Investment activity

This report alongside the report on non-financial information of PZU Group include four tables:

1. Green Investment Ratio pursuant to Annex X to the Disclosures Delegated Act.
2. Indicators for certain new energy related activities – nuclear and fossil gas related activities pursuant to Annex XII to the Disclosures Delegated Act.
3. Eligibility indicators for the four environmental objectives pursuant to Article 10(7)(a) of the Disclosures Delegated Act as amended by Article 5(2) of the Environmental Delegated Act.
4. Eligibility indicators for new activities in the manufacturing and transportation sectors under the two climate objectives pursuant to Article 10(7) (a) of the Disclosures Delegated Act as amended by Article 5(2) of the Environmental Delegated Act.

In accordance with the guidelines in the supplementary documents mentioned above, the indicators were calculated on the basis of the standards used in financial reporting, namely International Financial Reporting Standards. Consolidated indicators refer to the financial companies belonging to the PZU Group, where the scope of consolidation is, in accordance with the assumptions quoted above, identical to the one used in the consolidated financial statements, except for banks where assets have been prudentially consolidated in accordance with the CRR Regulation.

Disclosures have been prepared on a consolidated basis. The basis is the consolidated assets from the consolidated financial statements of the PZU Group. Companies subject to full consolidation are treated as “transparent.”

Separate KPIs for PZU SA’s PZU Group subsidiaries have not been calculated and presented. In future years, if such regulatory guidelines and market practice become firmly established, the PZU Group will consider calculating and presenting KPIs for subsidiaries that are non-financial and financial undertakings (e.g., pursuant to Annexes III–IV to the Disclosures Delegated Act for asset managers, pursuant to Annexes V–VI for credit institutions, etc.), and calculating a consolidated KPI for the PZU Group based on the share of a given business in PZU Group revenue and the KPI for the given business.

The funds of unit-linked products(“ULs”) are invested in, among other things, investment fund participation units and titles. The calculation of indicators for the PZU Group’s investment activities was based on the look through approach, i.e. the companies in the portfolios of these investment funds were taken into account in the proportion that corresponds to the value of the UL’s investment in the investment fund. The look through approach mentioned above did not apply to ETF funds, of which ETFs in the portfolios of PZU Group insurance companies in Lithuania and Latvia, including under ULs, constituted a significant position. In the next few years, the PZU Group will endeavor to include ETF funds under the look through approach.

Where the PZU Group invests in investment funds (UCITS or AFI), the look through approach is planned to continue to be applied, while a solution in which turnoverbased and CapEx-based KPIs of the asset manager that manages that UCITS or AIF would be used to calculate its own KPIs is not planned.

After applying the look through approach criterion, the PZU Group had exposure to a large number of investee issuers, and for some issuers the share of issuer-issued instruments in PZU Group assets (using the look through approach criterion) was very low. It was assumed that the impact of the KPIs of such issuers on the value of the PZU Group’s KPI was insignificant, and therefore it was determined that the KPIs of issuers with a value of PZU Group investment lower than PLN 25,000 would not be taken into account (assuming the look through approach criterion). Such a cut-off point was selected using an expert method, also taking into account the cost of obtaining market data. After taking this cut-off point into account, the issuers whose indicators have been omitted represent a total of about PLN 25 million, which is less than 0.15% of the PZU Group’s assets covered by the KPI. For such exposures, it was assumed that their activities are not EU Taxonomy-eligible, so they are not EU Taxonomy-aligned either. This approach is in line with the European Sustainable Finance Platform’s guidelines, according to which the Disclosures Delegated Act is silent on the application of materiality thresholds for eligible activities, so a company can always report a small activity as not EU Taxonomy-eligible.

Disclosures regarding the investment activities of the PZU Group were prepared based on the following data sources:

• internal data from accounting systems and financial reports;
• data on the entities, in which an investment was made, obtained from external services, in particular Bloomberg;
• data on the entities, in which an investment was made, obtained directly from those entities;
• internal data on investment properties or data obtained from the managers of these properties. Data from external services, including Bloomberg, generally reflect data published by companies, but it cannot be ruled out that at the current stage of market and system development, data from external services may not fully reflect data published by companies. This can result in data discrepancies, for example, between data from a report under Annex X of the Disclosures Delegated Act and Annex XII to the Disclosures Delegated Act.

