CFO Carsten Stolz on the increasing importance of sustainability at Baloise.
For Baloise, sustainable development means much more than just protecting our business as an insurance provider, bank and asset manager. We want to offer our employees secure jobs and actively drive and shape the changes in our society rather than simply accepting them. Since 2020, we have therefore discussed the importance of sustainability for Baloise extensively with our employees; we have developed a shared understanding of the concept and designed the processes for its implementation together with the Executive Committee and the Board of Directors.
In October 2020, Baloise first announced that the subject of sustainability would be integrated into the Simply Safe: Season 2 strategic phase from 2022 to 2025. This integration is based on the Baloise value creation model, which illustrates how Baloise draws on six resources – employees, customers, society, the environment, partners, and investors – to create value in a sustainable way.
From this starting point, we have made good progress in 2021 with regard to the integration of sustainability considerations into our core processes, as illustrated by the following three examples:
In what areas can Baloise exert the greatest influence to promote sustainable development? An analysis with internal and external stakeholders and experts from various different fields helped us to answer this question. The materiality assessment, which was conducted for the first time in 2022, serves as a prioritisation aid for our sustainability management, as it enables us to focus our resources and capacities on those areas in which we can achieve the greatest positive impact for sustainable development.
Based on a survey of internal and external stakeholders, we were able to identify five areas as highly material to the promotion of sustainable development. The findings of the materiality assessment affirmed the relevance of the goals that Baloise has set itself under the Simply Safe: Season 2 strategic phase with a focus on employees, customers and investors, while also adding further important elements in the field of environmental and climate protection, opportunities and risks of digitalisation, and social elements such as human rights and labour rights.
Through our products and services, we have influence over the sectors, companies and individuals whose activities we support. We have therefore also integrated sustainability criteria into our underwriting policy (Annual Review 2021, page 92). From 2022, Baloise will apply environmental, social and corporate governance criteria in its underwriting guidelines. This means that certain sectors and activities will no longer be supported by Baloise or that customers will be allowed a transition period during which they will need to demonstrate improvements in the sustainability of their business model in order to remain eligible for access to Baloise’s products and services. In this context, Baloise sees itself as a reliable insurance partner for customers whose business models are in transition.
In 2021, we expanded our responsible investment policy through the inclusion of a dedicated climate strategy and an active ownership approach. Our activities under the climate strategy aim to enhance the sustainable profitability of investments, strengthen the management of risks in the investment process and thus boost the success of our customers’ investments over the long term. At the same time, they are also intended to deliver a positive climate impact. Under the active ownership approach, we strive to convince the senior managers of companies to proactively address ESG risks and to seize opportunities in this area. Baloise intends to use this approach to generate a positive environmental and social impact with the assets its manages.
«We are proud of the progress we have made so far in terms of embedding the concept of sustainability within Baloise. But this journey has only just begun – much like our ‘Simply Safe: Season 2’ strategic phase»
The measures we have implemented in recent years have embedded sustainability criteria even more deeply on both sides of the balance sheet (investment and insurance coverage). In addition, we have made progress at organisational level with the aim of expanding our expertise in the field of sustainability and integrating elements of sustainability into a wide range of core and ancillary processes in the Baloise value chain. Alongside the aforementioned areas, this also included our supply chain, the data we hold, and our disclosures.
For the current year, we also have a packed sustainability agenda. One priority will be the implementation of a large number of regulatory requirements such as those stipulated by the EU Action Plan. In addition, we want to be ready to comprehensively implement the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) by the end of 2022 and will participate in the Carbon Disclosure Project (CDP) for the first time. These steps will make our communication on climate change topics even more transparent. Strong base data is indispensable for these plans. We are currently working on compiling this base data, which will include not only climate-related information but also other data in connection with sustainability management. A solid basis of data will enable us to define specific goals and integrated disclosure will create a link between financial and non-financial reporting.
Moreover, we are working hard to earn greater external recognition for our work in the field of sustainability, for example in the form of higher ESG ratings from leading providers such as MSCI.