Shaping
sustainable
pathwaystowards
changeSustainability and
Stewardship Report 2022

Contents
Introduction
About this report

02

How to read this report

03

Welcome from our CEO 

04

In conversation with our Global Head of Investments and Global Head of
Sustainable and Impact Investing

06

About Allianz Global Investors

09

01 Our sustainability approach03 Active stewardship03.1 Developing our engagement strategy

62

03.2 How we engage64

03.3 AllianzGI’s engagement in numbers

69

03.4 Engagement outcomes

72

03.5 Collaborative engagements

82

03.6 Escalating engagement concerns

84

03.7 Exercising our voting rights 8601.1 Evolving our strategic approach1301.2 Strengthening sustainability
governance18

03.8 Transparently managing 
conflicts of interest

95

01.3 Guiding clients on sustainable
investment solutions

23

03.9 Industry engagement and commitments

97

04 Corporate sustainability

02 Sustainable investing
02.1 Evolving our approach to
sustainable investing32

04.1 Strengthening our corporate sustainability strategy

10002.2 Sustainability research

3404.2	Creating an inclusive and 
supportive workplace

103

02.3 Sustainability methodologies and analytics

39

04.3	Ensuring responsible business conduct

11002.4 Climate-related risks and opportunities

4304.4 Managing the environmental impact of our operations

114

02.5 Sustainability risk management

45

04.5 Driving our corporate citizenship

119

02.6 Sustainable investing categories

46

05 Appendix

01

Introduction

About this report

Shapingsustainable
pathwaystowards
changeAllianz Global Investors (AllianzGI) is an active
investment management firm and part ofAllianz Group. Sustainable investing is a core
part of our strategy to shape pathways towards
change that secure the future for our clients,
our business and society.

Allianz Global Investors Sustainability and Stewardship Report 2022

We began our sustainable investing
journey over 20 years ago and published
our first Responsible Investing Reportin 2018. Our sustainability reporting
now incorporates our investment
activities and commitment to active
stewardship with our stakeholders.
We have included an expanded section
on corporate sustainability that features
more details of our work on embedding
environmental, social and governance(ESG) practices in our business operations,and engagement with our communities
and society. Our reporting journey reflects
the broader shift from sustainability
commitments to progress, with the onus
on demonstrating tangible change andreal-world impact.
This Sustainability and Stewardship
Report showcases our sustainable
investment and corporate sustainability
beliefs and capabilities. The content isalso intended to renew our admission to
the UK Stewardship Code, one of the mostimportant external accreditations of ourstewardship activities. Being a signatoryof the Stewardship Code is an increasingpriority for institutional investors when
considering partners.

Report scope and boundaries
The content of this report relates toall AllianzGI activities and locations.
All measures, activities and figures referto the 2022 fiscal year (1 January 2022 to
31 December 2022) unless otherwise stated.
Find out more
Read more about our approach tosustainability and explore our latest
research on our website, where you willfind key policy documents and reports,
including our latest Task Force on
Climate-related Financial Disclosures(TCFD) Report.
For information on the sustainability
commitments and performance ofAllianz, please refer to the Allianz Group
Sustainability Report 2022.
AllianzGI website.
AllianzGI TCFD Report.
AllianzGI Diversity, Equity andInclusion Report 2022.
Allianz Group Sustainability
Report 2022.

02

Introduction

How to read this report
Our Sustainability and Stewardship Report 2022 has four sections plus an appendix,
which together reflect our commitment to sustainable investing, active stewardshipand corporate sustainability.

Introduction

Our sustainability
approach

Sustainable
investing

Activestewardship

Corporate
sustainability

Hear from our CEO, our Global Head of Investments and our
Global Head of Sustainable and Impact Investing about theevents that impacted us over the last year and how we are
evolving our approach.
Find out how we are evolving our strategic approach from
ESG to sustainability to impact, and from sustainability
commitments to progress.

Read about how our investment offering and active approachaim to position us as a shaper of sustainable investing solutions
across public and private markets.

