Environmental matters

This section describes the influence of environmental matters on our business activities along with the impacts of our business activities on the environment. It explains both the concepts and measures in place as well as specific targets and impacts.

The following topics in particular are of material importance in terms of environmental matters: engagement for climate change, engagement for European climate targets, advice on and prevention of natural disasters. We are tackling these challenges by supporting the transition to a low-carbon economy via our capital investments and our insurance products. It is also our aim to structure our own operational management in an exemplary fashion, taking into account our environmental and social targets.

UNIQA climate strategy

As an insurer, UNIQA remains exposed to the impact of climate change. The UNIQA climate strategy therefore forms part of our sustainability strategy. In order to counter the risks of climate change, we believe it is important to make protecting the environment part of our core business and structure our targets in line with the 1.5 degrees Celsius target set under the Paris Agreement. To do this, we are focused on three key areas, namely investment, underwriting and our own operational management. The concepts in relation to this are illustrated below.

Environmental matters in investment

UNIQA is committed to implementing responsible and sustainable management of capital investments. We believe that a sustainable investment strategy can bring about financial success in the long term and is a positive addition to the traditional investment objectives of returns, security and liquidity.

• Assessing environmental and social impacts on our investments on an ongoing basis
• Assessing the impact that companies and countries in which we have invested have on the environment and living conditions for communities
• Establishing new ESG databases in order to ensure continuous integration of the latest assessments into our investment decision
• Integrating indirect carbon emissions from our investments into our management process
• Introducing a 1.5 degrees Celsius climate target trajectory, based on scientific data, to reduce carbon emissions in line with the Paris Agreement

By voluntarily signing up to the UN Principles for Respon­sible Investment (PRIs) and collaborating with all of its signatories, we are taking crucial steps to achieve this ambitious long-term target. At the same time, the PRIs also provide the framework for our Group-wide UNIQA Responsible Investments Guideline. This guideline governs our capital investment management, including binding exclusion criteria. The guideline was revised and updated in 2021.

We also acceded to the Net-Zero Asset Owner Alliance in 2021, whose principles represent an additional framework for our investment strategy and our reporting guidelines. It is on this basis that we are now drafting a climate trajectory in order to bring our investment closer to the climate target of 1.5 degrees Celsius set under the Paris Agreement and to achieve the goal of climate neutrality by 2040 for Austria, and 2050 for our international subsidiaries. A joint commitment by businesses and legislators to implement the required measures as well as strong coordination with the other members will help contribute to this.

In 2021, we also concluded a contract with ISS (Institutional Shareholder Services) in order to be able to better examine our investment portfolio with regard to ESG criteria. Assessments are undertaken for individual issuers (companies or countries) rather than specific asset classes. This means we can now also analyse individual aspects of ESG risks as well as climate data and climate risks for listed assets.

We continue to regard thermal coal as a red line criterion in our investment. We had already sold all of our investments in coal-based companies by the end of 2019. However, the integration of the former AXA companies in Poland, the Czech Republic and Slovakia has once again introduced to our portfolio a number of individual investments in companies with coal exposure. We are nevertheless determined to reduce these positions as soon as possible as part of our decarbonisation strategy.

During the period under review, we have been working intensively on dealing with the entry into force of the new EU Sustainable Finance Disclosure Regulation (SFDR) in March 2021 and its classification and reporting requirements. An initial report on the two environmental aspects covered under EU Taxonomy classification is published in the section entitled “Disclosures according to the EU Taxonomy Regulation”.

We have also switched our four managed unit-linked UNIQA Portfolio I to IV funds of funds to Article 8 products as of 1 January 2022 and restructured the investment process.

Environmental matters in underwriting in the Retail segment

As Austria’s largest health insurer, we bear equal responsibility for protecting the personal living standards of our customers and the value added processes of our company. Risk prevention and mitigation are key areas in which environmental and social impacts increasingly need to be incorporated into the advising approach. Sustainability aspects are therefore being taken into account in the underwriting process as well as products and services within our insurance business.

