Embracing ESG:

How insurers turn ambition into action

PwC EMEA Insurance ESG Whitepaper
Webcast, 14th of February 2023
 Agenda

Christoph Kees-Jan Romke Lena Lex Angela

Schellhas de Vries de Witt Giehler Huis in het Veld McClellan
Partner Partner Senior Manager Senior Manager Director Director
PwC Germany PwC Netherlands PwC Netherlands PwC Germany PwC Netherlands PwC Germany
christoph.schellhas@pwc.com kees-jan.de.vries@pwc.com romke.de.witt@pwc.com lena.giehler@pwc.com lex.huis.in.het.veld@pwc.com angela.mcclellan@pwc.com

Opening & Chapter 2: Chapter 3: Chapter 4: Chapter 5: Moderator

Chapter 1: Regulation Products, Assets Reporting, Risk & Data
Strategy & & Own Tax
Governance Operations

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1 Strategy & Governance
Strategy & Governance Regulation Products, Assets & Own Operations Reporting, Risk & Tax Data

Importance of Strategy & Governance for ESG at a Glance

Impact and progress of the Strengthen the governance and

strategy accountability
• Define objectives and quantifiable KPIs • The board should lead the sustainability transition
and be accountable
• Baselining, monitor KPIs, track progress and
identify possible areas of operation • Holistic responsibilities and integration into both,
line function and project governance, is key
Engage

Identify and bridge capability Change Material impact of and on your

gaps business
• Compare current capabilities (people, process, • Determine your current and desired impact of
data and technology) with strategic objectives E, S and G for all business functions and your
and identify the gaps business model as a whole
• Identify how these gaps should be addressed • Make an effort to accelerate the green transition
and monitor progress (incl. tope from the top)

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Strategy & Governance Regulation Products, Assets & Own Operations Reporting, Risk & Tax Data

Facts and Numbers which amplify the importance of ESG in your

Strategy & Governance
High

Pragmatist Strategist Driver of ESG

Spectrum of ESG adoption

Deploys targeted ESG quick wins which align Integrates ESG opportunities which align with
with overall strategy its corporate strategy

(35%) (50%)
Commitment 1 Regulation
to ESG Low High
Sceptic Zealot
Rejects ESG as a strategic priority, Views ESG as the main driver of the
integrating minimum regulatory standards company’s purpose and focuses on business
which aligns to this (even if it is at odds with 2 Customers and Employees
the corporate strategy)
(8%) (2%)
Low
5% of respondents answered this question with “Prefer not to say”
Coherence with strategy
3 Shareholders/ Investors

How to operationalize your strategy into your products 4 Intermediaries

5 Value Chain Partners

Development

Dark/ light green life ESG compliant Assets

Underwriting
SAA, ALM &
Product

products (SFDR) & Liabilities

Products
Sustainable Products/ Decarbonise Assets & 6 Communities/ Press
Solutions Liabilities

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Strategy & Governance Regulation Products, Assets & Own Operations Reporting, Risk & Tax Data

Strategy and Governance: Action required!

Challenge and improve your Status Quo

1 2 3
Align your ambitions with Define your own ESG
Identify how climate
the regulatory initiatives, develop a
change/ ESG factors affect
requirements and your baseline, set KPIs and
your risk profile!
business model! monitor progress!

4 5 6
Review and improve your Identify ESG transition
Use the opportunities of
governance, policies & needs of your clients and
the ESG transition for your
guidelines and external design products and
innovation and growth!
communication/ Ratings! services accordingly!

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 Regulation
2
Strategy & Governance Regulation Products, Assets & Own Operations Reporting, Risk & Tax Data

Regulatory objectives versus today’s regulatory map

Regulatory Aim Regulatory Map

Embed ESG and accelerate green transition in line

1 with the European Green Deal and EU Action Plan on
Financing Sustainable Growth
Strengthen understanding on your exposure to
2 physical climate risks and green transition risks
Strengthen disclosure of strategy and performance on
3 social and environmental issues
Bring the preparation and disclosure of non-financial
4 reporting up to the standards of financial reporting
which are already subject to external assurance
Define which activities and investments are considered
5 sustainable and apply greater uniformity in how they
are marketed and reported on

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Strategy & Governance Regulation Products, Assets & Own Operations Reporting, Risk & Tax Data

Getting to grips with ESG regulation

Make it credible
Be aware of how your own
Take a strategic lense operations and those of your
suppliers and partners impact on
Assess what’s coming through a social and environmental priorities
strategic rather than just compliance and drive positive change.
lense.