Understand our guiding themes – climate change,planetary boundaries, and inclusive capitalism – and how
they impact our active approach to engagement and voting.

Learn how we are increasing our efforts to benefit employees,
communities and the environment, and how we manage risk
and ensure compliance across our business.

UK Stewardship Code indexing
Throughout the report, we mark content that specificallyaddresses the Principles of the UK Stewardship Code.
A full index is included on page 123.

Principle

1

Principles

2

Allianz Global Investors Sustainability and Stewardship Report 2022

3

03

Introduction

Welcome from our CEO, Tobias Pross

Building
a resilient
approach

Welcome to Allianz Global Investors’ 2022
Sustainability and Stewardship Report
as we reflect on an extraordinary year
for investors. This is the second year that
we have combined our sustainability andstewardship reporting in a single report toprovide a holistic view of our commitments
and achievements. Our focus this year wason emerging from the Covid-19 pandemic
better, stronger and more resilient.
But on top of that, we faced unexpectedmarket turbulence driven by the war
in Ukraine and geopolitical instability.
The impacts have been wide ranging,spanning energy security, transition andaffordability, inflation, rising interest rates,
supply chain issues and challenging equity
and bond markets.
These challenges have huge implications
for the investment community. But while
investors’ commitment to sustainable
investing may have been tested, our view
remains the same. We believe sustainable
investing is every bit as crucial to theresilience of asset owners, investors,
the wider industry, and society as a whole.

Allianz Global Investors Sustainability and Stewardship Report 2022

With devastating floods in Pakistan,South Asia, Malaysia and West Africa,and heatwaves and drought in Europe,
China and Africa, the year 2022 gave
clear signs of the potential impacts ofclimate change.
AllianzGI’s culture principles – including
putting clients first, being solution-oriented
and being sustainable in everythingthat we do – underpin our commitment.
While our strategic ambition remains
the same, with sustainability as a key
pillar, our approach is evolving. We have
moved beyond simply incorporating
environmental, social and governance(ESG) risk factors into portfolios to think
more holistically about sustainability acrossinvestment portfolios.
Our ultimate destination is to be able toachieve and show the true impact of theseinvestments. This shift is the foundationof our strategic journey from ESG tosustainability to impact by 2030. You canread more about how we are developing
outcome-oriented impact solutions forinvestors in section 02 of this report.

04

Introduction

Welcome from our CEO, Tobias Pross

Despite a major focus on managing
market volatility this year, we have madegood progress in integrating sustainability
into our various activities – from ourinvestment capabilities to our business
operations. It is our continued investment
in expertise and people that allows us todevelop new products and approaches,alongside transitioning existing products
to be more aligned with sustainable
investing. We have also started the rollout of our proprietary sustainability dataarchitecture to inform, shape and tracksustainable investment decisions across all
asset classes.
We have created a new role to focus on
corporate sustainability, underscoring thefirm-wide commitment to sustainability thatis key to delivering on our clients’ priorities –from reducing emissions to supporting local
communities as part of the global social
impact approach of the Allianz Group.
See section 04 of this report for
more details.
Protecting our offering to clients by being
compliant with regulation is critical for all
new and existing products, and we areconstantly learning and evolving at pacein response to developments in regulation.

In July 2022, we completed the transfer
of certain US investment teams and theassets they manage to Voya Investment
Management as part of our strategic
partnership. We are grateful to regulators,
colleagues and clients who made thispossible and look forward to making themost of the opportunities presented bythis partnership.

Our commitment to shaping
sustainable pathways will
focus on addressing thediversity of client needs.

Volatility seems set to be a continued
companion in 2023, presenting challenges
and opportunities. Inflation remains a
concern for everyone – both firms andindividuals – and the impact of slower
growth will be felt to varying degrees
around the world. Geopolitics willcontinue to impact economic decisions,reiterating the crucial need to maintainthe focus on sustainable investing to
generate value for asset owners andsociety, elevate the investment experienceand protect and enhance clients’ assets
over the long term.
In this context, our commitment to shaping
sustainable pathways will focus onaddressing the diversity of client needs
through leadership and collaboration
as we continue to evolve our holistic
approach to sustainability.

