Discovery climate-change position

Climate change is one of the key risks facing business and society. Sustained temperature increases have various negative consequences, including a growing number of extreme weather events. This creates a range of material risks for insurers. These risks include not only worsening health outcomes and the failure of health infrastructure, but also rapid changes in market preferences, energy policies and financial-sector regulations, among others.

In 2015, nearly 200 governments signed a treaty on climate change (known as the Paris Agreement). In terms of the agreement, these governments will act to keep the increase in global average temperature to below 2 C and they will pursue efforts to limit this to 1.5 C. Achieving this requires global emissions to drop to net zero by mid-century - an undertaking that will demand collaboration from all sectors of society.

An increasing number of governments are committing to net-zero emissions; however, there is still a large gap between current targets and what is needed to meet the goals of the Paris Agreement. In addition, there is growing pressure from both society and investors for companies to align their business models with a net-zero future, and to integrate climate change into their post-pandemic recovery. This provides an opportunity to address both health- and climate-related challenges, given their inter-dependencies. The World Health Organization estimates that by reducing environmental and social risk factors, nearly a quarter of the global health burden can be prevented. Creating healthy environments for populations is one of the most effective ways to reduce long-term health impacts from climate change and increase resilience to climate change.

As a global financial-services organisation, Discovery recognises that its ability to do business is fundamentally linked to the sustainable wellbeing of the communities in which we operate. Our core purpose of making people healthier and enhancing and protecting their lives is aligned to the goal of maintaining an environment that enables and sustains good health. In addition, through our Shared-Value business model, we play a significant role in influencing our clients' health and financial behaviour, and we share the value of this behaviour change with our clients and society. We have an opportunity to become part of the climate-change solution by extending the Shared-Value model into this space, while minimising our own impact.

To achieve these ambitions, Discovery has formulated a climate-change strategy with the following aims:

  1. Assess and acknowledge potential climate-related risks and opportunities, and formulate appropriate strategies.
  2. Integrate climate-change issues into Group policies and practices, including investments, procurement and partnerships.
  3. Set science-based targets aligned with global best practice for direct and indirect greenhouse-gas emissions.
  4. Innovate to develop climate-friendly products and services that positively influence society.
  5. Drive climate action and advocacy through industry and policy engagement.
  6. Disclose and report on climate-related risks, strategies, targets and progress that are aligned with the recommendations of the Task Force for Climate-related Financial Disclosures (TCFD).

This response is captured in two overarching goals for the short to medium term and the long term. These goals are enabled through three pillars, each with specific commitments*:

SHORT TO MEDIUM TERM

Carbon-neutral operations by 2025

  • Achieve carbon neutrality in our SA, UK and US operations by 2025 (Scope 1 and 2 emissions)

MEDIUM TO LONG TERM

Achieve net zero by 2050 or earlier

  • Publish our plan by 2025 to achieve net-zero greenhouse-gas emissions by 2050 or earlier
  • Collaborate with strategic partners to enable a low-carbon future

1. Align

across practices and properties

Reduce Group greenhouse gas emissions to align with global climate ambitions

Reduce emissions across our properties in South Africa, the United Kingdom and the United States, with the following aims:

  • Achieve carbon neutrality across our operations by 2025 (Scope 1 and 2 emissions).
  • By 2023, fully assess the implications of adopting science-based targets across our activities in support of the goal of net-zero greenhouse-gas emissions across our operations and value chain.

2. Amplify

through portfolio and partnerships

Integrate climate-related issues into investment, procurement and partnership decisions and policies

Align business decisions and policies with a net-zero future, including risk management, investments and interactions with partners and other stakeholders. Aims include:

  • Incorporate climate-related criteria into procurement and partnership due diligence.
  • Enforce our responsible investment policy and require asset managers to be active owners through proxy voting and engagement.

3. Impact

through incentives and innovation

Develop and scale products and services that reduce greenhouse-gas emissions and support adaptation

Extend the Shared-Value model into climate-related behaviour change, with the following aims:

  • Launch climate-related product offerings in South Africa and the United Kingdom by 2023.
  • Reduce average CO2 emissions across our client base, with a baseline and potential to be defined by 2022.

The above aims are underpinned by the following governance commitments:

  • Assign responsibilities at Board and Executive level for delivering on our climate-change strategy.
  • Assess, manage and publicly disclose climate-related risks and opportunities across the Group.
  • Review our capabilities and organising structure to deliver on our climate-related ambitions and goals.

This strategy and its activities are aligned with the Group's broader approach to environmental, social and governance issues. More detail on this strategy will be shared later in 2021 and Discovery will follow the recommendations of the Task Force for Climate-related Financial Disclosures for reporting on progress against these targets.

* Carbon-neutral targets relate to carbon dioxide only and Scope 1 and 2 emissions only. A net-zero goal includes all greenhouse gases and scopes.
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