2023 Sustainability report published – Talanx is systematically implementing its sustainability strategy and has defined new exclusions

“Sustainability is firmly embedded in our Group strategy and is a key component of our business model: as a global insurance group and investor, we are helping our partners in the industry and the economy with their transformation, paving the way for sustainable structural change. We underscored our ambitions yet again in 2023: we have already achieved many of our targets, such as in asset management, and have refined our positioning,” said Torsten Leue, Chairman of Talanx AG’s Board of Management.

Asset management: Key medium-term targets achieved and additional exclusions defined for fossil fuels

The Group had set itself the goal of reducing the carbon intensity of its liquid investment portfolio by 30 per cent compared to the 2019 baseline in the period up to 2025. Talanx already reached this target in the reporting period, with a reduction of 34 per cent. It also exceeded its objective of increasing its sustainable investment volume to EUR 8 billion by 2025: the figure at the end of the reporting period was already over EUR 11 billion.(1)

In addition to hitting these key milestones, the Group defined new exclusions for its liquid investment portfolio in the reporting period: Talanx will no longer make any new investments in issuers who generate 25 per cent or more of their revenues from oil production or transportation (upstream/midstream), or from fracking of shale gas and/or oil. The Talanx Group’s new fossil fuels restrictions are the next systematic step towards decarbonising its portfolio. In addition, Talanx has sharpened its existing restrictions with respect to investments in business models based on thermal coal, and in issuers involved in Arctic oil and gas extraction.

Underwriting: a partner for sustainable transformation

The Talanx Group has also refined its positioning regarding underwriting. After a number of exclusions for oil and gas projects came into force as at 1 July 2023, the Group has now decided to bring forward the exit from its remaining oil sands extraction and processing risks to the end of 2025.

In addition, starting with the reporting period, the Talanx Group no longer offers insurance for any new projects if it receives knowledge in advance that these projects did not obtain the free, prior and informed consent (FPIC) of impacted indigenous peoples.

The Group sees itself as actively assisting and partnering in the transformation process and so is also continuously expanding the insurance cover it provides for new, environmentally friendly technologies. For example, Talanx is a key renewable energy (re)insurer. What is more, since April 2024, HDI Risk Consulting’s Climate Risk Reporting service has offered Industrial Lines customers the opportunity to analyse a variety of physical climate risks for their locations, and to identify suitable climate change mitigation measures.

Medium-term target for carbon emissions in own operations achieved ahead of schedule

Reducing its own carbon footprint plays an important role at Talanx. In line with this, the Group’s own operations in Germany – where more than 38 per cent of the Group’s global staff are employed – have been carbon-neutral (including offsetting) since 2019, and the goal is to hit this milestone worldwide by 2030 (Scope 1, 2 and 3 emissions, including offsetting of residual emissions). In addition, Talanx set itself the medium-term goal of cutting carbon emissions from its German operations (Scope 1 and 2) by 25 per cent compared with the 2019 baseline until 2025. Talanx already reached this target in the reporting period, with a reduction of 38 per cent. Emissions from global primary insurance operations were reduced by 34 per cent in the same period.

One key lever that the Group can deploy to reduce carbon emissions from operations is to improve total energy efficiency at its business premises. The Talanx Group again cut back on its office space in Germany in the reporting period. In addition, 59.3 per cent of its total global electricity for operating establishments came from renewable sources, while the figure for Germany was 100 per cent.

Social focus: local involvement that makes a difference

Talanx is a global group whose local subsidiaries have deep roots in their home locations, and natural disasters such as the earthquake in Türkiye on 6 February 2023 impact it and its employees. Colleagues in Türkiye helped reduce victims’ suffering by making donations, providing a wide range of local humanitarian assistance and ensuring that claims were processed quickly and unbureaucratically.

The Talanx Group’s social engagement activities in Germany also take a variety of forms. For example, neue leben focused on “women and retirement provision” in the reporting period and set itself the task of providing financial knowledge, creating transparency and demonstrating ways of avoiding poverty in old age. neue leben uses advice, educational materials and a “female finance check” to raise awareness of the need for financial security.

Governance: further enhancements to ESG governance

Talanx has responded to the ongoing growth in importance of sustainability aspects for corporate governance in its Supervisory Board as well: a third Supervisory Board member was appointed as a sustainability expert in the reporting period. In addition, the Group is reinforcing the topic of sustainability by expanding and establishing ESG teams in its divisions and central functions.

Equally, Talanx is addressing the growing regulatory requirements. As part of its implementation of the German Supply Chain Due Diligence Act (LkSG), the Group performed its first comprehensive risk analysis of its own operations and its global supplier base in 2023 so as to identify human rights and environmental risks and take appropriate action.

(1) The target was reached for the first time in mid-December 2022. It was exceeded as at the 31 December 2023 reporting date, with the volume of sustainable investments totalling EUR 11.3 billion; without a change in the methodology, the volume would also be above the 2025 target figure, at EUR 9.5 billion.

Sustainability Report 2023