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 qualify as environmentally sustainable. 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 (EU SFAP) 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 a.s.r. strives to make a positive contribution to making society more sustainable. a.s.r. systematically takes into account the ESG impacts 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, technical screening 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 27th 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 make a substantial contribution to at least one environmental objectives, while doing no significant harm to any of the other environmental objectives and at the same time respecting minimum safeguards. For further information on minimum safeguards, see further down this section.

For 2024, a.s.r. is required to report on the alignment of their activities with the initial two climate-related objectives in line with previous year, and to report on the eligibility of their activities for all six environmental objectives.

For 2024, 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. Also, a.s.r. has assessed which economic activities can be considered as taxonomy eligible for all six environmental objectives.

Changes in presentation

Commission notice

On 8 November 2024, the European Commission (EC) published a Commission notice with clarification of certain elements of the taxonomy disclosure requirements. This guidance serves as recommendations for the legal interpretation and implementation of the taxonomy legislation. This Commission notice states, amongst others, that groups with various activities need to calculate their group alignment percentage based on a weighted average of the relevant activities within the group. The EU Taxonomy Regulation identifies the following types of entities: insurance and reinsurance undertakings, credit institutions, asset managers, investment firms and non-financial undertakings.

For 2023, a.s.r. has reported its taxonomy alignment KPIs in accordance with the insurance templates¹, all a.s.r. activities were included in the insurance templates. For 2024, a.s.r. updated the EU Taxonomy disclosure for the Commission notice and allocated its activities to insurance activities, asset management activities and non-financial activities.

The comparative figures were updated accordingly. This resulted in a 2% increase in the alignment percentage of the investment activities of the insurance KPI, turnover-based as well as capital expenditure-based. There was no impact on the alignment for the non-life insurance underwriting activities.

Sale of Knab

Knab, a credit institution, was sold at 1 November 2024 and therefore a.s.r. did not have any banking activities at year-end. As a result, Knab is not included in the group KPI, nor did a.s.r. prepare the KPI for banking activities.

EU Taxonomy Regulation KPIs

The group KPI for a.s.r. is determined as the sum of the KPI’s of the underlying activities based on the weighted average of revenue of each activity.

Included within revenue are the line items insurance contract revenue, direct investment income, fee income and other income related to the revenue from wind farms and solar parks.

The KPIs for asset managers and non-financial undertakings only contribute to a total of 4% (2023: 3%²) to the taxonomy alignment percentage of The group. As a result, a.s.r. decided to report 0% for these undertakings and not to disclose the related templates.

KPI of insurance undertakings

The insurance KPI consists of the KPI for non-life underwriting activities and for investment activities. The insurance KPI is determined based on the weighted average revenue of both KPI for each of the turnover based KPI and the CapEx KPI as shown in the following table.

• ¹ The life insurance underwriting activities are excluded from this table as these are not in scope of the KPI for insurance and reinsurance undertakings. The revenue relating to life insurance underwriting activities is, however, part of the total revenue for insurance undertakings and is therefore included within the table above ‘Aligned economic activities of a.s.r.’.

• ¹ The life insurance underwriting activities are excluded from this table as these are not in scope of the KPI for insurance and reinsurance undertakings. The revenue relating to life insurance underwriting activities is, however, part of the total revenue for insurance undertakings and is therefore included within the table above ‘Aligned economic activities of a.s.r.’.

KPI of insurance undertakings related to non-life underwriting activities

The KPI related to underwriting activities is limited to the non-life insurance business. The following table 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.

For the purpose of computing Taxonomy alignment, a.s.r. should only use those insurance premiums, or corresponding shares of insurance premiums in case of multi-risk insurance contracts, that pertain to the coverage of climate-related perils. For several products, which also cover climate-related perils, a.s.r. is unable to obtain the data on written premiums related to these climate-related perils. a.s.r. reported those premiums as non-eligible. If a.s.r. had reported on coverage level, eligibility would have been 25% 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 Regulation 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.

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

KPI of insurance undertakings 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 substantially 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.

The table below shows the reconciliation of total assets held by the insurance undertakings as reported in the financial statements to the total assets covered by the KPI of insurance undertakings.