Embed change in your Win business buy-in

organisation
Map climate and biodiversity risks against
Target new risks and drive product your investment strategy and build ESG
innovation and differentiation by into your performance goals.
putting sustainability at the centre of
product development.

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Strategy & Governance Regulation Products, Assets & Own Operations Reporting, Risk & Tax Data

Regulation: Action required!

Challenge and improve your Status Quo

1 2 3
Prepare your ESG strategy Adapt your ESG Make sure, that your
and performance to stand governance and due metrics and targets are
up to stakeholder scrutiny diligence processes so that credible!
and regulatory and tax you can identify emerging
compliance! gaps!

4 5 6
Plan to deal with Turn regulatory shake-up Analyze what impact the
uncertainties and into an opportunity! double materiality principle
conflicts in ESG reporting has on the assessment and
at a global level! management of your
business!

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3 Products, Assets, Own
Operations
Strategy & Governance Regulation Products, Assets & Own Operations Reporting, Risk & Tax Data

Key actions on embedding sustainability in your products, assets and

own operations

Win business Judge how client

buy-in demands are evolving

Align ESG and Be innovative and

investment goals design new products

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Strategy & Governance Regulation Products, Assets & Own Operations Reporting, Risk & Tax Data

Practical steps needed to bring your product offering and asset strategy
into line with your overall ESG ambitions

Your Foundation Next Steps

Climate Strategy

The world’s impact on me Embedding sustainability in

My impact on the world
1 your products

Impact Risk Opportunities

Investments Building sustainability and
“How can I
cost-efficiently
“How will
transition and
“Which new
business
2 climate risk into your asset
Products reduce my physical opportunities strategy
climate impact climate risks can I capture”
in line with the affect my
Paris business” Strengthening the
Own Operations Agreement?”
3 sustainability of your own
operations
Focus of the white paper

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Strategy & Governance Regulation Products, Assets & Own Operations Reporting, Risk & Tax Data

Product, Assets & Own Operations: Action required!

Challenge and improve your Status Quo

1 2 3 4
Create opportunities to drive Be sensitive about the Bring sustainability to the Put ESG at the centre of
innovation and develop new change in your clients’ centre of your product your investment strategy!
business models! demands and seize design process!
opportunities!

5 6 7 8
Identify how climate Bridge your knowledge and Choose your rating agency
Reconsider and improve
change/ ESG factors alter capability gaps to manage and adapt your strategy
your ESG governance- and
your risk profile! the impact on your decisions in order to
accountability frameworks!
company! achieve the best possible
rating!

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4 Reporting, Risk & Tax
Strategy & Governance Regulation Products, Assets & Own Operations Reporting, Risk & Tax Data

Key actions on turning reporting, risk and tax management into engines
of ESG

Be clear about the ask Judge risks holistically

• Pinpoint what regulations and • Identify new ESG risks
strategic commitments • Perform materiality analysis
• Know how to align the disclosure • Include ESG into your enterprise risk
demands with your ESG strategy management (ERM) and business
• Be aware of stakeholders’ decision making frameworks
expectations • Define what role your CRO
should play in managing ESG risks

Identify the gaps

Strengthen accountability Consider tax upfront
• Hold yourself accountable • Do not overlook tax in your strategy
• Ensure that there is an • Tax should be an integral part of
oversight mechanism your ESG Strategy
• Align front office, reporting, risk and • Get the data and prepare
tax teams the tax transparency reporting

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Strategy & Governance Regulation Products, Assets & Own Operations Reporting, Risk & Tax Data

In the future, sustainability reporting will increasingly be on a par with

financial reporting
Challenges

The reporting world today

Financial reporting Sustainability reporting
Fragmented & Assurance level/ Data
complex landscape (quality)

Implementation Stakeholder
timelines expectations

The reporting world of the future E

Reporting

Risk
Financial reporting Sustainability reporting

Tax
S

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Strategy & Governance Regulation Products, Assets & Own Operations Reporting, Risk & Tax Data

Reporting, Risk & Tax: Action required!

Challenge and improve your Status Quo

1 2 3
Prepare your data, skill sets Have tactical measures Be aware of emerging ESG
and tech understanding that ready for meeting the initial risks and what role your
you are able to ensure reporting deadlines to put CRO plays managing them!
credible reporting for your reporting on a durable
stakeholders and boards! footing for the future!

4 5 6
Deliver on your promises
regarding your reporting, Go beyond the tick-the-box Involve your tax team in
risk and tax teams by compliance by building a setting the ESG strategy
aligning them to the front comprehensive company and vice versa!
office! risk framework!

