UNIQA Insurance Group AG

## Engagement Strategy

Since 2022, the UNIQA Group has pursued both proactive and reactive engagement within its engagement strategy, maintaining direct and indirect contact with investees. In 2023, we further expanded this strategy. Our engagements with companies aim to improve the performance of our investees, particularly regarding their climate strategies, decarbonisation goals, and measures. Through our engagements, we foster active dialogue to promote the idea of transition and, where possible, avoid the need for divestment.Â

Proactive engagement refers to our direct bilateral engagements with individual companies, focusing on those that account for 65 per cent of our financed emissions. Over the next four years, we aim to drive progress in these companies through bilateral discussions with their ESG teams, focusing on their specific goals.Â

Reactive engagement includes collaborative engagement, which we have pursued since 2022 as part of our membership in the investor initiative Climate Action 100+ (CA 100+). This initiative brings together a group of international investors to engage with companies that are among the 170 most emissions-intensive globally, with the aim of aligning their climate strategies and disclosures with science-based climate targets.Â

Additionally, since 2023, we have pursued controversial or norm-based engagement, led by ISS. ISS facilitates engagement between investors and companies that commit serious and systemic violations of normative criteria in areas such as corporate governance, human and labour rights, the environment, bribery, and corruption, or fail to take adequate measures to address and mitigate these issues. This particularly includes violations of the UN Global Compact (UNGC) principles and the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises.

Through our engagements, we aim to persuade our investees to: Â

* Implement a governance framework that establishes responsibilities and oversight duties related to climate risks.

* Take measures to reduce greenhouse gas emissions across the entire value chain, in line with the Paris 1.5-degree Celsius climate target pathway, and set SBTi-validated goals where they are not yet in place.

* Provide transparent disclosures to demonstrate the resilience of their corporate strategies against various climate scenarios.

Sustainability measures only develop their transformative power if they are implemented transparently and comprehensibly. At the UNIQA Group, this requirement is met through strong governance for embedding and anchoring ESG in the UNIQA corporate culture, policies, products and activities. There are also clear responsibilities, well-founded stakeholder engagement and comprehensive reporting and ratings from renowned agencies.

Relevant actors and roles in relation to the ESG integration within the UNIQA Governance include:

- Statutory involvement of the Supervisory Board in sustainability reporting

- Comprehensive sustainability management, including a coordinating Group ESG Office, ESG experts in various operating units and specialised departments in Austria, and strategic ESG coordinators in international business units

- Group ESG Committee, composed of members of the management, the heads of the core business units, and the Head of ESG Office

- ESG in the remuneration strategy as an incentive and measure for the Management Board of the UNIQA Group and managers in the Austrian core market

- External audit of the sustainability report through independent verification since 2017

- Mandatory publication of a (consolidated) non-financial report in accordance with the Austrian implementation of the EU Directive on Non-Financial Reporting (2014/95/EU) since 2017

UNIQA Group Risk Management also plays a central role regarding the ESG integration and, above all, the ESG reporting. The goal of UNIQA Group is to protect customers from risks, minimise these risks by bundling them, generate corporate profits and ensure risk-oriented decisions. The UNIQA Group risk management monitors developments in sustainability and analyses their impact on the insurance company. The risk strategy is regularly reviewed and discussed in the Risk Committee. The UNIQA Group Risk Management System is based on the Group Risk Management Policy that defines sustainability risks. These risks are not considered as a separate category, but rather as a general risk classification and can have a significant negative impact on assets, liabilities, financial position or reputation. The system considers short, medium and long-term impacts, metrics and targets in terms of sustainability.

Process flow:
1. Risk identification: the risk catalogue contains sustainability risks that are reviewed annually in the internal control system (ICS).
2. Risk assessment & scenarios: defined climate scenarios from the NGFS (Network for Greening the Financial System) are used to analyse the impact on investments and NatCat damages.
3. Risk monitoring: ESG-related investment profiles of the international subsidiaries are continuously monitored, and limits are set to improve the ESG profile and reduce transitory risks.
4. Risk controlling: a risk minimisation plan is drawn up for each significant residual risk.
5. Risk reporting: sustainability risks are integrated into the most important internal and external reports and are updated regularly.

Details on ESG Integration can be found in the current Sustainability Report, which is available on the UNIQA Group Website in the Sustainability Downloads.

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]As a member of the NZAOA and GFA we comply with these climate strategies and will phase out our exposure to emission-intensive assets to become climate neutral by 2050. Our engagement efforts will need to reflect this strategy in order to reach our goals.

Does your organization have a public commitment or position statement to conduct your engagement activities in line with the goals of the Paris Agreement?[…]Yes

Describe the process(es) your organization has in place to ensure that your external engagement activities are consistent with your climate commitments and/or climate transition plan?[…]As a member of the Net Zero Asset Owner Alliance (NZAOA) and the Austrian Green Finance Alliance (GFA) we comply with these climate strategies and will phase out our exposure to emission-intensive assets to become climate neutral by 2050. Our engagement efforts will need to reflect this strategy in order to reach our goals.