Disclosures of the PZU Group’s investment activities for 2023 are published together with the PZU Group’s consolidated activity report in the first quarter of 2024. At the same time, non-financial reports for 2023 of non-financial and financial undertakings, in which the PZU Group has made investments, will be published. Therefore, for the vast majority of investee undertakings data for 2023 was not yet available at the stage of preparing this disclosure. Therefore, for the calculation of indicators for the investment activities of the PZU Group, the 2022 data for the investee undertakings was adopted. The goal was to ensure data consistency for all investee undertakings.

For investee undertakings that do not publish nonfinancial reports, but are part of a group that is subject to non-financial reporting and that are covered by the group report, the group indicators derived from the consolidated report were adopted. On the other hand, in cases where there is no substantive justification (e.g., a completely different activity than the group’s leading activity, a project under construction, etc.) it is permissible not to include the group indicator.

According to the Disclosures Delegated Act, financial undertakings may use estimates for assessing the Taxonomy-alignment of their exposures to undertakings referred to in paragraph (6), points (e) and (f) [undertakings established in a third country], where those financial undertakings are able to demonstrate compliance with all criteria of Article 3 of Regulation (EU) 2020/852, except with the criteria laid down in Article 3, point (b) of that Regulation [does not cause serious harm to any of the environmental objectives set forth in Article 9 in accordance with Article 17]. Financial undertakings shall formalize, document and make public the methodology upon which such estimations are based, including the approach and research methodology, the main assumptions and precautionary principles used. However, the PZU Group has decided not to use such estimates. Therefore, only data provided by investee undertakings were used for calculations. The estimates made by the Bloomberg service were also not used.

The PZU Group has decided not to individually contact the entities, in which it has made investments, to obtain data prior to official publication due to the costs associated with performing this task, given the scale of the PZU Group’s operations. The PZU Group also decided not to make independent estimates of data for other entities due to the prudent approach adopted.

Pursuant to Annex IX to the Disclosures Delegated Act, investments shall mean all direct and indirect investments, including investments in collective investment undertakings and participations, loans and mortgages, property, plant and equipment, as well as, where relevant, intangibles.

The following asset items from the financial statements were considered investments:

• Property, plant and equipment (with only own properties included under this item);
• Investment property;
• Entities accounted for using the equity method;
• Assets pledged as collateral for liabilities;
• Assets held for sale (with only investment and own properties included under this item, while other types of assets are not included);
• Loan receivables from clients;
• Investment financial assets, except for cash and deposits;
• Derivative financial instruments (according to Article 7(2) of the Disclosures Delegated Act, they are included in the denominator, while they are excluded from the numerator).

The following asset items from the financial statements were assumed not to meet the definition of investments, and therefore were not included in the reporting framework:

• Goodwill
• Intangible assets
• Deferred tax assets
• Insurance contract assets
• Reinsurance contract assets
• Other assets
• Receivables
• Cash and cash equivalents.

Pursuant to Article 7(1) of the Disclosures Delegated Act, exposures to central governments, central banks and supranational issuers shall be excluded from the calculation of the numerator and denominator of key performance indicators of financial undertakings. Therefore, covered assets were assumed to be all investments made by the insurance company (total assets / total AuM), excluding investments in sovereign entities: [covered assets (KPI)] = [all investments (total assets / total AuM] – [investments in sovereign entities (exposures to central governments, central banks and supranational issuers)]

Securities guaranteed or secured by the Stet Treasury, including bonds issued by Bank Gospodarstwa Krajowego and the Polish Development Fund, were also considered exposures to central governments. Among others, the European Investment Bank has been recognized as a supranational issuer.

Exposures to regional governments and to local government units were not considered to be exposures to central governments. The financial instruments they issue, such as municipal bonds, have been included in the denominator – the assets covered by the KPI – while they are excluded from the numerator. This approach was not applied to exposures to regional governments and local government units in the portfolios of investment funds in which the PZU Group made investments, to which the look through approach was applied. These exposures are excluded from the denominator, as are exposures to central governments. The PZU Group will endeavor to also include these exposures using the look through approach to the denominator – to the assets covered by the KPI – in future years.

Pursuant to Article 7(3) of the Disclosures Delegated Act, exposures to undertakings that are not obliged to publish non-financial information pursuant to Article 19a or 29a of Directive 2013/34/EU shall be excluded from the numerator of key performance indicators. Accordingly, environmentally sustainable bonds of Small and Medium Enterprises (“SMEs”) and financing of renewable energy projects (“RES”) (e.g., wind farms) were excluded from the KPI numerator, and loans to such entities were also excluded.