In addition to our existing portfolio, we are also focused on providing more environmentally friendly investment opportunities, including in particular more sustainable products (unit-linked insurance products) and even pure “green” products. A key basis for this sustainable optimisation is the switch from UNIQA Portfolio I to IV to products under Article 8 of the EU Taxonomy Regulation, with effect from 1 January 2022. Investments can only be made in sub-funds in accordance with Article 8 and 9 (investment funds and ETFs). Article 8 funds consider environmental as well as social characteristics and invest in companies that demonstrate good corporate governance. Article 9 funds also aim to achieve a sustainable investment objective and help implement the United Nations’ Sustainable Development Goals.

One of our other targets is to gradually expand our range of insurance products that satisfy environmental and climate-related criteria so as to promote a sustainable lifestyle and sustainable corporate governance on a broad basis. To do this, in 2021 we collected data on our customer segments and their sustainability profiles by way of market surveys and incorporated the results into the planning for product development. We also rely on improving the quality of advice on resource efficiency and reducing emissions as well as sustainable additional insurance modules. With our repair insurance, which can be taken out as a supplementary product module as part of our homeowner insurance policy, we provide cover for our customers for the repair costs of household and domestic appliances at their current value, for example. With regard to our motor vehicle liability insurance, we also offer a 25 per cent reduction on the premium when you insure an electric car.

Environmental matters in underwriting in the Corporate and Affinity segment

We also want to offer our corporate customers tailor-made products and services with added value in terms of sustainability. The drafting of a long-term strategy to implement measures to combat climate change was the top priority here in 2021. Examples of this include advice on and services regarding natural disasters, restoration work following a loss (post-loss consultancy) or preventive measures to combat business interruptions caused by natural disasters.

Since 2019, we have not completed any new customer business with companies with a direct or indirect carbon share of more than 30 per cent. In addition, we have not completed any new customer business with mining companies that produce more than 20 million tonnes of coal a year. Subject to certain conditions in place, UNIQA is on hand to provide positive accompanying support to existing customers from the coal industry in helping them to transform their business models by 2025 at the very least. This also applies to companies that generate electricity from different sources, including in particular renewable energy from solar and wind farms, but also generate electricity from thermal plants. However, this action requires the development and implementation of a credible transformation plan and alignment with defined sustainability criteria. The insurance policies for existing customers who fail to provide evidence of their decarbonisation process as requested will not be extended from 2026 onwards. Another focal point of our decarbonisation strategy is providing suitable solutions in the field of renewable energy, both for new as well as existing customers.

In order to consistently pursue our ambitions to this effect, we voluntarily agreed to ensure compliance with the Principles for Sustainable Insurance (PSIs) at the end of 2020. These principles were developed by the United Nations’ Environment Programme Finance Initiative (UNEP FI). By signing up to these principles, we under­take to consider ESG aspects (Environment, Social, Governance) along the entire value added chain. In other words, we undertake to involve all of our stakeholders in issues surrounding the environment, social responsibility and corporate governance.

Environmental matters in operational management

UNIQA is committed to having exemplary operational management in place. This commitment is a key focal point in our sustainability strategy.

Our overriding objective is to continue reducing our environmental footprint and be CO₂ neutral by 2040 in Austria, and by 2050 in our other international subsidiaries. We therefore ensure international certifications and standards are applied, both with regard to our suppliers as well as within our own operational management. We rely on improving energy efficiency, using more renewable energy, reducing CO₂ emissions, systematically conserving resources and promoting environmentally friendly mobility. Here in Austria, we have also had an energy monitoring system in place since 2018. This system allows us to be able to illustrate our sustainability initiatives and the progress achieved as a result transparently and on a comparative basis. In order to support the existing energy monitoring system and intensify efforts around it, a target was set in early 2022 to introduce an environmental management system certified to EMAS standards by no later than 2025.

Environmental matters in our operational management fall within the remit of the Chief Operating Officer and are the responsibility of the Group Procurement department. The initial focus here is on our largest core market in Austria.

We pursue specific CO₂ reduction targets in the following five areas in particular:

• Installation of photovoltaic systems
• Greening of heating/cooling systems
• Optimisation of energy monitoring
• Conversion to LEDs throughout the company
• Greening of the vehicle fleet