Letter from the CEO to Stakeholders

Beata Kozłowska-Chyła, Ph.D. Hab
President of the PZU Management Board

Dear Sir or Madam,

For the past three years, we have been operating in a volatile and dynamic environment, facing challenges on a global scale that we had not experienced before. The COVID-19 pandemic, the full-scale war in Ukraine, the energy and food crises, and the consequent inflation rise, with central banks tightening monetary policies, and the increasingly urgent need to respond to climate, demographic and technological challenges – all this affect the operating conditions of our business and the Polish economy as a whole, the lives of our employees, clients and all Polish people.

We know that we can rise to these challenges by consciously taking responsibility for the environmental, social and economic impacts made by our organization. The PZU Group is today the largest financial conglomerate in Poland and Central and Eastern Europe. Thanks to our market position, our millions of clients and their trust in the PZU brand, we can significantly co-create market standards and influence social attitudes. This is why, when we launched our new four-year strategy, we clearly declared that we measured our success not only by the above-average financial results and ambitious business goals but also by the way we achieve them. We want to incorporate ESG factors as fully as possible at all management levels and in every field of the PZU Group’s operations, and we want to encourage our stakeholders to do the same and help them along the way. The year 2022 was particularly important in this regard as it was the period for financial institutions to implement EU legislation on sustainable development.

As an insurer, we find it crucial to support sustainable and responsible business that contributes to mitigating the negative effects of the climate change, including natural disasters, which cause massive damage. In this respect, we want climate neutrality to be achieved by our main companies by 2024; in the long term – by other entities in the Group, our suppliers and partners; and ultimately – also by our insurance and investment clients. In 2022, we reduced carbon emissions from PZU’s and PZU Życie’s own sources by 25.5 percent in total (location-based method). We also compensated for these part of the emissions we had failed to reduce in 2021 by purchasing certified offset credits, equivalent to 17,500 tonnes of CO2, via the UN platform. As much as 85 percent of the electricity contracted and purchased by PZU and 68 percent in the case of PZU Życie came from renewable sources, with RES accounting for 100 percent in locations covered by direct contracts with energy providers. Last September, we completed the relocation of over 4,500 employees to the state-of-the-art headquarters, PZU Park in Warsaw, which – thanks to the eco-friendly materials and technologies – reduces the carbon footprint by more than 2,500 tonnes per year.

We are effectively building a position as a Trusted Partner in green transformation of the Polish economy. With the investments made in 2022, we have increased our support in this area to nearly PLN 720 million in total, of which PLN 420 million is a financial commitment to wind farm projects. We encourage our individual and corporate clients to join the transformation process also by introducing innovative eco products and services – from special insurance for RES installations and EV cars to funds enabling investments in shares of the world’s leading renewable energy companies.

We are actively involved in solving major social problems. Actions taken to improve the quality of life of Poles in terms of financial security and health are of strategic importance to us. To this end, we are expanding our insurance offering: health, pension, bank and investment offers, for families, seniors, or for employers who want to take proper care of employees and their loved ones. We are successfully developing our prevention programs to reduce the post-pandemic “health gap” and promote a healthy lifestyle and prevention. Dobra Drużyna PZU (Good Team PZU) may serve as an example. The program supports children and young people in developing their sporting passions. More than a total of 45,000 young athletes from 352 sport clubs, teams, unions, academies and associations were beneficiaries of the program in 2022 alone. We also sponsor outstanding athletes, who are idols and inspire our compatriots to be active as well as promote Poland in the world – like today’s best tennis player, Iga Świątek. We also take satisfaction knowing that the PZU Group has contributed significantly to the leap in popularity of amputee soccer, a sport that activates and restores joy to children and adults with disabilities. The symbolic crowning moment of our extensive cooperation with the Amp Futbol Poland association was when a PZU Amp Futbol Ekstraklasa player won the prestigious FIFA award for the most beautiful goal in the world in 2022.

In the face of the Russian aggression against Ukraine, the PZU Group has actively joined the nationwide campaign to help our neighbors affected by the war. In addition to the material and financial assistance we have given to refugees, reception centers at the border or hospitals in Ukraine, and apart from providing health care to Ukrainians, we have initiated an outof- the-box action using our insurance expertise. In the two months after the war had broken out, PZU, taking on the cost of premiums, issued more than 54,000 30-day third-party liability policies for cars of Ukrainian refugees entering Poland who had not managed to purchase mandatory insurance.

We also want to be a leader in the efficiency and transparency of our business and management model. Pursuing our strategy, we create the highest standards in relations with all our stakeholders. We consistently build our corporate culture and operational processes around the customer and their expectations, as evidenced by numerous national and international awards for the PZU Group’s CX (customer experience) efforts. The quality of our investor relations is proven by the fact that PZU is regularly one of the leaders in the annual ranking of WSE companies best communicating with individual and institutional investors, co-created by the Chamber of Brokerage Houses.

Our achievements in the area of sustainable development are recognized and appreciated. The improvement in the quality of ESG risk management is evidenced by the rating results as presented in this report, as well as by numerous awards and recognitions. To provide an example, in the latest edition of the well-known 2022 Responsible Companies Ranking, PZU took third place, the highest among state-owned companies. We also ranked second, and first in the financial sector, in last year’s CCA survey assessing the climate awareness of WSE companies.

It is my great pleasure to present this report, which has been prepared with the utmost care and in accordance with the recognized standards and best practices applicable to nonfinancial reporting; the report also incorporates information requirements as set out in the new EU legislation. I hope that after reading this report, you will be convinced that the PZU Group is among the leaders in the actual implementation of the sustainable development principles and sets trends for the entire financial sector, and you will be inspired to take your own steps in this direction.