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      What does sustainability mean for an insurer, and how can you, as a financial player, truly make a difference? Bart Vanhaelen from Federale Verzekering and Walter Jacobs from KPMG Law show how regulation, investment choices, and the transparency label Towards Sustainability come together in a strategic sustainability approach.

      Sustainability is no longer a side topic for financial institutions. Regulation, but also stakeholders such as customers and employees, require the sector to report more and more transparently about its impact.

      At Federale Verzekering, a Belgian mutual insurer (a model in which customers are co-owners and profits are either reinvested in the organization or shared with the customers, editor’s note), this evolution prompted a thorough review of their ESG approach. “As an insurer, we can apply ESG on three levels,” says Bart Vanhaelen, Sustainability Manager at Federale Verzekering. “In our own operations, in our products, and in our role as an institutional investor.”

      “Within our organization, we’re taking targeted measures. We’re transitioning our vehicle fleet to fully electric, and all buildings used by Federale Verzekering now run on green electricity. But as a services company, the direct impact of these measures is relatively limited. That’s why we also integrate sustainability into our products. In our car insurance, for example, we offer a discount for ‘mini‑kilometer’ drivers, those who drive less than 12,500 km per year. We also provide premium reductions for hybrid and electric vehicles.”

      “However, our biggest impact lies in our role as an institutional investor. By applying clear ESG criteria in our investment decisions, we consciously choose where we do – and do not – invest. In this way, we take responsibility for shaping the economy through our capital. By having this policy independently assessed and certified with a recognized sustainability label, we can also demonstrate that our investments are genuinely sustainable. This, in turn, increases transparency and strengthens trust among our stakeholders.”

      Michael Wagemans
      Michael Wagemans

      Partner, Head of Sustainability | Advisory

      KPMG in Belgium

      Transparency through labels

      Walter Jacob, Senior Counsel at KPMG Law, is very familiar with these labels. He refers, for example, to the Towards Sustainability label, an initiative of the Belgian banking sector. “With this initiative, the Belgian financial sector anticipated European sustainability regulation. The standard serves as a quality label that indicates which financial products perform well in terms of sustainability. In the Branch 21 insurance market, besides Federale Verzekering, only three other (bank)insurers in Belgium hold such a label. It’s an objective benchmark that helps build trust, both domestically and internationally.” Obtaining the Towards Sustainability label is no simple task and requires extensive preparation. “There is essentially a playbook setting out all the criteria you need to meet. You demonstrate this through a detailed file, showing, for example, that you invest in sustainable investments and exclude certain activities.”

      “For retail investors, it’s not always easy to understand which investments are sustainable and which aren’t. A label like this helps classify products in a transparent way,” Vanhaelen adds. “Together with our partner vdk Bank, which distributes one of our financial products, we were able to obtain this label.” Federale Verzekering was also able to rely on the support of KPMG, which helped translate the complex regulatory requirements into concrete actions. “By mapping out all the information, we could identify exactly what still needed to be adjusted to meet the criteria.”

      “As a result, we refined our investment policy to achieve a greater positive impact, avoid controversies, and enhance transparency. This includes stricter exclusion criteria for certain countries and sectors, norm‑based screening, and a ‘best in universe’ approach. At a certain point, all those requirements had to be consolidated into one coherent policy, and that’s when we brought in external help. KPMG reviewed our preparatory work with a critical eye and helped align different pieces of European legislation. Intuitively, you can often get a good sense of what sustainability means, but when you translate it into legal and technical terms, it becomes more complex.”             

      For Federale Verzekering, obtaining the Towards Sustainability label for its Branch 21 insurance product is not the end goal but a starting point. Vanhaelen concludes: “We’re proud to demonstrate that our vdk Safe Life investment insurance is sustainable and that we became the fourth Belgian player to receive this label — but our work doesn’t stop there. We’re committed to achieving the same label this year for two of our own investment insurance products.”

      This article was created in collaboration with De Tijd and L'Echo.

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