Allianz Global Investors Sustainability and Stewardship Report 202205

Introduction

In conversation with our Global Head of Investments
and Global Head of Sustainable and Impact Investing

Leadershipinsights
on ourjourney
Deborah Zurkow
Global Head of Investments

Matt Christensen
Global Head of Sustainable
and Impact Investing

Principle

2022 was an extraordinary
year for investors. How has
investor appetite for sustainability
and transparency been impacted by
the events of the year?
2022 was certainly a year during
which sustainability was tested
and, in our view, came of age. The onsetof the war in Ukraine was a defining
event of the year, and the conflict sparked
implications far beyond its geographic
footprint. We saw an energy crisis in
Europe and global food supply volatility
alongside climate-related weather
events. This has tested both markets andinvestor commitments to sustainability,
but it has also brought a new levelof realism about what sustainable
investing needs to achieve and how it
is measured. The transition has been
aided by regulation that sets a highbar for what qualifies as sustainable.
Clients are rightly seeing the European
Union’s SFDR Article 81 as the minimum
commitment for sustainable products,
and data and insights are increasingly
critical in reconciling their desire forboth financial returns and sustainableoutcomes. Across the industry we’ve seen
historic methodologies called out as partof the move from opaque scoring systems

1

to quality raw data. This has made it oneof the most extraordinary years, not justin terms of the data we had to source
but also the need for engagement to
supplement this data.
What does being a sustainability
shaper mean for AllianzGI?
We are the guardians of the capitaland savings of a wide rangeof people, from younger generations
to grandparents. They want to do theright thing for the future, and they also
have to meet their needs now. Being asustainability shaper means addressingthese dual needs by keeping the
spotlight firmly on seeking to deliver
financial outperformance while building
our sustainable offerings and futureproofing our investments. Allianz, ourparent company, is vocal on its stance onsustainability as a company and what itbrings to the world in terms of net zero asa founding member of the Net-Zero Asset
Owner Alliance. At AllianzGI, we’ve seen
a step change in our sustainability
commitments since 2020, consistent withour belief that we have a role to play inshaping future outcomes. Doing goodfor the world also involves being fiscally
responsible and avoiding stranded assets

1 Sustainable Finance Disclosure Regulation – Article 8. Defined as “a fund which promotes, among
other characteristics, environmental or social characteristics, or a combination of those characteristics,
provided that the companies in which the investments are made follow good governance practices.”

Allianz Global Investors Sustainability and Stewardship Report 2022

06

Introduction

In conversation with our Global Head of Investments
and Global Head of Sustainable and Impact Investingby staying ahead of where investors andfinancing priorities are going. It means
being innovative with how we create
and funnel investments. And it requires
strengthening our focus on corporate
sustainability and ensuring all our
employees can contribute, while holding
ourselves to the high standard ofgovernance that our stakeholders expect.
Can you describe what you
mean by the journey from ESG
to sustainability to impact?
Beyond the big events we’ve seen in
the headlines this year, we think themove from ESG to sustainability to impact
will be the long-term trend of the decade.
To explain, ESG is the foundation from which
we must develop our long-term approach.
It’s a base level of risk management thatclients expect of sustainable investments
in terms of assessing and filtering out risks.
Building on that, sustainability shifts the
purpose from risk management towards
developing purposeful solutions that are
created to deliver outcomes needed bysociety, like those targeted by the United
Nations’ Sustainable Development Goals(SDGs). This requires a solution mindset
that uses ESG intelligence to solve thekey challenges. Decarbonisation is a