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5 Data
Strategy & Governance Regulation Products, Assets & Own Operations Reporting, Risk & Tax Data

The ‘M.O.A.S.’

Mother of all
Spreadsheets
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Strategy & Governance Regulation Products, Assets & Own Operations Reporting, Risk & Tax Data

How a data rethink can sharpen insight, innovation and credibility

● Use CSRD as a starting point for data needs

● Let your business model be leading ● Clarify ESG data needs for short, mid & long term
● Expand data on architecture, IT & ambitions ● Look at your present data sources & processes
and role within the economy ● Do not only focus on sourcing & collecting, but build on
Bridge the your capabilities to analyse & gain insights
gaps

Determine
what you
need

Strengthen
quality
control and
assurance
● Pursue the same rigour as used in financial reporting
● Expand with a clear data trial
● Apply the data in decision making processes
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Strategy & Governance Regulation Products, Assets & Own Operations Reporting, Risk & Tax Data

What kind of ESG data is needed to act and how does an effective data
strategy look like for your business to deliver

ADVANCED ANALYTICS
AI, deep
Aiming higher, let your strategy rule your data needs learning
01 02 03 04
Being ready for the new realities requires credible data ANALYTICS
Experimentation,
simple models

Barriers remain, but are not impossible to overcome

AGGREGATE Analytics, metrics,
segments
Specific hurdles for insurers

Iterative
Find data
Judging data demands
EXPLORE/TRANSFORM Cleaning, anomaly
detection
Get the data
Create data
Move from commitment to accountability Reliable data flow, infrastructure,
MOVE/STORE
ETL, structured & unstructured Increase maturity and reliability
Be pragmatic data storage
of data

Strengthen quality control and assurance Public data sources, internal data How to use the data
COLLECT sources, sector outreach, customer
outreach, external vendors

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Strategy & Governance Regulation Products, Assets & Own Operations Reporting, Risk & Tax Data

From data to actionable insights

Challenge and improve your Status Quo

1 2 3
Be clear about the specific Find out how and where this Iron out inconsistencies and
data you need to deliver for data can be gathered, create a single version of
your ESG ambition & enriched and validated. the truth.
integration.

4 5
Assign the roles, for who is
Integrate data into your in charge of data and
companies’ architecture and analysis and determine how
decision making. the data should be
governed.

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6 Closing Remarks
Our Authors
Strategy & Overall Climate
Christoph Schellhas Lex Huis in het Veld Nicole Röttmer
Partner, PwC Germany, Director, PwC Netherlands, Partner, PwC Germany, Sustainability
EMEA Insurance ESG Leader EMEA Insurance ESG Team Services
Phone: +49 69 95856489 Phone: +31 6 57710175 Phone:+49 40 63781191
Email: christoph.schellhas@pwc.com E-Mail: lex.huis.in.het.veld@pwc.com E-Mail: nicole.roettmer@pwc.com

Regulation Reporting Data

Kees-Jan de Vries Kristina Stiefel Lex Huis in het Veld
Partner PwC Netherlands, EMEA Partner, PwC Germany, EMEA Insurance Director, PwC Netherlands, EMEA Insurance
Insurance ESG Regulation ESG Reporting ESG Team
Phone: +31 6 10696828 Phone:+49 69 95852975 Phone: +31 6 57710175
Email: kees-jan.de.vries@pwc.com E-Mail: kristina.stiefel@pwc.com E-Mail: lex.huis.in.het.veld@pwc.com

Products Investments Tax

Adam Younes Andrew McDowell Till Hanning
Senior Manager, PwC Switzerland, EMEA Partner, PwC Luxembourg, EMEA Insurance Partner, PwC Germany, EMEA Insurance
Insurance ESG Products/Liability ESG Investments ESG Tax
Phone: +41 58 792 18 13 Phone: +352 621 332 034 Phone:+49 40 63782640
E-Mail:adam.younes@pwc.ch E-Mail: andrew.mcdowell@pwc.com E-Mail: till.hannig@pwc.com

Risk
Trisha Gibbons Janka Stöwahse Charalambos Antoniou
Director, PwC Ireland, EMEA Insurance Director, PwC Germany, EMEA Insurance Partner, PwC Switzerland, Global Insurance
ESG Risk ESG Risk ESG Tax Leader
Phone:+353 87 689 9978 Phone: +49 89 57906631 Phone: +41 78 781 7883
E-Mail: trisha.gibbons@pwc.com E-Mail: janka.stoewahse@pwc.com E-Mail:charalambos.antoniou@pwc.ch
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