The following overview presents the material impacts, risks and opportunities identified for this topical standard, as well as the associated Group-level and Holding-level policies or guidelines with reference to the corresponding section in the report. The policies for all of the following impacts, risks and opportunities in ESRS E1 “Climate change” are:
VIG strategic and sustainability programme (incl. the transition plan for climate change mitigation)
VIG Code of Business Ethics
Information is provided in ESRS 2 MDR‑P “Policies adopted to manage material sustainability matters”. Additional corporate policies relevant to specific material impacts, risks or opportunities are also listed in the table below.
E1 Sub-topic |
Category |
Material impacts, risks, opportunities |
Actions |
Strategies and concepts |
|---|---|---|---|---|
Climate change mitigation and energy |
Actual negative impact |
Contribution to global warming through greenhouse gas emissions and non-renewable energy consumption associated with VIG’s insurance and reinsurance products, investments in high-emission sectors and internal operations |
Alignment of corporate business by expanding insurance services for sustainable business activities; |
Responsible insurance in corporate business; |
Climate change adaptation |
Risk |
Higher frequency and severity of claims due to extreme weather events and natural disasters as well as lacking awareness, risk-management insights and/or measures to reduce impacts of insured events by customers |
Advice and recommendations for action for corporate customers to reduce risks, especially in the area of natural hazards |
Responsible insurance in corporate business |
Climate change adaptation and mitigation |
Risk |
Loss of value in capital investments (stranded assets/transition risk) and risk of negative impact on the creditworthiness due to increase in extreme weather events/natural disasters (physical risk) |
Investment exclusion criteria for certain sectors, review of climate value-at-risk (Climate VaR) using MSCI |
Responsible investment |
Climate change mitigation |
Risk |
Investing in and/or underwriting companies that do not adequately address their impact on climate change can lead to negative media coverage and reputational damage resulting in financial loss |
Recommendation and coordination of risk minimisation measures with corporate customers of insurance companies; Regular review of ESG exclusion criteria at company level |
Responsible insurance in corporate business; |
Climate change mitigation |
Opportunity |
Investment opportunities in green/sustainable bonds |
Targeted increase in the volume of sustainable investments |
Sustainability Bond Framework |
Climate change adaptation, climate change mitigation and energy |
Opportunity |
Potential expansion of offerings and market reach due to a higher interest in insurance products covering extreme climate events |
Organising targeted events plus workshops and training, and building expertise in new technologies to expand the product portfolio |
See concepts above |