Principleclassic example, whereby we develop a
portfolio not just based on managing ESG
risk but on aiming to deliver outcomesthat support the pathway to net zero.
Beyond sustainability considerations, impact
goes further by targeting measurable social
or environmental benefits as well as aninvestment return. This is the most ambitious
level to achieve. It requires a portfolio
manager to have a strong impact conviction,and the opportunities can span bothpublic and private markets. AllianzGI has
developed an impact scoring framework for
private market investing and an emerging
body of industry standards is enabling moreaccurate measurement and reporting for
impact investing. Over time, expect to see
more portfolios being developed to meet arange of goals, which will be well-definedfor investors from the outset.

sustainability and financial performancein a portfolio. There’s a growing number ofdifferent sources of sustainability data andit can be difficult to reconcile these sources
into meaningful insights. That is why wehave invested heavily in creating an ESG
data architecture and platform that canservice our own ratings and screening, andenable us to look at markets and portfolios
to determine how to push forward on
sustainability outcomes while aiming tomaintain financial outperformance.

How are you addressing dataneeded to support the journey?
The importance of data cannot be
overstated, in terms of delivering
impact, keeping pace with regulation, anddelivering financial returns. To be robustin our approach to Article 8 funds, as
defined under the EU’s Sustainable Finance
Disclosure Regulation, we need our own
ratings and screening process to reconcile...we think themove from ESG tosustainability to
impact will be thelong-term trend of
the decade.

Allianz Global Investors Sustainability and Stewardship Report 2022

1

We made research a key part ofour team for a reason, starting withdefining what ESG factors are key for eachsector in order to feed the development of
new data analytics software. The launchof SusIE, our Sustainability Insights Engine,
represents a significant milestone forour journey to create our own dataset
and processes to drive our sustainable
performance. Now that the heavy lifting
has been done in creating the tool, thenext steps will be the addition of modulesof stewardship and engagement in 2023.

07

Introduction

In conversation with our Global Head of Investments
and Global Head of Sustainable and Impact Investing
Alongside this, our new impact framework
is being used on the equity and debt sidesof our private markets work, as well as at afund level to feed into our direct investing.
Innovation around funding is
critical in delivering sustainability
objectives. How do you see blended
finance playing an increasing role indelivering sustainable, long-term impact?
We’ve focused over the past several
years on our ambition to gather
more private markets funding aroundclimate and the needs of emerging
markets across the SDGs. Blended financeis about directing private markets funding
into investments that have historically
been the domain of development financeinstitutions (DFIs). In emerging markets,
there often isn’t enough capital to fundinfrastructure projects and the idea is that,by working together, private investors
carry less risk and DFIs can make theirmoney go much further. We’re also
increasingly involved in the equity anddebt side of blended finance in emerging
markets on projects that have a climatechange element. We have a tripartite
agreement with Allianz to see how we
can positively impact climate-related
outcomes. But an increasing numberof third-party investors are looking at

Allianz Global Investors Sustainability and Stewardship Report 2022

Principle

blended finance as an access point toseek to address climate problems acrossthe globe. Scale is key and blended
finance as a technique is something weneed to pay attention to and draw inmore investors. We’re already doing this inemerging markets and the same techniquecould be applied to developed markets.
We are at an inflection point – as people
become more receptive to seeing the trackrecord on these financings, we can start toexpect growth in interest from more thirdparty investors.
How is AllianzGI evolving its
approach for a low-carbon future?
What we see happening with theimpact of events in Ukraine and thevolatility of energy markets are tests along
the way as sustainable investing continues
to become mainstream. We must maintaina long-term mindset and put our building
blocks in place for the future we want
to shape. You cannot simply turn on theswitch for a net zero system today, but you
can thoughtfully plan for tomorrow and
we are pragmatic about moving towards alower-carbon world. Decarbonisation andnet zero alignment are complex, andwe are developing solutions which
we believe are credible, practical andscalable. We’ve worked hard to set up

