Carbon footprint of the PZU Group

Scope 1 includes direct emissions resulting from fossil fuel combustion in buildings and vehicle fleets, as well as losses of refrigerants. Scope 2 accounts for emissions related to the purchase of electricity and heat. Emission calculations are based on factors provided by recognized national and European sources, including KOBIZE and DEFRA. As for the KOBIZE emission factor, the PZU Group did not modify it independently, which means that it includes balance sheet losses and differences that should be disclosed in Scope 3 Category 3 under the GHG Protocol. In calculating Scope 2, information published in particular by the Energy Regulatory Office and electricity suppliers was additionally used, with the caveat that the PZU Group did not verify their factors against the criteria in the GHG Protocol.

The PZU Group was not subject to the European Emissions Trading Scheme in 2025, hence it has no such emissions in its Scope 1. As of the reporting date, the PZU Group has no information regarding circumstances that would significantly affect greenhouse gas emissions. Scope 2 GHG emissions reporting includes contract instruments associated with electricity and attributes related to its generation.

The PZU Group used standardized spreadsheets to calculate emissions and did not use external calculation tools.

When calculating Scope 2 emissions, due to the sharing of space in some properties for own operations with other entities, including those outside the PZU Group, proportional estimates of consumption were made and rounded to the nearest significant value. Emissions were also estimated for selected properties in the absence of consumption information covering the entire year 2025 for them. Consolidated data provided by some of the PZU Group entities, including their aggregate consumptions, were also used to calculate emissions.

As part of the figures for calculating Scope 2 emissions, the PZU Group identified:

• GO contracts (guarantees of origin) covering ca. 46.3% of the electricity consumed;
• own renewable sources (photovoltaics) covering ca. 2.6% of the electricity consumed.

The changes that have occurred in the sum of Scope 1 and Scope 2 emissions relative to last year are due to improvements in the data collection process at the level of PZU Group entities, including work to replace estimates with actual data and to expand the scope of data collected, particularly from the investment property portfolio.

For Scope 3, emissions related to insurance, investment, credit, and leasing activities were deemed material and were grouped into a single key category:

• Category 15 (Emissions from financial investments) – emissions resulting from held bonds, stocks, investment funds, project finance, sold insurance policies, and granted loans.

The calculation excludes emissions associated with certain assets and investments in the value chain that are not included on PZU Group’s balance sheet, including assets of investment and pension funds managed by the PZU Group. Emission calculations are based on factors and estimates in accordance with PCAF methodology, using data derived, in particular, from the Bloomberg database, PCAF factors, emitters, and publicly available market reports.

The remaining Scope 3 categories, from the perspective of the PZU Group, have been deemed immaterial and were not included in the statement. Due to varying market and interpretative practices related to the GHG Protocol – particularly within banking and leasing groups – the Alior Group’s leasing portfolio, reported under Category 13 (1,177,434 tCO₂e), has been included in the emissions presented under Category 15 (707,370 tCO₂e). However, the emissions reported by the Alior Group under Category 11 (2,930,281 tCO₂e) have not been incorporated into the PZU Group’s total emissions. This is because Category 11 refers to Scope 3 emissions arising from the specific operational activities of the Alior Group, which are not included within the PZU Group’s adopted approach to the consolidation of financed emissions, in line with the PCAF methodology.

For emissions associated with motor insurance, data on vehicles covered by retail insurance policies in the PZU Group in the reporting year, regardless of insurance duration, were used. Emissions in this regard were calculated based on distances traveled and the fuel efficiency of the vehicles. In the absence of some data from internal databases, data obtained from external databases were assigned and estimated based on statistical information, such as estimated distances traveled by the average vehicle type in the area.

The calculation of emissions associated with commercial insurance used data on policies covered by the PZU Group’s portfolio in the reporting year, per the PCAF scope of business lines. Emissions attributed to policies were estimated based on emission figures of insured customers (Scope 1 and 2) and the attribution factor calculated as the ratio of net premiums to customer revenues. Where there was no complete primary data, estimation methods based on physical activity or sectoral emission factors were used. Where internal data was unavailable, external data was used.

The calculation of emissions associated with own investment portfolio, which includes stocks and bonds, uses information published by the companies in Scope 1 and 2 and estimates based on PCAF data and methodology. Emission figures come from the Bloomberg database, and the estimates are made based on the country and sector of a given portfolio company. As for emissions relating to investments in treasury debt securities, they are estimated on the basis of country emissions data published by the European Commission and GDP data adjusted to each country’s purchasing power parity. In addition, the estimate was based on information reported by the UNFCCC (United Nations Framework Convention on Climate Change) and macroeconomic data of the OECD (Organization for Economic Co-operation and Development).

The calculation of emissions from lending was carried out in accordance with PCAF’s Global GHG Accounting and Reporting Standard for the Financial Industry. For the purpose of the calculation, internal and external data sources were used, including data found in the central energy performance of buildings register maintained by the Minister of Economic Development and Technology, average emission factors contained in European databases, as well as reported emissions and financial data.

In calculating Scope 3 emissions, the PZU Group relied on primary data for 48% of emissions. In order to present a consistent value for all PZU Group entities, emissions that were assigned a PCAF quality score (“PCAF score”) of 1 or 2 were considered to be derived from primary data.

For full transparency of the activities subject to the calculation of Scope 3 Category 15 CO₂e emissions, the PZU Group presents the following breakdown in each value chain component:

To ensure greater accuracy, consistency and completeness of the data presented in reporting in accordance with the GHG Protocol and PCAF guidelines, Scope 3 Category 15 emissions were recalculated for the non-life insurance value chain component and in terms of emissions reported by Alior Group. The recalculation for non-life insurance is due to three key factors: a change in the calculation tool and refinement of the calculation process, the limited ability to replicate the previous year’s calculations, and the expanded scope of the source data relative to the previous year. In the case of Alior Group, the adjustment is related to the modification of the methodology and the improvement of the process for items published for the previous reporting year. Therefore, in this section, the 2024 figures do account for the recalculation.