General information

The EU Taxonomy Regulation establishes an EU classification system – or taxonomy – that provides investors, including financial sector entities and corporates, with uniform criteria specifying which economic activities are considered to contribute to the sustainable objectives of the EU. This should provide non-financial and financial actors with clarity on which of their activities are considered sustainable in order to scale up sustainable investments and thereby contribute to the overall objectives of the EU’s 2018 Sustainable Finance Action Plan and 2020 renewed Sustainable Finance Strategy.

a.s.r. wants to play a leading role in the financial sector when it comes to sustainable business. This means that it strives to make a positive contribution to making society more sustainable. a.s.r. systematically takes into account the ESG effects of its activities, in accordance with its strategy on sustainable business. It does so by setting ambitious targets, developing effective instruments and reporting clearly on the progress and results of its efforts. The EU Taxonomy Regulation provides companies, such as a.s.r., a common EU-wide language for reporting on its efforts. a.s.r. will consider, and where possible include, the taxonomy criteria in its target-setting.

The EU Taxonomy Regulation currently distinguishes six environmental objectives. These objectives are;

• Climate change mitigation;

• Climate change adaptation;

• The sustainable use and protection of water and marine resources;

• The transition to a circular economy;

• Pollution prevention and control;

• The protection and restoration of biodiversity and ecosystems.

For each of these objectives, detailed technical criteria have been developed at EU level. Criteria for the first two (climate-related) objectives were established during 2021, and subsequently complemented to include certain additional (gas and nuclear energy-related) activities. The criteria for the remaining four environmental objectives were adopted on 27^th June, 2023. The taxonomy framework might be supplemented in future with a social taxonomy.

The reporting requirements in accordance with the EU Taxonomy Regulation enter into effect in a phased manner. As per the 2021 financial year, undertakings have begun to report on which of their economic activities are eligible for the EU Taxonomy Regulation. Eligibility does not mean that the activities are, in fact, environmentally sustainable, but rather that they have the potential to be considered or become sustainable, so-called ‘taxonomy aligned’. In order for economic activities to be taxonomy aligned, they must meet the technical screening criteria for substantial contribution to one or more of the EU Taxonomy environmental objectives, while causing no significant harm to the other EU Taxonomy environmental objectives and at the same time respecting minimum safeguards.

For the 2023 reporting year, companies, subject to the disclosure requirements set out in the Non-Financial Reporting Directive (NFRD), which includes EU listed companies, are required to report on the alignment of their activities with the initial two climate-related objectives on which they reported eligibility in the initial two reporting years. They are also required to report on the eligibility of their activities for all six environmental objectives.

For the 2023 reporting year, a.s.r. has assessed whether its economic activities are taxonomy aligned in relation to the applicable two environmental objectives: climate change mitigation and climate change adaptation. a.s.r.’s most relevant economic activities in light of the EU Taxonomy Regulation are its insurance underwriting activities and its investment activities. For its insurance underwriting activities only the objective climate change adaptation applies and for its investment activities both climate change mitigation and climate change adaptation apply. As of 2023, in addition to the reporting on alignment for the initial two environmental objectives, a.s.r. is also required to report on the eligibility of a.s.r.’s investment activities for all six environmental objectives. As the data for the last four environmental objectives was not available over 2023 a.s.r. reports over the first two environmental objectives. 

On 21 December 2023, the European Commission published a draft Commission notice with clarification of certain elements of the EU Taxonomy disclosure requirements. This draft guidance will be finalised later in 2024. Due to the fact that the final version of the guidance may differ from the current draft and the timing and impact of this draft guidance on current interpretations, it was impractical for a.s.r. to apply this draft notice for the Annual Report 2023. The main clarification concerned the disclosure for conglomerates. This would have resulted in the disclosure of the EU Taxonomy KPI’s for each of the main a.s.r. activities such as insurance, asset management, investment management and banking including a disclosure for the total KPI of a.s.r. group. Instead for 2023, a.s.r. presents all investment activities under the insurance KPI, a.s.r.'s most relevant economic activity, in line with the disclosure for the previous year.

