4. Workers in the value chain (ESRS S2)
4.1 Material impacts, risks and opportunities and their interaction with strategy and business model (ESRS 2 SBM-3)
The workforce of business partners play a key role in UNIQA’s value chain. Internationally recognised standards are applied to ensure that the key interests of relevant stakeholders are taken into account even when there is no direct interaction between UNIQA and workers in the value chain. The materiality assessment identified workers along the value chain from the following areas that may be subject to material impacts from UNIQA’s operations:
- Suppliers: The selection of suppliers can indirectly affect workers’ working conditions. From 2025 onwards, the selection and annual evaluation of suppliers will be geared towards preventing violations of labour law. In the future, the Corporate Sustainability Due Diligence Directive (CSDD) will address this topic.
- Corporate customers: The insurance coverage offered indirectly affects the business activities and working conditions of corporate customers’ workers. Failing to adequately implement measures when reviewing the acceptance of corporate customers and as part of their ongoing assessment provides little incentive for corporate customers to improve working conditions for their employees.
General risks that affect every type of company are reviewed as part of the supplier evaluation. UNIQA suppliers and insurance customers primarily operate in sectors in which UNIQA is also active. No incidents related to these risks were identified in the financial year. No negative impacts specifically associated with the business model or arising from specific incidents as a result of UNIQA’s business activities were identified. It was also not possible to limit any potential negative impacts to workers with specific characteristics. No serious issues or incidents related to human rights were identified within the value chain in the financial year.
Since 2020, UNIQA has been a member of the UN Global Compact, the principles of which are enshrined in the UNIQA Code of Conduct which applies to all employees. Suppliers are also expected to uphold the principles of the UNIQA Code of Conduct and to act accordingly. This ensures that the interests of the affected stakeholder groups are taken into account. The UNIQA Code of Conduct contains the material social and ecological criteria of the UN Global Compact. It addresses numerous topics, including ethical and legally compliant governance; conduct towards customers, suppliers, employees and other stakeholders; payment in kind (gifts, donations, etc.); the management of real estate and confidential information; competitive conduct; conflicts of interest; environmental and social sustainability, such as human rights (forced and child labour); labour standards, environmental protection and anti-corruption; and general rules of communication.
Occupational safety, precarious employment and human trafficking are not covered because they have not been identified as material risks in UNIQA’s normal course of business.
The corporate strategy is also aligned with the internationally recognised provisions of the UN Universal Declaration of Human Rights. This not only ensures compliance but also contributes to stable and sustainable business relationships in the long term.
4.2 Policies related to value chain workers (S2-1)
4.2.1 Workforce of suppliers
UNIQA’s business model is based on the integration of sustainability principles throughout the value chain. Suppliers are selected not only on the basis of economic factors, but also on the basis of social and environmental factors depending on the product group in question.
The Group Procurement Policy adopted by the Management Board provides the framework for procurement procedures. Along with other aspects, the policy stipulates that suppliers with which a defined order value has been agreed must complete a survey containing specific questions on the topics of human trafficking, forced labour and child labour. The survey is based on the German Supply Chain Act and covers roughly 50 aspects of the following categories:
- Risk analysis
- Measures and control mechanisms
- Prevention and remedies
- Grievance mechanisms
- Reporting and transparency
In the financial year, UNIQA sent out this survey and collected the relevant data for the first time. Each year, the data will be updated, reviewed and used to ensure that suppliers meet UNIQA’s compliance requirements in the long term. From 2025 onwards, the human rights survey will become part of the ongoing supplier evaluation process and serve as the basis for discussions with suppliers. Responsibility for the Group Procurement Policy lies with the Management Board member for Operations, Data & IT.
4.2.2 Workforce of corporate customers
In the corporate customer segment, the UNIQA Sustainability Strategy in Corporate Business and the ESG Underwriting Standard ensure that corporate customers are evaluated in terms of ESG risks as part of the underwriting process. The corresponding risk assessment is carried out by an external data provider on the basis of the Principles for Sustainable Insurance (PSI) in order to manage ESG risks in the non-life insurance business. With regard to social matters, in addition to issues such as child labour, human trafficking and forced labour, aspects such as poor working conditions and violations of workers’ rights are also taken into account. The UNIQA Sustainability Strategy in Corporate Business and the ESG Underwriting Standard are the responsibility of the Customers & Markets Austria and Customers & Markets International Management Board function.