PZU Group voluntarily discloses the estimated green investment ratio (GIR) calculated as if the financing of RES projects was included in the KPI numerator. In this case, the GIR would be 0.84%. It should be emphasized that this is a voluntary disclosure and does not constitute a disclosure under the law.

Pursuant to Annex IX to the Disclosures Delegated Act, debt securities with the purpose of financing specific identified environmentally sustainable activities or projects or environmentally sustainable bonds issued by an investee undertaking have been included in the numerator up to the value of EU Taxonomy-aligned economic activities that the proceeds of those bonds and debt securities finance, on the basis of information provided by the investee undertaking.

The denominator (in the assets covered by the KPI) included derivatives recognized in assets in the financial statements, without offsetting with derivative liabilities.

According to Article 7(4) of the Disclosures Delegated Act, without prejudice to Article 7(1) of this Act, environmentally sustainable bonds or debt securities with the purpose of financing specific identified activities that are issued by an investee undertaking shall be included in the numerator of key performance indicators up to the full value of Taxonomy-aligned economic activities that the proceeds of those bonds and debt securities finance, on the basis of information provided by the investee undertaking. On the other hand, as indicated above, if such information is not available, general indicators for the undertaking/group from the parent company’s non-financial report are adopted. Exposures whose purpose is not to finance specific identified activities are included in the weighted numerator of the issuer’s turnover KPI and capital expenditure KPI in accordance with the method set forth in Annexes III, V, VII and IX to the Disclosures Delegated Act. Where an investee undertaking has issued the environmentally sustainable bonds or debt securities with the purpose of financing specific identified activities, financial undertakings shall discount (correct) the KPI of the investee undertaking accordingly to avoid double counting.

It was assumed that since Article 7(4) of the Disclosures Delegated Act refers only to environmentally sustainable bonds or debt securities, the rules described in this provision should not be interpreted broadly to include other forms of investments, such as loans made for such purposes.

It was assumed that Article 7(4) of the Disclosures Delegated Act is not a special provision to Article 7(3) of the Act. Article 7(4) was assumed to apply to the situation where an undertaking subject to non-financial reporting (under Article 7(3)) issues environmentally sustainable bonds. In this case, their revenues were taken into account up to the full amount, rather than as an overall indicator of compliance with the EU Taxonomy for the undertaking’s activities.

In the case of investments in credit institutions, green asset ratios (GARs) were adopted in place of revenue (REVENUE) and capital expenditures (CAPEX) in the form of GAR_REVENUE and GAR_CAPEX indicators. For investments in insurance companies, green investment ratios (GIRs) in the form of GIR_REVENUE and GIR_CAPEX ratios were adopted in place of revenue (REVENUE) and capital expenditures (CAPEX). In the absence of a GIR for a particular insurance company, the Green Underwriting Ratio (GUR) was adopted.

Financial undertakings are defined in Article 1(8) of the Disclosures Delegated Act. Undertakings that provide other financial services but meet the criteria in this definition were considered non-financial undertakings. The classification was made on the basis of the Bloomberg service, based on detailed subsectors within the Financials sector.

Undertakings covered by Articles 19a and 29a of Directive 2013/34/EU, i.e., those subject to non-financial reporting obligations, were determined based on data from external services. For undertakings in Poland, the Instrat Foundation database was used. For undertakings from other countries, the Bloomberg service was used, with the assumption that an undertaking with more than 500 employees, according to the Bloomberg service, is covered by the non-financial reporting obligation. No additional verification was made in this regard.

In reporting the breakdown of the KPI numerator by environmental objective, transition and enabling activities were reported without the breakdown of climate objectives (climate change mitigation, CCM and climate change adaptation, CCA). The data comes from the Bloomberg service. The PZU Group works with ESG data providers regarding the completeness and quality of the data. The PZU Group will endeavor to report transition and enabling activities by climate and environmental objectives in the following years as part of the KPI numerator breakdown.

The data for the item Loans receivable from clients were prepared by the banks in the PZU Group included in the consolidated report. The data were prepared in accordance with the rules set forth in Annexes V–VI to the Disclosures Delegated Act.

