"Housing is a basic need and it is human right, so it is something of fundamental importance that we need to take care of, especially now that with current challenges housing became an issue in many markets in Europe," Dieter Pscheidl, Head of European Affairs and ESG, Vienna Insurance Group (VIG) stated in the debut of third XPRIMM TIME FOR BUSINESS addressing ESG issues.
ESG is a complex concept, with several ramifications impacting different areas of insurers' activity, but when it comes to the social component of the concept, there is the point where ESG meets one of the core features of the insurance business, a business aiming to protecting people. Together with top representatives of the Vienna Insurance Group (VIG), the XPRIMM TIME FOR BUSINESS has addressed the ESG issues in a series of three episodes, now reaching the last one. The special guests of the show are Petra Ringler, Teamleader ESG and Dieter Pscheidl, Head of European Affairs and ESG, Vienna Insurance Group. The show addressed in particular the "S" in the ESG concept. "Basically, there are two main dimensions to it: one is the workforce - how do we deal with our own employees, their rights and needs; the other aspect to it is adequate living conditions, affordable housing. As insurers, our model business puts us in the perfect position to be perceived as very social. All this is deeply rooted in our DNA, at VIG, and building on a very rich and deep history on social aspect we further elaborate from that including affordable housing," Pscheidl said.
The VIG representatives explained that throughout the last 10 years the property prices increased by round about 75% while rents also raised significantly, by 50% within 10 years, according to figures dating from 2020 and 2021. Most probably the increase has further accelerated, which means "with normal income it's impossible to buy yourself a property if you don't have any other financial means at hand." Disruption of supply chains and inflation are strongly impacting on the ability of building new houses, while the change in the key interest rate policy of the European Central Bank to fight inflation is making loans for buying houses more expensive. In addition, the Green Deal - requiring that all new houses should be build climate neutral from 2030, while the already existing buildings should be renovated accordingly -, will lead to further increases in the prices because of the large investments needed. "Green buildings are good and important for our clients, so this is certainly a good cost, but it should not be done at the expense of the people so we should not end up in a situation where on the one hand we have super green buildings good for climate, but on the other hand we have a lot of people who cannot afford renting an apartment in those buildings or even buying themselves a house that is a climate neutral."
To help solving this dilemma and provide more living space available to medium income, "VIG issued a sustainability bond with the volume of 500 million euros and the net proceeds from the bond are not only invested in Green projects, but also in social projects as into areas of transportation, in projects for improved access to basic services such as education and health and more affordable housing," Petra Riegler explained. On one hand, money was invested in the construction of new buildings and the creation of additional affordable housing units, but also in the renovation of existing buildings. The Group also cooperates with Vienna-based international PropTech company Gropyus, developing together several projects to provide green and affordable housing.
Should you want to revisit the ESG topic, all three XPRIMM TIME FOR BUSINESS shows dedicated to it are available on the XPRIMM YouTube channel, here:
- Europe's roadmap for ESG and its implications for insurers with Dieter Pscheidl, VIG
- Insurer's contribution to ESG, with Petra Riegler and Dieter Pscheidl, VIG
- The "S" in ESG - VIG & Affordable Housing, with Petra Riegler and Dieter Pscheidl, VIG