1

the architecture and infrastructure todeliver Article 8 and 9 solutions, and weare targeting a steady journey to achieve
long-term scalability.
What do you predict we will see
over the next few years in termsof sustainable investing?
We think demand for sustainableproducts will increase dramaticallywith the accumulation of wealth in a
generation that has been focused onsustainability for longer than thoseof us who are closer to retirement.
This is a change that has already started.
One of the big challenges we will need
to overcome is the issue of so muchdisparate regulation, which has createdsignificant complexity. More consistency
across regions would make it easier toinvest in sustainable products in different
places. Europe is on a forward roll andcollective will is not going away, as wehave both a bottom-up and a top-down
agreement about the critical importanceof sustainable solutions. Overall, I’m very
positive about the trajectory we are on,
and how we’re increasingly living andbreathing sustainability right across ourfirm. Progress on sustainability takes
partnership and collaboration with clients,
colleagues, regulators, communities andall our other stakeholders.
08Introduction

About Allianz Global Investors
With a commitment to active
asset management, we seek toelevate the investment experienceand protect and enhance ourclients’ assets over the long term.
Allianz Global Investors (AllianzGI) isan active investment management
firm and part of Allianz Group. With afocus on managing assets and investingfor the long term, we have more than
600 investment professionals and 500
relationship managers working across
20 locations worldwide. We manage EUR
506 billion of assets for institutions andindividuals around the globe.2
AllianzGI offers a diversified range ofactive investment strategies across fourmain pillars: equities, fixed income,multi asset and private markets acrossthe Americas, Europe and Asia Pacific.
With this footprint, we combine expertise
across public and private investments
in developed and emerging markets
with our advisory services – deliveredby our specialist risklab capabilities.
This enables us to guide clients in aligning
their sustainability values and theirinvestment objectives.

Providing value for our clients means
securing and protecting their longterm wealth. We do this through ourcommitment to personal client service andglobal and local market knowledge andinsights. This is reinforced by identifying
long-term growth opportunities that alignwith our vision of a sustainable future.
Sustainability has evolved in the lasttwo decades to become an integral partof the AllianzGI investment philosophy.
This is mirrored by our commitment toembedding sustainability in our own
operations. This echoes the purpose of
our parent company, Allianz Group –“We secure your future” – which prioritises
tackling climate change, delivering social
impact and ensuring sustainable growth.
Generating value for our clients is at the coreof our ethos as we aim to shape sustainable
pathways towards change. In practice,
this means motivating inclusive sustainablegrowth for our clients’ wealth generation andpreservation. To achieve this, we partner withclients and other stakeholders to develop
innovative, forward‑looking solutions andseek opportunities for collaboration towards
real world impact.

Principle

12022 highlights2

EUR 506 billion
total assets undermanagement (AuM)

Our Executive
Committee (ExCo) is

50% female(since 2020)

EUR 251 billionof ESG risk-focused,sustainability-focused andimpact-focused assets

100% ofemployees

completed the Global
Compliance Training

250 sustainability
analyses

59%

Active stewardship:100%
renewable

completed oncompanies worldwide

438 engagements
covering 996
topicsreduction in greenhousegas emissions per
employee (vs. 2019)

electricity in our offices
and local data centres(since 2021)

Greenwich Quality
Leaderin institutional andintermediary investment
management in Asia andContinental Europe3

2 Data as at 31 December 2022.
3 Coalition Greenwich, 2022.

Allianz Global Investors Sustainability and Stewardship Report 2022

09

Introduction

About Allianz Global Investors

Our five business objectives
Together with our clients, employees
and other stakeholders, we aim to drive
lasting change by using our expertise,influence and impact-focused investing
across the entire investment value chain.
We approach this with a long-term
perspective because our active strategies
can take a longer-term view and alignwith the time horizon of our clients, as wellas the trends reshaping markets.

Principles

To achieve this, we focus on five principal
business objectives:

1

Generate strong investment
returns for our clients
We measure our strategies’
asset-weighted performance against theirbenchmarks over one-year, three-year andfive-year periods, the time horizons defined
to us by our clients. We also track how
strategies are performing against peers.

