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Policies related to climate change mitigation and adaptation
In response to the evolving regulatory environment and new sustainability reporting guidelines, PZU Group implements climate policies at both central level and within individual subsidiaries, covering various elements of the value chain.
These policies focus on reducing environmental impact, adapting to climate change, and supporting the energy transition and low-emission economy. The policies introduced are developed in accordance with the European Sustainability Reporting Standards (ESRS), the Paris Agreement provisions, and best market practices.
Policies implemented in PZU Group address key areas such as:
climate change mitigation, by reducing greenhouse gas emissions in own operations and investment portfolios;
climate change adaptation, through the development of products that support clients in managing climate risks;
energy efficiency by implementing technologies that reduce energy consumption in buildings and operational processes;
development of renewable energy sources, including promoting investments in green technologies;
raising awareness among employees and stakeholders about the importance of sustainability.
Intensifying its climate change mitigation ambitions, PZU and PZU Życie have adopted the PZU Group Decarbonization Strategy. The strategy includes assumptions for decarbonization targets in three key areas: non-life insurance, own investments, business banking. It serves as the foundation for PZU Group’s transition plan and guides decarbonization actions for the coming years.
The PZU Group is developing sector-specific documents to support climate change ambitions and actions at the level of individual companies. Among others, in the area of own investments and business banking, a key role is played by „PZU and PZU Życie Sustainable Investment Policy” and „Sustainable Finance Framework of Pekao Bank”, which serve as specialized instruments addressing impacts, risks, and opportunities arising from activities within various value chain elements.
The „Sustainable Investment Policy” supports capital allocation in line with ESG criteria, reducing exposure to high-emission sectors and expanding investments in green bonds. Meanwhile, the Pekao Bank Framework defines financing criteria for sustainable projects and green bond issuances, supporting the energy transition in line with international standards, such as the Green Bond Principles.
The policies implemented across PZU Group form a coherent framework for managing environmental issues, supporting the pursuit of climate neutrality and enhancing operational standards throughout the entire value chain. Further details on specific policies within the Group are available below.
PZU Group Environmental Policy
PZU Group supports initiatives aimed at reducing environmental impact, while simultaneously considering the energy transition and a broad approach to sustainability. One of the key aspects underpinning this direction is the „PZU Group Environmental Policy”. Adopted in 2021, it serves as a substantive summary of key principles and practices within the Group’s environmental initiatives. In 2023, PZU Group made a key decision to update the fundamental principles, which are applied crosssectionally across own operations, supplier cooperation, and downstream value chain elements (the value chain is described in detail in the section „Material Impact, Risks, and Opportunities„). The updated „PZU Group Environmental Policy” was revised to define principles addressing the most important sustainability issues, including minimizing greenhouse gas emissions, improving energy efficiency, managing natural resources. The 2023 update of the policy also incorporates one of the most significant climate commitments—compliance with Paris Agreement standards, which support improved energy efficiency, reduction of greenhouse gas emissions across the supply chain, raising employee awareness of environmental responsibility. These measures contribute to limiting global warming to 1.5 degrees Celsius.
Detailed information on climate change policies
The following summary serves as a technical overview of the policies, regulations, and codes that were used to describe the previous sections of the Environmental section:
PZU Group Environmental Policy
The „Environmental Policy” covers own operations, supplier cooperation, and downstream value chain elements. The document defines principles for minimizing greenhouse gas emissions, managing natural resources, implementing international standards, such as the Paris Agreement. The policy requires entities to consider environmental aspects in strategic decision-making and reduce negative environmental impacts in operational activities. Implementation includes energy efficiency initiatives in office buildings and reduction of CO2e emissions in the supply chain. The policy’s execution is centrally monitored by designated Management Board members, and key information is published on corporate websites.
PZU Group Decarbonization Strategy
The „PZU Group Decarbonization Strategy” is the latest foundation of the Group’s climate policy, outlining directions for decarbonization targets for PZU Group’s, covering assumptions in this regard for PZU Group banks, financed CO2e emissions (Scope 3, Category 15). The document covers a significant portion of the Group’s portfolios, setting assumtions for: hard reduction targets, soft engagement targets, soft hedging and transition financing targets.
The assumptions for the targets of individual value chain components were developed based on best market practices, including the NZAOA methodology, taking into account IPCC climate scenarios. These assumptions include reducing greenhouse gas emissions in key sectors and supporting value chain decarbonization, ensuring alignment with strict pathways to limit global warming to 1.5°C, according to the best available analyses.
As part of the recommended NZBA targets for banks within PZU Group, the AIA 2050 methodology was applied. This framework provides financial institutions with guidelines for aligning credit and investment portfolios with Net Zero by 2050.
The Decarbonization Strategy will serve as the foundation for PZU Group’s future transition plan and decarbonization targets.