Minimum safeguards

Minimum safeguards are due diligence and remedy procedures implemented by a company in order to ensure alignment with minimum standards with respect to human and social rights, as set out in the UN Guiding Principles on Business and Human Rights (UNGP) and the OECD Guidelines for Multinational Enterprises. The UNGP specify a standard of conduct for businesses to prevent human rights violations and to address any potential risks resulting from the economic activities that businesses conduct and include the principles and rights set out in eight of the ten fundamental conventions identified in the International Labour Organization (ILO) Declaration of the Fundamental Principles and Rights at Work and the International Bill of Human Rights.

The OECD Guidelines for Multinational Enterprises bring together all thematic areas of responsible business conduct and responsible supply chain management. It also recommends that enterprises apply good corporate governance practices, including due diligence as set out in the OECD Principles of Corporate Governance. The UN Guiding Principles on Business and Human Rights specify a standard of conduct for businesses to prevent human rights violations and to address any potential risks resulting from the economic activities that businesses conduct.

The scope of the due diligence and remedy procedures with respect to adherence with human rights, and with respect to anti-bribery and corruption includes the value chain of a.s.r. The scope relating to taxation and fair competition is limited to a.s.r.’s own operations. For a.s.r.'s underwriting activities and for the assets managed by a.s.r. itself, a.s.r. mainly relies on its own due diligence and remedy procedures. For assets managed by third parties, such as investments in equity and debt instruments, a.s.r. mainly relies on the reported data by those third parties on Taxonomy alignment, which implies meeting the minimum safeguards.

a.s.r. is conscious of the fact that expectations with respect to due diligence and remedy procedures in accordance with the minimum safeguards are evolving and will be raised over time. In order to meet expectations and to comply with the minimum safeguards, a.s.r. will further enhance its due diligence and remedy procedures.

KPI related to underwriting activities

The KPI related to underwriting activities is limited to the non-life insurance business. The table below shows the reconciliation of total insurance contract revenue as reported in the consolidated income statement to total non-life insurance contract revenue in scope of the EU Taxonomy Regulation.

Below, the taxonomy alignment disclosures of a.s.r.’s underwriting activities. For the aligned products and certain eligible products it was not yet feasible to determine the data concerning insurance contract revenue at the required level of climate related perils. For these products no alignment or eligibility was reported. If a.s.r. had reported on coverage level, conform previous reporting year, eligibility would have been 21% and alignment 1%.

The alignment of non-life insurance underwriting activities is determined as follows:

• The insurance contract revenue in scope of the EU Taxonomy is based on the following lines of business as defined under Solvency II: 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 EU Taxonomy Regulation;

• The underwriting activities are only covered by the environmental objective climate change adaptation;

• The related underwriting activities cover at least one of the climate-related calamities as described in the Climate 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 calamity 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;

• The eligible insurance contract revenue of underwriting activities is measured as the amount that covers climate related perils. The non-life portfolio acquired through the acquisition of Aegon NL is non-eligible as the insurance contract revenue was not allocated to the climate related perils;

• When an activity fulfils the technical screening criteria set out in the EU Taxonomy Regulation, does not significantly harm to any of the other environmental objectives and fulfils the minimum safeguards, it is considered aligned with the EU Taxonomy Regulation.

KPI related to investment activities

Investments directed at funding or associated with economic activities as described in the delegated acts are considered taxonomy eligible. Eligible investments are aligned when they substantial contribute to one or more of the EU Taxonomy environmental objectives, cause no significant harm to the other environmental objectives, while at the same time respecting minimum safeguards.

Below, the reconciliation of total assets to total investments covered by the EU Taxonomy Regulation.

• ¹ Investments includes investments related to direct participating insurance contracts. Assets not qualifying as investments are mainly cash and cash equivalents relating to direct participating contracts and cash collateral received.
• ² Other represents intangible assets, deferred tax assets, reinsurance contracts, cash and cash equivalents, equipment, associates and joint ventures and receivables and other assets. Assets not qualifying as investments are intangible assets, deferred tax assets, reinsurance contracts, other assets and cash and cash equivalents.

