The Taxonomy Regulation (Regulation EU 2020/852) is a classification system that provides investors, companies and financial institutions with a standardised definition of which economic activities are considered to be ecologically sustainable. Its purpose is to facilitate sustainable finance, protect against ‘green washing’ and helps companies become more focused on sustainability.
a.s.r. wants to play a leading role in the financial sector when it comes to sustainable business. This means that a.s.r. strives to make a positive contribution to making society more sustainable. In a.s.r.’s climate policy, the organisation systematically takes into account the climate effects of its activities. It does so by setting clear targets, developing instruments and reporting clearly on the progress and results of its efforts. The Taxonomy Regulation gives a.s.r. an universal language for reporting on its efforts. a.s.r. will consider, and where possible include, the Taxonomy criteria in its target-setting.
For the reporting year 2022 the Taxonomy Regulation requires large companies to report on the taxonomy eligibility and as of reporting year 2023 on the taxonomy alignment of their economic activities. An economic activity is eligible when the activity is mentioned in the Climate Delegated Act. (Regulation EU 2021/2139). Eligible activities are aligned with the Taxonomy Regulation when in addition to being mentioned in the Taxonomy, they also meet the criteria for taxonomy alignment. In order for economic activities to be aligned with the Taxonomy Regulation, they must be deemed to substantially contribute to any of the taxonomy’s environmental objectives. They must also cause no significant harm to any of the other Taxonomy Regulation environmental objectives, while at the same time respecting minimum social safeguards.
For 2022, a.s.r. assessed whether its economic activities were taxonomy eligible in relation to the applicable two environmental objectives; climate change mitigation and climate change adaptation. a.s.r.’s relevant economic activities in light of the Taxonomy Regulation are its insurance underwriting activities and investment activities. As of 2022, the Taxonomy Regulation also includes economic activities in gas and nuclear energy. The extended definition of eligibility had no material impact on the eligible disclosure of a.s.r., nor any impact on its strategy.
|(in € millions)||2022|
|||Total GWP||Not in scope of taxonomy|
Total non-life GWP in scope of Taxonomy
The eligibility of non-life insurance underwriting activities is determined as follows:
The gross written premiums (GWP) are part of the non-life lines of business as defined under Solvency II legislation: for a.s.r., these are medical expense insurance, income protection insurance, workers’ compensation insurance, motor vehicle liability insurance, other motor insurance, transport insurance, fire and other damage to property insurance and assistance. As such, the Life insurance business and the Health insurance business under Disability are not in the scope of the Taxonomy;
The related underwriting activities cover at least one of the climate-related perils as described in the delegated act. Within Non-life, these mainly concern heat waves and wildfires, wind-related calamities such as storms, water-related calamities such as flooding and heavy precipitation and hail;
The climate-related hazard is explicitly mentioned in the policy terms and conditions. Health and Disability do not have these explicit terms and conditions and are therefore non-eligible;
In summary, a.s.r. considers the following non-life insurance activities as eligible: other motor insurance, transport insurance and fire and other damage to property insurance;
The eligible GWP of insurance underwriting activities is measured at coverage level within a product. If a climate-related calamity is included within the coverage of a non-life insurance product, the full GWP of that coverage is considered taxonomy-eligible.
|(in € millions)||2022|
% of total GWP
|Taxonomy non-eligible economic activities||2,502||74%|
|Taxonomy eligible economic activities1||885||26%|
Investments directed at funding or associated with economic activities as described in the Climate Delegated Act are considered taxonomy eligible.
The main activities covered by the taxonomy-eligible investments relate to:
Manufacture of renewable energy technologies, equipment for the production and use of hydrogen and other low carbon technologies;
Installation, maintenance and repair of energy efficiency equipment, charging stations for electric vehicles in buildings and parking spaces attached to buildings, instruments and devices for measuring, regulating and controlling the energy performance of buildings or renewable energy technologies;
Non-life insurance and reinsurance: underwriting of climate-related calamities;
Manufacture of low carbon technologies for transport;
Electricity generation using solar photovoltaic technology, concentrated solar power (CSP) technology, wind power, ocean energy technologies, hydropower, geothermal energy, renewable non-fossil gaseous and liquid fuels or bio-energy. Co-generation of heat/cool and power from solar energy, geothermal energy, renewable non-fossil gaseous and liquid fuels or bio- energy;
Data-driven solutions for GHG emissions reductions;
Acquisition and ownership of buildings;
Infrastructure for rail transport;
Transmission and distribution of electricity.