Standalone policies
PZU and PZU Życie Sustainable Investment Policy
This policy covers own investments and defines capital allocation principles in line with ESG criteria. Its key provisions include reducing exposure to high-emission sectors, investing in green bonds, and introducing negative screening for the coal sector. The document promotes investments supporting environmental and climate goals and assumes active ESG risk management in investment portfolios. The key contents of the policy are publicly available.
Bank Pekao Credit Risk Strategy and Policy
The ESG Strategy of Bank Pekao integrates credit and investment risk management, considering climate change mitigation and adaptation to its effects. ESG risks are embedded in the credit process, tailored to client segments and transaction types, and their assessment influences the Bank’s financial decisions.
The credit risk policy, approved by the Management Board, complements the Credit Risk Strategy, adopted by the Supervisory Board, and defines the bank’s approach to ESG risk integration. It includes the exclusion of financing for new coal-based projects and the limitation of exposure to high-emission sectors, except for financing supporting the energy transition.
The bank has implemented strategic limits for green financing and monitoring mechanisms for high-emission exposures, including CO2 intensity in credit and investment portfolios. ESG risk management is subject to internal bank regulations as well as guidelines from the Polish Financial Supervision Authority and the European Banking Authority.
The Strategy and Development, Risk, and ESG departments supervises the implementation of this strategy, supporting the reallocation of financing toward low-emission sectors and sustainable investments.
Sustainable Finance Framework at Pekao Bank
The Sustainable Finance Framework at Pekao Bank applies to business banking operations and defines qualification criteria for sustainable projects, including the financing of green bonds and renewable energy projects. The bond issuance framework complies with international standards, such as the Green Bond Principles and Social Bond Principles, and its implementation supports the transition to a lowemission economy. The framework promotes transparency in reporting on financing outcomes and collaboration with business partners in achieving environmental goals. The Bank Pekao Management Board oversees implementation, and the document is publicly available.
PZU Group entities that do not yet have the relevant policies are currently in the process of developing and adopting them. The transition plan for Alior Bank Group is expected to be published in 2027.
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Actions and resources related to climate change
In 2024, PZU Group implemented initiatives aimed at achieving its climate-related ambitions.
At the same time, alongside the development of the Group’s Decarbonization Strategy, PZU actively prepared for the intensification of actions in the coming years. The strategy aims to strengthen engagement within three key value chain elements: non-life insurance, own investments and business banking. In the upcoming year, PZU Group plans to further intensify its efforts, introducing new initiatives and solutions supporting the climate transition.
PZU Group’s decarbonization activities aim to reduce greenhouse gas emissions and support the transition to a low-emission economy. Key actions include:
- optimization of operational processes – PZU Group undertakes actions to reduce energy consumption in offices and branches, including the modernization of heating systems, implementation of energy-efficient LED lighting, and the introduction of energy management systems. These initiatives aim to reduce the carbon footprint of operational activities
- reduction of resource consumption – introduction of solutions aimed at reducing water, paper, and other consumable materials. For example, the modernization of the vehicle fleet to low-emission models (EURO 6 and hybrids) directly contributes to reducing mobility-related CO2e emissions
- investment in low-emission technologies – PZU Group entities invest in low-emission technologies within their investment portfolios, including supporting and financing projects related to renewable energy sources. These investments contribute to the energy transition and the reduction of greenhouse gas emissions in investment portfolio
- financing sustainable development – through TFI PZU, PZU Group actively invests in financial products supporting the transition to a low-emission economy. These investments include green bonds and support for the development of low-emission technologies
- education and internal engagement – Training sessions and webinars for employees, as well as the implementation of internal pro-ecological policies, are also an important element of decarbonization. Increasing environmental awareness among employees and aligning processes with sustainability principles in daily operations supports the broad integration of decarbonization efforts
The implementation of actions within PZU Group takes place at the level of individual entities and may vary slightly depending on specific company regulations and internal policies. Due to the lack of specific decarbonization targets for its own operations, the PZU Group did not convert implemented activities into expected and achieved reductions in greenhouse gas emissions.
PZU Group’s actions are directly linked to the characteristics of individual value chain components and their related business activities. The breakdown of specific actions aims to effectively address material impacts, risks, and opportunities associated with each element.
In response to the growing renewable energy market, PZU Group offers insurance products for corporate clients investing in renewable energy sources (RES). PZU Wind Energy and PZU Solar Energy products protect wind farms and photovoltaic installations against failures, damages, or destruction. They also protect clients from liability risks and loss-of-profits due to material damage. Both policies cover devices used for energy generation (for PZU Energia Wiatru: nacelles, towers, foundations, internal wiring, and for PZU Energia Słońca: photovoltaic panels, their structures, internal wiring, inverters) as well as the entire accompanying infrastructure.
Additionally, the insurance includes coverage for thirdparty property that a company holds for service provision, which can be purchased by firms installing photovoltaic panels for individual clients. This cooperation supports the dynamic sale of photovoltaic installations while primarily protecting users from potential damages to these systems. For SMEs, the offering also includes third-party liability insurance for environmental damages, such as covering the cost of removing soil contamination from a substance spill.