Total assets covered by the KPI represents 75% of total assets. The tables below apply look through, therefore the derivative exposure is different from the amount presented in the balance sheet of a.s.r.

Eligibility

As of 2023, a.s.r. is required to report on the eligibility of a.s.r.’s investment activities for all six environmental objectives. As the data for the last four environmental objectives was not available over 2023 a.s.r. reports over the first two environmental objectives. 

• ¹ Total assets covered by the KPI includes all direct and indirect investments as defined in the EU Taxonomy Regulation with the exception of investments with exposure to central governments, central banks and supranational issuers.
• ² Undertakings not subject to an obligation to publish non-financial information pursuant to article 19a/29a of Directive 2013/34/EU.
• ³ Investments in undertakings in scope of NFRD for which estimated data was used.
• ⁴ Taxonomy eligibility is based on the investments covered by the KPI.

Investments                                                                                                                

The investments covered by the EU Taxonomy Regulation include investments on behalf of policyholders for an amount of € 30,352 million.

The main activities covered by the taxonomy eligible investments (mandatory and voluntary) relate to:

• Acquisition and ownership of buildings and construction of new buildings;

• Non-life insurance: underwriting of climate-related perils;

• 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;

• Reinsurance;

• Passenger interurban rail transport and infrastructure for rail transport;

• 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.

Included within investments are mortgage loans and other loans. The main activities covered by the taxonomy-eligible investments within mortgage loans concern the funding of acquisitions and the ownership of buildings and renovation of existing buildings. Other loans are considered non-eligible.

Within investments is included the investment in the ASR Dutch Farmland Fund (€ 1,679 million) which is managed by ASR Real Estate B.V. Farmland is considered taxonomy non-eligible since activity relating to the acquisition and ownership of agricultural land is currently not included in the delegated acts.

Own property, investment property and plant

Plant consists of wind farms and solar parks. The eligible activities within own property, 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.

Alignment

Below are the taxonomy alignment disclosures of a.s.r.’s investment activities for the first two environmental objectives: climate change mitigation and climate change adaptation. Voluntary disclosures in the tables below are based on reported data from investees, not in scope of NFRD, reporting on a voluntary basis. The voluntary disclosure had no impact on the mandatory disclosures.

Within value of exposures to other counterparties and assets is included an amount of € 12,827 million for certain investment funds and illiquid investments not in scope of NFRD for which no data was available for the required breakdown of the denominator.

Investments

The main activities covered by taxonomy aligned investments (mandatory and voluntary) relate to:

• 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;

• Acquisition and ownership of buildings and construction of new buildings;

• Manufacture of low carbon technologies for transport;

• Infrastructure for rail transport;

• Non-life insurance: underwriting of climate-related perils;

• 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;

Included within investments are mortgage loans and other loans. The main activities covered by taxonomy aligned investments within mortgage loans concern the funding of acquisitions and the ownership of buildings.

Own property, investment property and plant

The aligned activities within own property, investment property and plant relate to the acquisition and ownership of buildings, electricity generation using solar photovoltaic technology and from wind power.

Nuclear energy and fossil gas related activities

From 2023 onwards, a.s.r. is also required to provide transparency regarding investments in gas and nuclear activities, as outlined in the Taxonomy Regulation Complementary Delegated Act. The following templates, as mandated by the EU Taxonomy Regulation, indicate whether a.s.r. has made investments in activities related to gas and nuclear sectors.

The following templates provide more Taxonomy information on the amount of investments in specific activities for climate change mitigation and climate change adaptation, both turnover-based and capital expenditures-based. The information, presented in total investment amounts and percentages, constitute the mandatory reporting basis and excludes any voluntary reporting.

The template below shows the exposures in Taxonomy-aligned economic activities in the denominator for nuclear energy and fossil gas related activities. This means that the percentages represent the amount of investments divided by the total assets covered by the KPI.

The template below demonstrates exposures in the same activities but this time for the numerator, meaning that the percentages represent the total amount of investments divided by the total amount of Taxonomy-aligned economic activities.

