SFDR Disclosures

The SFDR introduces uniform requirements within the European Union for financial market participants and financial advisors regarding disclosure of information related to sustainability.

Powszechny Zakład Ubezpieczeń na Życie Spółka Akcyjna (also referred to as the “Company” or “PZU Życie SA”) is required to comply with the SFDR as a financial market participant, i.e. as an insurance company that provides insurance investment products1, such as unit-linked life insurance and endowment insurance.

PZU Życie SA is part of the PZU Group. Considering the growing importance of the topic of sustainability and climate change, as well as their relevance to the financial industry, PZU SA and PZU Życie SA have adopted the ESG2 strategy “Sustainable Growth” for 2021-2024, which sets the course of action to ensure sustainable economic growth of PZU Życie SA with respect for social, environmental and governance issues. 

One of the key actions to support the goals of the ESG Strategy “Sustainable Growth” in 2021 was the development and adoption of a sustainable investment policy.

The Company does not offer financial products that promote environmental or social aspects or aim at sustainable investments. The Company does not rule out introducing and offering such products in the future.

The Company offers unit-linked life insurance (financial products with investment options), the funds of which may be invested in units and titles of investment funds, among which may be funds that are financial products promoting environmental or social aspects or funds that are financial products aimed at sustainable investments.

PZU Życie SA views ESG factors from two complementary perspectives:

• impact on the development, results or situation of the investee and on the financial value of the investment (the so-called financial materiality), i.e. sustainability risks,
• external impact of an entity's activities or investments on ESG factors (the so-called environmental, social and governance materiality), i.e. the effects of the investment decisions on sustainability factors.

Pursuant to the SFDR, sustainability risk means environmental, social or governance event or condition that, if it occurs, could cause an actual or potential negative material impact on the value of the investment.

Pursuant to the SFDR, adverse sustainability impacts shall be understood as effects of investment decisions which have negative influence on aspects of sustainable development, i.e. the environmental, social and employee issues, issues related to the respect for human rights as well as combating of corruption and bribery.

In its insurance operations, PZU Życie SA offers life insurance contracts with an investment component. These comprise endowment insurance and unit-linked life insurance products with a diversified asset structure.

PZU Życie SA takes investment decisions in respect of investing funds to cover insurance liabilities arising from endowment insurance. In making investment decisions, PZU Życie SA takes into account sustainability risks.

Investment decisions regarding endowment insurance are taken within the framework of an investment strategy which envisages investment in debt securities issued, backed or guaranteed by the State Treasury of the Republic of Poland.

PZU Życie SA has outsourced the management of funds accumulated in unit-linked insurance funds, that are invested in equities or bonds or in units or titles of various investment funds (the so-called model funds), to Towarzystwo Funduszy Inwestycyjnych PZU SA (PZU SA Investment Fund Company) (hereinafter “TFI PZU SA”). PZU Życie SA obliged TFI PZU SA to take into account sustainability risks when managing these funds. Investment decisions on the aforementioned unit-linked insurance are made on the basis of a comprehensive analysis of the issuers of financial instruments and their environment. These analyses cover the full spectrum of factors with an impact on the financial instruments’ value, including sustainability risks. In the investment process, these risks are considered, inter alia, in financial, regulatory and legal analysis, as well as the level of entire instrument portfolio management.

PZU Życie SA makes decisions on the selection of investment funds in which units or titles are invested entirely in the assets of dedicated unit-linked insurance funds. In making the aforementioned decisions, PZU Życie SA takes into account, among other things, criteria such as the past performance of the investment fund, the rating of the investment fund company and risk indicators. PZU Życie SA periodically analyzes the investment performance of the investment funds, and if it becomes aware of a significant negative impact of sustainability risks on the performance of an investment fund, it will take steps to determine the actions of the investment fund company to mitigate these risks.

Executive Summary

PZU Życie SA considers the material adverse sustainability impacts of its investment decisions.

This statement is a consolidated statement on the material adverse sustainability impacts resulting from PZU Życie SA’s activities and covers the reference period from 1 January 2022 to 31 December 2022.

In its insurance operations, PZU Życie SA offers insurance-based investment products. These comprise endowment insurance and unit-linked life insurance products with a diversified asset structure.

The due diligence strategy in respect of the impacts takes into account the types of investment products offered by PZU Życie SA.

Endowment Insurance

PZU Życie SA takes investment decisions in respect of investing funds to cover insurance liabilities arising from endowment insurance. These funds are invested in debt securities issued, backed or guaranteed by the State Treasury of the Republic of Poland. 
PZU Życie SA considers the material adverse sustainability impacts of its investment decisions, except that the investment decisions are taken within the framework of an investment strategy which envisages investment in debt securities issued, backed or guaranteed by the State Treasury of the Republic of Poland.