• ¹ Investments includes investments related to direct participating insurance contracts.
• ² Other represents intangible assets, deferred tax assets, reinsurance contracts, cash and cash equivalents, equipment, associates and joint ventures, receivables and other assets.

The investments covered by the EU Taxonomy Regulation include investments held in respect of life insurance contracts on behalf of policyholders for an amount of € 23,794 million (2023: € 21,719 million).

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. Eligibility is based on all six environmental objectives.

For the additional complementary disclosures, including nuclear energy and fossil gas related activities, see appendix 8.4.

The main drivers of the aligned assets are real estate, real estate equity funds, mortgages and mortgage equity funds. The slight increase in alignment percentage of 1% is due to an increase in alignment within all categories. Changes were made to the assets acquired through the acquisition of Aegon NL to align them to the Policy on Responsible Investments.

Investment activities - Investments

The main activities covered by taxonomy aligned investments relate to:

• Acquisition and ownership of buildings;

• 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;

• Transmission and distribution of electricity;

• Manufacture of low carbon technologies for transport.

Investment activities - Own property, investment property and plant

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

Measurement and key estimates and assumptions

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 2024 and the coverage of the insurance policies per 31 December 2024.

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.

Currently, the taxonomy alignment percentage only covers the first two (climate-related) environmental objectives. Due to 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.

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.

The coverage ratio was calculated by dividing investments held by insurance undertaking excluding exposure to central governments, central banks and supranational issuers by investments held by insurance undertakings.

Investment activities - 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. a.s.r. only uses reported data from investees in scope of CSRD.

The classification of investees into financial and non-financial undertakings was done with data from data-vendors. If no data was available the classification was determined using NACE codes. Most codes starting with K and M74.9 were considered financial undertakings. If no data was available, 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, amongst other, 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.

As part of its Taxonomy reporting obligations, a.s.r. is required to disclose its exposure to the six nuclear and gas activities. a.s.r. was able to gather this information based on reported data from the most significant exposures within the energy sector on a.s.r.’s balance sheet (95% coverage). The remaining exposure in the energy sector, and exposures from other sectors, such as financial undertakings, were assumed to be nil.

Investment activities - 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 brokers. 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 brokers 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.

Do no significant harm

Activities that meet the technical screening criteria of (at least) one of the objectives mentioned in the EU Taxonomy Regulation must also meet the ‘do no significant harm’ (DNSH) criterion (i.e. do no significant harm to any of the other environmental objectives).

a.s.r. has used NACE codes registered in its insurance administration systems as the basis for identifying relevant activities in the portfolio. The activities that can be linked to DNSH after this review are excluded from the activities that are covered by the technical screening criteria.

Real Estate and Mortgages has made use of the Climate Risk Monitor to identify whether the activity does no significant harm to the environmental objective climate change adaptation. This is an in-house-developed tool, in which the FCAB drawn up by the DGBC was implemented. For more information, see section 6.2.1.1.

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 (UNGPs) and the OECD Guidelines for Multinational Enterprises. These minimum safeguards are criteria for responsible business conduct within own operations and within the value chain and focus on the following topics:

• Human rights including workers’ rights;

• Anti-bribery and corruption;

• Taxation;

• Fair competition.

The scope of the due diligence and remedy procedures with respect to adherence to human rights, and with respect to anti-bribery and corruption, includes a.s.r.'s value chain. The scope relating to taxation and fair competition is limited to a.s.r.’s own operations. For a.s.r.'s underwriting activities, a.s.r. mainly relies on its own due diligence and remedy procedures. For assets under management, 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. For the assets managed by a.s.r., a.s.r. obtains adequate documentary evidence, such as EU Taxonomy disclosures by the non-financial undertakings, ascertaining that undertakings to which they are exposed to meet the minimum safeguards.

In order to meet expectations and to comply with the minimum safeguards, a.s.r. has further enhanced its due diligence and remedy procedures and will continue to do so.

Description of compliance with the EU Taxonomy Regulation

a.s.r. complies with the current scope of the EU Taxonomy Regulation for the 2024 financial year.

a.s.r.'s product design strategy takes climate-related risks into account, which become even more predominant in the medium 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.

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• ¹Annex IX and X of the commission delegated regulation (EU) 2021/2178.
• ²Knab is excluded from total revenue, for a better comparison with current year, as Knab was sold during 2024.