	25,9%
Total assets	436,1

 

Methodology

In accordance with the guidelines of the European Commission, the indicators were calculated on the basis of the standards used in financial reporting, namely for the purposes of calculating the standalone indicators - the Polish Accounting Standards were applied, and for the purposes of calculating the consolidated indicators - the International Financial Reporting Standards were applied.

Consolidated indicators refer to the financial companies belonging to the PZU Group, whereby the scope of consolidation is identical to the one used in the consolidated financial statements in accordance with the guidelines cited above, except for banks, whose assets are consolidated on prudential basis, pursuant to the Capital Requirements Regulation.

Therefore, the term “exposure” for the purposes of the standalone indicator applicable to PZU is understood as the entirety of the funds originating from insurance activity. In a balance sheet sense, this is the sum total of investments, save for investments in subordinated entities. The “look through” approach has been used, i.e. for investments in collective investment undertakings the investments of the investment funds in which PZU holds participation units have been analyzed. The sum total of the investments for which the “look through” approach has been used is higher than the value of the participation units in these funds carried in the financial statements - the difference follows chiefly from the settlements of these collective investment undertakings.

The term “exposure” for the purposes of PZU’s consolidated indicator incorporates the distinct nature of the activity and business conducted as part of the PZU Group. In particular, this is significant in insurance activity related to investing money and for banking purposes related to lending activity. The following approach has been adopted for the purposes of calculating the consolidated indicators:

• for the PZU Group, net of banking activity, “exposure” is understood to mean investment financial assets at their net carrying amount, save for investments in life insurance where the risk is carried by the policyholder, as well as owned properties and properties held for investment purposes;
• for the PZU Group’s banking activity, “exposure” is understood to mean credit, lease, factoring receivables, corporate bonds and equity interests at their net carrying amount.

For both the respective standalone and consolidated indicators in respect of operations (save for the banking activities), the “look through” approach has been applied to the majority of exposures defined as above; however, it was not possible in the case for approximately 4% of the exposures and 2% of the assets in the case of the standalone indicator, and 2% of exposures and 0.2% of assets in the case of the consolidated indicator, respectively. These exposures have been qualified to indicator 4.