2

Provide excellent client service
We measure client satisfaction
through an annual survey carriedout by independent research consultants
Coalition Greenwich. It assesses how ourinstitutional and intermediary clients view
our investment and client services. We aim
to achieve first-quartile performance andwe use the feedback to identify areas
where we can strengthen our offerings.
Since 2018, Coalition Greenwich has also
conducted client interviews to measureclients’ perception of our sustainable
investing capabilities. Through our client
forums in select markets, we promote
two‑way feedback and shared learnings.

Allianz Global Investors Sustainability and Stewardship Report 2022

1

6

3

Foster a fulfilling work
environment for employees
We motivate our people byfostering a merit-based, values-driven,
inclusive culture and providing the righttechnology and support. The annual
Allianz Engagement Survey is our main
tool for assessing employee satisfaction
and we use the results to highlight where
we need to improve.

4

Grow our company
organically and sustainably
We measure our growth interms of revenues and net cash flow
to gauge the extent to which we areoffering clients the most relevant andattractive capabilities.

We motivate ourpeople by fosteringa merit-based,values-driven,
inclusive culture.

5

Generate profitable growthfor our shareholders
All five objectives are interlinked.
By serving our clients well and motivating
our employees to excel, we believe ourcompany will grow sustainably and deliver
strong results for our shareholders overthe long term.

10Introduction

About Allianz Global Investors

Shaping sustainable pathways asa responsible businessWe see embedding sustainability
as the role of everyone at AllianzGI,
because it is intrinsic to our success as
an active investor and our function asa responsible business.
Our values
Our company values – excellence,
integrity, respect, and passion – describe
how we want to conduct our business.
They underpin our commitment to being
sustainable across all our activities andin our stewardship approach.
• Excellence in operations drives us
to optimise our ways of working andreduce emissions.
• Respect confirms our commitment todevelop long-term relations with clients,
providers and colleagues.
• Integrity requires holding ourselves
to standards over and above
compliance requirements.
• Passion means we apply ourselves
consistently in the face of both successand adversity.

Principle

Our culture principles
Our culture principles – set out below –inspire sustainable behaviours and foster
a working environment that supports
our strategy to be first choice for savers
and investors who seek financial returns

1alongside positive change. These culture
principles describe behaviouralexpectations and aspirations towards
AllianzGI employees and are consistent
with our corporate values.

Our culture principles
Put theclient firstBesustainableTake

ownershipof the final outcome

Think outside the box

in everything we doand embrace failure as alearning opportunity

Be

Win together as asolution- oriented

team

Be

courageousand make tough choices

Allianz Global Investors Sustainability and Stewardship Report 202211

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

01
Our sustainability approach

Evolving
our strategic
approachThis year’s report focuses on how we are shaping pathways
towards change. This reflects our direction of travel as an active
investor from ESG to sustainability to impact, and a broader
shift in sustainability from commitments to progress, to clearly
demonstrate tangible change.

Principle

1

Allianz Global Investors Sustainability and Stewardship Report 202212

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

01.1 Evolving our strategic approach
01.1.1 What sustainability
means to us
Our commitment to shaping sustainable
pathways addresses client needs
alongside the needs of society and ourplanet. To be a sustainability shaper,
we must take a holistic approach.
Sustainability and sustainable investing
are complex and wide-ranging. We areconstantly learning and testing innovative
approaches and forging partnerships.
Being a sustainable and resilient businessis an essential part of this journey,
alongside driving sustainable growththrough investing. Innovation is key
and we constantly learn as we progressfrom an ESG focus to sustainability
and on towards real-world impact
across our three strategic focus areas ofclimate change, planetary boundaries,
and inclusive capitalism.
See visual on page 15.