The investments covered by the Taxonomy Regulation include investments on behalf of policyholders and investments relating to investment contracts for an amount of € 11.857 million.
|(in € millions)||31 December 2022|
|||Total assets||Assets not qualifying as investments||Investments not covered by the Taxonomy|
Total investments covered by the Taxonomy
|(Investment) property and plant2||1,259||-||-||1,259|
|Loans and receivables||17,171||605||221||16,345|
|(in € millions)||31 December 2022|
% of total investments covered1
|Investments in undertakings that are not in scope of NFRD2||15,433||31%|
|Taxonomy non-eligible economic activities||10,816||22%|
|- based on readily available information (mandatory)||2,343||5%|
|- based on estimates (voluntary)3||8,473||17%|
|Taxonomy eligible economic activities4||18,151||36%|
|- based on readily available information (mandatory)||13,574||27%|
|- based on estimates (voluntary)3||4,577||9%|
|Total investments covered by the Taxonomy||49,843||100%|
|Investments not covered by the Taxonomy|||||
|Exposure to central governments, central banks and supranational issuers||11,158|||
Within investments is included the investment in the Dutch Farmland fund (€ 1.728 million) which is managed by ASR Real Estate B.V. Farmland is considered taxonomy non-eligible since activity relating to agriculture is not currently included in the Climate Delegated Act.
The eligible activities within (investment) property and plant relate to the acquisition and ownership of buildings, construction of new buildings, renovation of existing buildings, electricity generation from wind or solar power, and (to some degree) forest management.
Eligible activities under loans and receivables relate to mortgage loans. The main activities covered by the taxonomy-eligible investments within mortgages concern the funding of acquisitions and the ownership of buildings, the construction of new buildings and the renovation of existing buildings. Other loans were considered non-eligible.
Investment activities are accounted for using the same valuation principles as used in the IFRS consolidated financial statements.
When estimates and proxies are used, disclosures under the Taxonomy Regulation may not be classified as mandatory and are classified as voluntary.
a.s.r. has made efforts to gather the required data for taxonomy eligibility. Due to uncertainties in legislation and limitations in the availability of data at the time the Annual Report was being prepared. a.s.r. has to some extent used interpretations, estimates and assumptions to arrive at the required disclosures. The disclosures made therefore represent a snapshot at the time the disclosures were prepared and are only an indication of the eligibility of the economic activities undertaken by a.s.r. The assumptions and interpretations used are further disclosed below.
To assess the eligibility of the investments, a.s.r. is often dependent on the taxonomy information provided by the investee companies. In most cases, this information was not readily available. a.s.r. has therefore used alternative input, such as taxonomy data from data-vendors. The data-vendors estimated eligibility for investee companies based on the reported revenue for each industry sector they operate in which they then mapped with the Taxonomy Regulation using NACE codes.
Information on the underlying investments for third-party managed funds was not always available. For the underlying activities of investment funds for which no information was available, a.s.r. made an assessment of whether these investments were classified as investments in undertakings that were not in the scope of the NFRD. The remaining investments were classified as taxonomy non-eligible. Their impact is expected to be limited.
The eligibility of real estate equity funds is assessed using the economic activities of the underlying assets in that fund. Own source information was used to establish the eligibility of the real estate portfolio, such as knowledge of the underlying assets and operation. The information relating to external real estate equity funds was provided by the fund manager.
Own source information was largely used to establish the eligibility of the mortgages (e.g. mortgage agreements). The information for external mortgage funds was provided by the fund manager.
a.s.r. offers its underwriting activities both directly and through the intermediary channel via advisors and mandated agents. Own source information was used to determine eligibility for the insurance premium of P&C for insurance policies sold through direct distribution channels and through advisors. For policies sold by mandated agents, no detailed information was available, and therefore the same portfolio composition was assumed as for the portfolio held by advisors.
a.s.r. complies with the current scope of the Taxonomy regulation for the 2022 financial year.
For the 2023 financial year onwards, the Taxonomy Regulation will require that companies report on taxonomy alignment instead of eligibility. It is currently not clear whether the taxonomy alignment regarding the financial year 2023 will also cover the four remaining environmental objectives as the delegated acts are still being developed.
The Taxonomy Regulation and its delegated acts will be regularly reviewed and updated by the European authorities, with the possibility of revising and/or complementing the list of environmentally sustainable activities, their criteria and the further development of the taxonomy classification system, including an anticipated scope expansion to include social objectives.
The Corporate Sustainability Reporting Directive (CSRD) will replace the NFRD from the 2024 reporting period onwards. It is too early to determine the impact of this change on the taxonomy disclosure of a.s.r.