For the purposes of calculating in their KPIs EU Taxonomy-aligned exposure to other undertakings, financial undertakings themselves do not have to comply with the minimum safeguards, due to the fact that financing activities are not EU Taxonomy-eligible. Each undertaking that the PZU Group invests in determines and reports on its own whether it meets the minimum safeguards. An undertaking can only consider its activities to be EU Taxonomy-aligned if it meets the minimum safeguards. If an undertaking reports that a certain percentage of its activities is EU Taxonomyaligned, it means that it meets the minimum safeguards. PZU SA Group does not perform any additional verification.

In accordance with Annex IX to the Disclosures Delegated Act, the additional disclosures distinguished the proportion of the investments held in respect of life insurance contracts where the investment risk is borne by the policy holders and the proportion of remaining investments. The investments held in respect of life insurance contracts where the investment risk is borne by the policyholders include unit-linked prodcuts („UL”).

As indicated above, the look through approach was applied, taking into account all investments held in the portfolios of investment funds whose participation titles or units are held in the portfolios of ULs.

As indicated above, real estate, which is included in the following asset items on the balance sheet, was analyzed for alignment with the EU Taxonomy:

• property, plant and equipment;
• assets held for sale.

It has been assumed that real estate-specific indicators will be used to assess real estate alignment with the EU Taxonomy, rather than revenue (REVENUE) or capital expenditures (CAPEX), which real estate does not have. Real estate has its own criteria and indicators for alignment with the EU Taxonomy. Investments are shown on a look-through approach basis, so the relevant investments are real estate (buildings) that are owned by individual companies in the PZU Group, including special purpose vehicles owned by the PZU FIZAN Sektor Nieruchomości 2 fund.

The EU Taxonomy alignment rate calculated for the real estate is shown under both revenue (REVENUE) and capital expenditures (CAPEX) items.

In the absence of currently formed standards for analyzing the EU Taxonomy, it was decided to test alignment with the EU Taxonomy only for existing buildings. Buildings under construction were found to be not EU Taxonomy-aligned.

In the criteria that refer to the erection of buildings before or after 31.12.2020, the date of submission of the building permit application was considered the “date of construction.”

Only those buildings that have already obtained an occupancy permit or other decision with similar effect were evaluated, even if it applies only to a small part of the building. Warehouse parks were similarly assessed. It was also conservatively assumed that if even one of the buildings in the warehouse park did not meet the requirements of the EU Taxonomy, the entire warehouse park was assessed as not EU Taxonomy-aligned.

The following guidelines and assumptions were adopted for the analysis of the energy demand criterion for buildings constructed before 31.12.2020. In Poland, energy demand classes are not used in energy certificates, so this criterion is checked before answering the question “Does the building belong to the 15% of the most efficient buildings (residential or nonresidential, respectively, for buildings constructed before 31.12.2020) in the country in terms of primary energy demand (PED)?”. For all types of real estate, including office, warehouse and retail buildings erected before 31 December 2020, this criterion is met:

• up to 15% of the most efficient buildings (criterion for Objective 1 – climate change mitigation) if PED (EP) < 118.26 kWh/m² per year.
• up to 30% of the most efficient buildings (criterion for Objective 2 – climate change adaptation), if PED (EP) < 155 kWh/m² per year.

In a situation where a building has several energy certificates associated with different tenants, for example, such a building will meet the primary energy requirements if each of its parts meets the requirements.

The following guidelines and assumptions were adopted for the analysis of the energy demand criterion for buildings constructed after 31 December 2020. For all types of real estate, including office, warehouse and retail buildings erected after 31 December 2020, this criterion is met:

• at least 10% less than the threshold (criterion for Objective 1 – climate change mitigation) if PED (EP) < 108 kWh/m² per year.
• does not exceed the threshold (criterion for Objective 2 – climate change adaptation) if PED (EP) < 120 kWh/m² per year.

For buildings larger than 5,000 m²:

• Has the building undergone air leakage and thermal integrity testing by a certified company? And Have the results of these tests been shared with clients/tenants?
• Has the global warming factor been calculated?

The following guidelines and assumptions were made for the criterion on building management systems. The issue applies only to large non-residential buildings equipped with heating systems, ventilation systems, airconditioning systems with an effective rated of more than 290 kW. For these buildings, it is determined whether they have evidence of efficient operation, e.g., there is a building automation and control system in place or there is an energy efficiency improvement contract. It was assumed that a building meets this criterion if it has a modern BMS (Building Management System). “Modern BMS” was identified as that defined by CBRE standards as Class A.

Energy efficiency improvement is understood as any action that systemically reduces energy consumption, e.g. replacing lighting with LEDs, introducing motion sensors, increasing insulation in facades. Such improvement must be carried out every year for this criterion to be considered met in a given year.