Unit-Linked Life Insurance

Unit-linked insurance funds are invested in financial instruments issued by corporate issuers (e.g. equities or corporate bonds) or by sovereigns (countries) and international organizations (e.g. treasury bonds), or else in participation units and titles of collective investment undertakings.

As regards unit-linked life insurance whereby funds are invested in participation units or titles of dedicated collective investment undertakings, PZU Życie SA takes into account whether a given investment fund pursues a sustainable investments policy or promotes environmental or social aspects. Furthermore PZU Życie SA considers if the investment fund management company managing the fund takes into account the material sustainability impacts of their investment decisions and whether its discloses their scope in compliance with the Delegated Regulation.5 Being guided by the wording of the contracts of insurance as well as the policyholder’s and the insured’s interests, PZU Życie SA considers the above mentioned information when taking decisions on the selection of the investment funds in whose participation units the assets made available under the unit-linked life insurance agreement will be invested, including other criteria of investment fund evaluation.

PZU Życie SA outsourced to TFI PZU SA the management of unit-linked life insurance funds whose assets are invested in equities or bonds, or else into the participation units or titles of various investment funds (the so-called model funds). Being guided by the wording of the contracts of insurance, the policyholder’s and the insured’s interests, as well as considering the products’ investment objectives, rules of asset investment diversification and other investment restrictions, the investment selection criteria and the adopted benchmarks and reference rates arising from the law, PZU Życie SA committed TFI PZU SA that when managing the portfolios of these unit-linked funds the company take into account the material adverse sustainability impacts only when it does not negatively impact the expected rate of return on the product as well as the relation of the expected profit to the value of risk, except that the possibility to take into account the material adverse sustainability impacts of investment decisions is limited or excluded in respect of products with defined investment policy.

In the contract of insurance concluded with the unit-linked fund, the policyholder selects the unit-linked funds in which they wish to invest the funds from their insurance premium.

Furthermore, PZU Życie SA publishes the material adverse sustainability impacts in quantitative terms, so that the information is based on Annex I of the Delegated Regulation. This information is published below.

PZU Życie SA notes that the companies in which the funds have been invested are not required to prepare and publish data on the indicators of adverse sustainability impacts. Some of these companies publish such information on a voluntary basis. For some indicators, more companies in which the assets have been invested publish such data, whereas for other indicators there are very few companies that publish such data. PZU Życie SA has not performed any data estimates in respect of the indicators for the companies that do not publish the data, because such estimates would not be reliable and could be misleading for customers. In section “Description of the strategy of identification and hierarchy ranking of the material adverse sustainability impacts”, point (e) “data sources used” in the table, the “Data Coverage” column indicates what percentage of the investment portfolio is made up of companies that have published a particular index. Customers should be aware that for some indicators this percentage is very low, which means that the data published does not reliably reflect the material adverse sustainability impacts of PZU Życie SA’s operations.

Statement on the material adverse sustainability impacts of investment decisions of PZU Życie SA.pdf

The remuneration policy of the Management Board of PZU Życie SA has been developed in accordance with the requirements of generally applicable laws, including the Act on the Rules for Setting the Compensation of Persons Managing Certain Companies of 9 June 2016.

Payment of variable compensation depends on the achievement of management objectives set by the PZU Życie SA Supervisory Board, among which the following are taken into account: improvement of economic and financial indicators and taking actions that take into account social interests, including those resulting in the company's contribution to environmental protection.

As of 2021, the annual management objectives of the PZU Życie SA Management Board Members also take into account the achievement of ESG strategic objectives. The assessment of their attainment translates directly into the amount of the annual variable compensation. The ESG strategy defines key initiatives and ambitions that define the Company's activities in the spheres of environmental, social and governance factors, as well as performance indicators in these areas. The ESG strategic objectives include measures to protect the environment and prevent climate change, improve the quality of life for society, and ensure the highest standards of management and corporate governance.

In addition, in accordance with the PZU Życie SA Compensation Policy, the Company includes in the annual targets given to senior executives the performance of ESG-related tasks, and the assessment of their performance has a direct impact on the amount of the annual bonus.

Information publication date: 31 March 2021

Information update dates:

On 30 June 2021, an amendment resulting from Article 4(2) and (3) of the SFDR was implemented.

On 30 June 2022, amendments were made due to a change in the factual status: in the contents of the “Introduction” and in the contents of the disclosure from Article 5.

On 31 December 2022, amendment related to the entry into force of the Delegated Regulation as of 1 January 2023.

On 29 June 2023, a statement was published on the main adverse impacts of PZU Życie SA's investment decisions on sustainability factors, in connection with the entry into force of EC Delegated Regulation 2022/1288 as of 1 January 2023.