PZU’s property insurance portfolio includes a product that protects energy-generating equipment from renewable sources. The coverage also extends to owners of photovoltaic installations against risks related to interruptions or reduced efficiency in electricity production. PZU Eko Energia is a solution designed for households, small and medium-sized enterprises, and farm buildings that use photovoltaic cells, solar collectors, or heat pumps for self-consumption energy production. The insurance is available in three variants, allowing the client to choose the best option for their needs. The PZU Eko Energia policy covers photovoltaic installations (including EV chargers and batteries) against all risks, such as loss, damage, or total destruction caused by failure, fire, power surges, flooding, storms, hail, and other extreme weather events, as well as vandalism and theft.
PZU for Housing Communities and Cooperatives is a comprehensive insurance package offered to housing cooperatives, homeowners’ associations, and Social Housing Associations. The policy covers all assets related to real estate management operations, including climate-related risks, such as fire and other natural disasters (flooding, windstorms, lightning strikes, heavy rain, water damage from melting snow, etc.).
To meet the needs of clients who are members of a defined group (e.g., housing communities and cooperatives), the insurance offering has been expanded to include PZU Secure Home. Homeowners and apartment owners can obtain insurance protection for their property and belongings, covering risks such as fire, hurricanes, flooding, water damage, explosions, power surges, and vandalism.
TFI PZU, which manages the majority of PZU Group’s own investments, carries out investments based on the appropriate regulations of entities providing assets. Proenvironmental actions and internal regulations of Group entities support green investments.
Pekao Group and Alior Bank have developed carbon footprint calculators, enabling corporate clients to analyze greenhouse gas emissions and create CO2e reduction plans.
These groups have also implemented ESG limits in credit portfolios and conducted scenario analyses assessing transition and physical climate risks.
For the Pekao Group, the most important activities to increase its commitment to sustainability financing, including solutions that address material issues related to mitigating or supporting adaptation to climate change, and respond to the rapidly evolving needs of the market, included, in particular, green financing for a rounded amount of PLN 13.738 billion and new sustainable financing for PLN 12.697 billion. In addition, the Pekao Group, prepared the first report on the allocation of funds under the EMTN series issued in 2023 for a total nominal amount of 500 million euros.
At the same time, Pekao Group completed the calculation of financed CO₂e emissions under Category 15 (Scope 3), covering corporate client credit portfolios in the energy and industrial sectors.
In the area of life and health insurance, PZU Group is initiating actions related to the materiality of risks arising from climate change in the life and health insurance sector.
In non-life insurance, despite the lack of assigned budget allocations for capital expenditures (CAPEX) and operating expenses (OPEX), PZU Group continued the implementation of actions aligned with strategic directions and internal regulations. In operational activities, initiatives were undertaken in the areas of energy efficiency in real estate, resource consumption optimization, fleet modernization, supplier collaboration, and educational activities.
In own investments, decisions within PZU Group regarding individual actions are analyzed and made at the time of their implementation.
In business banking, Pekao Group’s ability to implement actions related to climate policies and sustainability largely depends on the availability and allocation of resources, including capital expenditures (CAPEX) and operating expenses (OPEX). According to Commission Delegated Regulation (EU) 2021/2178, these expenditures are not assessed for compliance with the sustainability criteria of the EU Taxonomy. Additionally, operating expenses incurred by the bank under its ESG Strategy are considered financially insignificant from the perspective of the unit’s operations, meaning the bank does not assign special attention to them in the context of climate-related actions. Despite the lack of assigned budget allocations for investment and operational expenses, Bank Pekao maintains its action directions as outlined by its strategic directions and internal regulations.
Alior Bank has a dedicated budget allocation exclusively for the RES portfolio. In the case of sustainable financing, no such limitation exists, meaning that available resources depend on the actions undertaken.
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When disclosing information on energy consumption and energy mix, PZU Group provides information on total energy consumption, including information on coal, oil and gas activities and the share of renewable energy in the energy mix. The energy consumption presented relates only to processes that the PZU Group operates or manages. Due to the profile of the PZU Group’s operations, raw materials and fuels that are not burned to produce energy are not included in the statement. The PZU Group also does not use fuel as a raw material. The quantitative information in the table “Energy consumption and energy mix of the PZU Group” refers to energy expressed in megawatt-hours, and this is energy understood as final consumption.
If any of the information in its original form was expressed in a different unit, appropriate conversions to megawatthours were made using appropriate conversion factors. Renewable energy is produced solely for the use of the PZU Group and is reported only as part of energy consumption. This energy is not offset and is not sold to third parties.
The PZU Group does not operate in a sector with a significant climate impact, and therefore does not publish the structure of energy consumption by fossil fuel type.