The following guidelines and assumptions were adopted for the criterion on adaptation of real estate to climate change. To meet this criterion, it is necessary to confirm that the real estate is located not in a floodplain. If the due diligence report on the real estate or the local spatial development plan indicates that the real estate is located in a floodplain, the criterion is not met. When analyzing whether the real estate is located in a floodplain, flood maps available from the PZU Risk Department or available on a geoportal and records of local plans may also be used, if such factors are indicated.

The following guidelines and assumptions for the fossil fuel criterion were adopted. It was analyzed whether the real estate was specifically built/prepared for fossil fuel storage or fossil fuel energy production for further sale to end users. If that were the case, it could not be considered EU Taxonomy-aligned. The storage of fuels processed from fossil fuels, e.g., diesel fuel, does not make the real estate not EU Taxonomy-eligible. The decisive factor is whether the fuel in question is fossil and occurs naturally in that form in the environment. The storage of fossil fuels for the undertaking’s own activities does not preclude the real estate’s alignment with the EU Taxonomy, provided that the warehouse/ building in which these fossil fuels are stored was not built exclusively for such purposes. In the event that it was built solely for such a purpose and not for any other purpose, then it cannot be considered EU Taxonomyaligned. On the other hand, such a facility where there may be a need to store fuels, e.g., to ensure the operation of on-site energy generation equipment (e.g., for heating or operation of fire systems), was considered EU Taxonomy-eligible.

The following approach was adopted in terms of minimum safeguards in the study of real-estate alignment with the EU Taxonomy. For the evaluation of the EU Taxonomy’s criterion on human rights due diligence process, it was based on the acquired information and declarations in this regard from the manager of the real estate in question. In the case of the EU Taxonomy’s criterion on preventing corruption, fair competition and preventing violations of tax law, the information was obtained from the real estate owner, which is a PZU Group company.

PZU, PZU Życie and closed-end investment funds managed by PZU TFI, of which PZU and PZU Życie are the only participants (PZU FIZAN BIS 1 and PZU FIZAN BIS 2), as part of their investment activities, finance through loans or debt purchases external entities that build wind farms or other RES installations. Loans are granted at the level of special purpose vehicles (“SPVs”) established for a given investment.

The entities making the RES investment in question were asked whether they meet the technical screening criteria (TSC) for RES energy production and the minimum safeguards for this activity. The question was based on a breakdown of EU Taxonomy-aligned, EU Taxonomy-eligible and not EU Taxonomy-eligible activities, according to applicable non-financial reporting standards.

To assess the fulfillment of the principle of minimum safeguards, a rule derived from the “Final Report on Minimum Safeguards” of the Platform on Sustainable Finance was adopted, according to which, in the case where one of the shareholders has at least a 50% stake, in order for an investment to be considered EU Taxonomyaligned, this shareholder must fulfill the principle of minimum safeguards. In contrast, if no shareholder had at least a 50% stake, then the SPV itself should fulfill the principle of minimum safeguards.

Most of the SPVs are part of groups that are not covered by Articles 19a and 29a of Directive 2013/34/EU, i.e., they do not prepare non-financial statements and they do not publish data on the alignment of their activities with the EU Taxonomy. Most SPVs did not provide the PZU Group with data in this regard. For those who provided data, with regard to the SPV’s compliance with technical screening criteria and minimum safeguards, the statements of the entities were relied upon and no additional verification was performed.

As stated above, the estimated green investment ratio (GIR) calculated as if the financing of RES projects was included in the KPI numerator was disclosed on a voluntary basis, including those entities that provided data.

Banks (credit institutions) within the PZU Group disclose in their non-financial statements the green asset ratio (GAR) calculated in accordance with Annexes V–VI to the Disclosures Delegated Act. These ratios were published in the banks’ reports.

As indicated above, according to the consolidation method adopted for the purpose of fulfilling the obligations under the Disclosures Delegated Act, companies subject to consolidation are treated as “transparent.” This also applies to Bank Pekao and Alior Bank. Therefore, the banks’ investments are shown in the GIR for the PZU Group. The data for the calculations were provided by the banks in accordance with Annexes IX–X to the Disclosures Delegated Act, in order to effectively carry out the process of consolidating the data into a single GIR. Data on banks – the item of loan receivable from clients – have been included as part of the GIR at the consolidated level.