The templates below represent exposures in the amount and proportion of Taxonomy eligible but not Taxonomy-aligned economic activities and the Taxonomy non-eligible economic activities for nuclear energy and fossil gas related activities respectively.

Currently, the taxonomy alignment percentage only covers the first two (climate-related) environmental objectives. As a result of the phased entry into force of CSRD requirements, gradually more companies will report on the taxonomy alignment of their economic activities. As a result, data availability on taxonomy alignment will increase and should allow a.s.r. to enhance the quality of its taxonomy disclosure over time.

Measurement

Investment activities are accounted for using the same valuation principles that are used in the IFRS consolidated financial statements. The alignment is based on the assets held at 31 December 2023.

Key estimates and assumptions

a.s.r. has made efforts to gather the required data for taxonomy eligibility and alignment. 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 they were prepared and are only an indication of the eligibility or alignment of the economic activities undertaken by a.s.r. The assumptions and interpretations used are further disclosed below.

Investment activities

For assets not generating revenue, such as own property, the CapEx based KPI is determined. The Turnover based KPI is set at an equal level to the CapEx based KPI.

Investments

To assess the eligibility and alignment of the investments, a.s.r. makes use of taxonomy data from data-vendors. Data vendors are dependent on the taxonomy information provided by the investee companies and make estimates when data was not available.

• For the disclosures in section alignment, a.s.r. only uses reported data. The voluntary data reported relates to investees not in scope of the NFRD voluntary disclosing taxonomy data.

• For the disclosures in section eligibility, a.s.r. used reported data for its mandatory disclosures and used estimated data for its voluntary disclosures. No reported data was used from investees reporting on a voluntary basis. For the voluntary disclosures, the data-vendors estimated eligibility for investee companies based on the reported revenue and capital expenditure for each industry sector they operate. Revenue or capital expenditure is considered eligible for taxonomy alignment when the portion of company revenue or capital expenditure associated with activities is described in the delegated acts, regardless of whether the revenue or capital expenditure meets any or all of the technical screening criteria as set in these delegated acts. Companies that fail to meet the Do No Significant Harm and Minimum Safeguard criteria established by the EU Taxonomy methodology are excluded from the list of entities identified for potential alignment with the EU Taxonomy Regulation.

The classification of investees into financial and non-financial undertakings was done with data from data-vendors. When no data was available the classification was determined using NACE codes. All codes starting with K, M74.90, N82.91 and O84.30 were considered financial undertakings. When no data was available at all, for certain investment funds and illiquid investments, the investment was categorised under other counterparties and assets, and no eligibility and alignment data was disclosed in the numerator.

The eligibility and alignment of real estate funds is assessed using the economic activities of the underlying assets in that fund. The information used to establish the eligibility and alignment of the real estate portfolio is provided by the fund manager based upon knowledge of the underlying assets and their operation.

Own source information, based on EPC labels (energieprestatiecertificaat) and climate risk monitor, was largely used to establish the eligibility and alignment of the mortgage loans (e.g. mortgage agreements). The information for mortgage funds managed by third parties was provided by the fund managers.

Own property, investment property and plant

Own source information was used to establish the eligibility and alignment of the real estate portfolio, such as knowledge of the underlying assets and operation.

Underwriting activities

a.s.r. offers its underwriting activities both directly and through the intermediary channel via independent advisors and mandated agents. Own source information was used to determine eligibility and alignment for the insurance contract revenue of P&C for insurance policies sold through direct distribution channels and through advisors. For policies sold by mandated agents as well as co-insurance underwriting activities, no detailed information was available, and the same portfolio composition was therefore assumed as for the portfolio held by advisors.

Description of compliance with the EU Taxonomy Regulation

a.s.r. complies with the current scope of the EU Taxonomy Regulation for the 2023 financial year.

Our product design strategy takes climate-related risks into account, which become even more predominant in the mid and long term. Climate risks are monitored regularly, including their impact on a.s.r.’s pricing policy, acceptance policy, product development, claims handling and means of communication.