Insurance products in the property, liability and transport insurance business lines and in the financial lines of the industrial customer segment are subject to the risk assessment covering ESG topics. As the PSI guidelines exclude certain sectors from ESG risk exposures, around 50 per cent of the company’s portfolio is currently subject to an ESG risk assessment. When defining the strategy, the interests of stakeholders are indirectly accounted for through the application of the PSI guidelines on the basis of their interests. There is no corresponding engagement with the workforce in this regard. The UNIQA Sustainability Strategy is available to view on UNIQA’s intranet.
4.3 Processes for engaging with value chain workers about impacts (S2-2)
Beyond the processes described above, UNIQA does not have a general procedure in place for engaging with workers in the value chain.
4.4 Processes to remediate negative impacts and channels for value chain workers to raise concerns (S2-3)
Appropriate measures are taken in the event of negative incidents or violations of guiding principles by suppliers. These measures may include contract terminations or blacklisting. If either of the above scenarios are found to have occurred, business relationships are not entered into with the suppliers in question. There were no such recorded incidents in the financial year. The human rights survey is used to identify potential risks at an early stage and to take preventive measures. A detailed strategy on how to treat specific risks in the related sector along with related risk mitigation measures will only be developed once the full portfolio analysis planned for 2025 is complete.
Business partners can raise their concerns or complaints on the whistleblowing platform. There are no specific channels available to the workforce of suppliers or corporate customers. Please consult the chapter “Sustainability in UNIQA’s governance (ESRS G1)” for more information.
4.5 Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions (S2-4)
Supplemental agreements will be concluded with suppliers that fall under the scope of the implementation of the Digital Operational Resilience Act (DORA). These agreements cover aspects such as environmental protection and safety, labour policies and business ethics, among other topics. Only suppliers from the information and communication technology (ICT) sector fall under the scope of DORA. For the first time, affected suppliers were identified on the basis of IT applications and services in the 2024 financial year as part of a business impact analysis, which will be conducted annually starting in 2025. The relevant contracts and suppliers were identified for this purpose. The UNIQA Supplier Commitment Letter forms part of the supplementary agreements. It contains the key aspects of the Code of Conduct and requires suppliers to take action to reduce their environmental impacts, guarantee labour rights and comply with ethical business practices. The commitments also include regularly reporting on sustainability metrics, adhering to environmental and safety standards, and ensuring fair working conditions. In the financial year, commitment letters were signed by 38 per cent of suppliers.
From 2025 onwards, the effectiveness of these measures will be monitored on an annual basis by analysing the human rights surveys and by engaging in a dialogue with suppliers within the scope of supplier engagement. In the event of deviations from the standards, measures such as those described in section 4.4 are taken.
It is only possible to demand action be taken by corporate customers to a limited extent as the business activities primarily focus on assuming and assessing risk, not on exerting direct operational influence. Measures are therefore currently mainly addressed in the approval process. From 2025 onwards, this will also be the case for automatic contract renewals.
In the 2024 financial year, an analysis of the customers with the highest premium volumes in the European markets was conducted. The aim of the analysis was to assess these customers in terms of their social and governance risks. Companies with the highest potential exposure to these risks were screened for critical incidents in the media. No reports of critical incidents related to human rights were identified.
4.6 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities (S2-5)
Findings from the human rights surveys are used to produce specific targets and metrics for managing and evaluating supplier relationships. The results of the first evaluation are expected to be available in the 2025 financial year. UNIQA’s business activities have a negligible sustainability impact within its value chain. Nevertheless, targets have been set to further minimise these impacts. On the one hand, the targets include increasing supplier transparency by analysing and evaluating the human rights surveys from 2025 onwards. On the other hand, targeted measures will be developed on this basis to reduce potential risks in the supply chain as of 2025. A comprehensive framework containing specific targets and metrics will be defined by the end of 2025 in order to evaluate and improve ESG performance in the corporate customer business.