PZU and PZU Życie are making investments in private equity funds based abroad. Private equity funds, for the most part, are not covered by Articles 19a and 29a of Directive 2013/34/EU, i.e., they are not required to carry out non-financial reporting, and they do not publish data on the alignment of their activities with the EU Taxonomy.

The private equity funds did not use the look through approach. This is justified by the fact that the companies in which these funds make investments are also, for the most part, not required to carry out non-financial reporting. A large portion of both funds and portfolio companies are based outside the EU. Some funds report selected ESG data on a voluntary basis, while, due to the nature of the asset class and PZU’s broad investment mandate, there is a great deal of variation among portfolio funds in reporting, data quality and the level of implementation of ESG policies. Portfolio funds differ significantly in the scale of their activities, and consequently have significantly different budgets that can be allocated for ESG monitoring and policy implementation purposes. Nevertheless, the topic of ESG reporting and implementation of best practices is an important issue that the private equity market is slowly beginning to grapple with. The scale of the fund’s activities has a direct impact on the pace of changes and new procedures in the ESG area. Currently, there are no clear guidelines by which an objective assessment can be made of which fund is doing a better job of ESG reporting. In addition, the private equity portfolio has a relatively small exposure in PZU’s investment asset structure. The PZU Group hopes to improve data quality in the years to come.

The ratios for the PZU Group’s nuclear and fossil gas related activities are shown separately for turnover (REVENUE) and separately for capital expenditures (CAPEX). This way of presenting data is due to the fact that non-financial undertakings in which the PZU Group makes investments have also presented their data according to this template.

Due to the lack of available data on eligibility for the EU Taxonomy for the four environmental goals of the specific percentage of turnover and capital expenditures of individual investee undertakings, the following approach was adopted for 2023 reporting.

The following information was verified to determine whether the investee undertaking’s activities are EU Taxonomy-eligible for each of the four environmental objectives:

• whether the issuer is subject to Articles 19a and 29a of Directive 2013/34/EU, i.e. whether it is required to report non-financial information,
• whether the issuer conducts its economic activities in the European Economic Area,
• what is the leading NACE code (according to the statistical classification of economic activities in the EU) for the issuer’s activities.

If the issuer is subject Articles 19a and 29a of Directive 2013/34/EU, i.e. it is required to report non-financial information, conducts its economic activities in the European Economic Area and the leading NACE code is listed in:

• Annex I to the Environmental Delegated Act for the environmental objective of sustainable use and protection of water and marine resources;

• Annex II to the Environmental Delegated Act for the environmental objective of transitioning to a circular economy;

• Annex III to the Environmental Delegated Act for the environmental objective of pollution prevention and control;

• Annex IV to the Environmental Delegated Act on for the environmental objective of protecting and restoring biodiversity and ecosystems;

a given investee undertaking was deemed 100% eligible for a given environmental objective. Due to the lack of relevant data in Bloomberg service, a simplification has been made by assuming that for entities with NACE codes eligible for the EU Taxonomy, all of the PZU Group’s exposure is eligible for the EU Taxonomy for a given environmental objective.

For issuers that are not subject to Articles 19a and 29a of Directive 2013/34/EU, i.e. not required to report non-financial information, it was assumed that their activities are not eligible for the EU Taxonomy for the four environmental objectives.

For issuers conducting economic activities outside the European Economic Area, it was assumed that their activities are not eligible for the EU Taxonomy for the four environmental objectives.

Where the NACE code for an issuer’s leading activity is not listed in Annexes I, II, III and IV to the Environmental Delegated Act, it was assumed that its activities are not eligible for the EU Taxonomy for the four environmental objectives.

Reported eligibility for a given environmental objective is the quotient of exposure to all investee undertakings eligible for a given environmental objective and assets under management covered by the KPI.

In their 2023 reports, financial undertakings must report the eligibility of a certain activity for the EU Taxonomy for the new activities that were added to the Climate Delegated Act by Regulation 2023/2485.

This was calculated in a manner analogous to determining eligibility for the four environmental objectives, as described above.

Eligibility for the EU Taxonomy for the new activities listed in the Climate Delegated Act by Regulation 2023/2485, was calculated based on the leading NACE codes of the individual investee entities and the exposure to each economic activity. Due to the lack of relevant data in Bloomberg service, a simplification has been made by assuming that for entities with NACE codes eligible for the EU Taxonomy, all of the PZU Group’s exposure is eligible for the EU Taxonomy for a given climate objective.