Corporate sustainability at AllianzGI
We are elevating the importance ofcorporate sustainability as a driver forsustainable growth in the face of theclimate crisis and societal challenges.
In driving sustainable pathways towards
change, we must go beyond our focus on
the resilience and long-term growth ofclients’ assets and aim for the same deep
scrutiny and due diligence to our own
impact as a company. This is how we willcontinue to embed trust in the AllianzGI
brand as a corporate citizen and a
responsible steward of assets.
Stakeholders are demanding increased
corporate responsiveness on sustainability,
and complex legal and enterpriserisk issues require a more defined andsophisticated approach. According to
the latest Edelman Trust Barometer1,
public trust in business is declining inseveral countries, including Germany,and 88% of institutional investors say they
now subject ESG to the same scrutiny as
operational and financial considerations.
We are accountable to all our
stakeholders – including clients,
employees, societal partners,
regulators and our parent company,

05 Appendix

Principles

Allianz – and their trust is fundamental to
our social licence to operate. This means
we must be transparent in how wecommunicate our successes and failures
as we continue to learn and evolve
our approach.
Over the course of 2022, we continued
to enhance the sustainability function
with a dedicated focus on corporate
sustainability and a mandate from our
Executive Committee to deliver long-termbusiness value without compromisingpeople, planet or profit. This means taking
a balanced and forward-looking approachthat demonstrates social accountability
and a commitment to transparent
reporting, partnerships and engagement.
At the core of our approach is acommitment to inclusive meritocracy –building and enhancing a culture andworking environment where people andperformance matter. We promote a
culture that is built on mutual trust andrespect, empowerment and collaboration.
We foster diversity and client satisfaction as
top priorities, along with the environmental
management of our operations andphilanthropic engagement with local
communities and wider society.

1

9

88%
of institutional investors saythey now subject ESG to thesame scrutiny as operationaland financial considerations.

In May 2022, Allianz SE announced
the resolution of US governmental
investigations concerning our Structured
Alpha funds with a guilty plea by Allianz
Global Investors US. Following heavy losses
in the funds during the Covid-19 market
turmoil, we fully cooperated withinvestigations by US authorities. It became
apparent that three former employees
manipulated numerous bespoke client
communications to understate the risk of
portfolios. As soon as the misconduct wasestablished, we took quick and forcefulaction. We continue to implement targetedenhancements to further strengthen
oversight, investment analytics and client
communication controls.

1 https://www.edelman.com/trust/2021-trust-barometer/investor-trust.

Allianz Global Investors Sustainability and Stewardship Report 202213

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

01.1 Evolving our strategic approach

Ensuring regulatory compliance andorganisational resilience is key. We aredeveloping harmonised, visible andtransparent processes to simplify,
scale and enhance process quality
and efficiency. It is essential that ourleaders have the right knowledge,
experience, professional qualifications,
integrity and soundness of judgement.
We also need every employee to have theunderstanding and capabilities to meet
our standards. That is why compliance iscentral to performance appraisal and wemonitor for breaches and misconduct witha range of possible outcomes.
Our investment in the sustainability
function supports our culture principle of“being sustainable in everything that wedo”. Bringing the Corporate Sustainability
Officer (CSO) function together withsustainable and impact investing cements
AllianzGI’s commitment to operate asa sustainable business in a world inwhich investors require a diverse rangeof sustainable products and solutions.2
This will ensure that we operate as a good
corporate citizen by positively contributing
to communities and society, and delivering
sustainable value for stakeholders.
For more information, see section 04.

05 Appendix

Principles

Our approach to sustainable investing
We aim to simplify the complexities ofsustainable investing by guiding
and partnering with clients andother stakeholders to offer effective
solutions that address diverse
investment objectives.

We seek to inform, not prescribe, the ESG,
sustainability and climate profile ofinvestee companies. Our aim is tomotivate inclusive sustainable growth byactively partnering for forward-looking
solutions and creating real-life change
through collective action.

Our sustainable investing philosophy
centres around an investee entity’s
future “operating and financial
resilience” in evolving economic andclimate scenarios, and its positioning
in different investment strategies.

This includes responding to regulatory
demands and challenging climate
and geopolitical events. The World
Economic Forum’s Global Risks Report
20233 ranks natural disasters and

1

4

9

extreme weather events as the second
greatest risk after the cost of living.
Over the next 10 years, the report
identifies the top three risks as failure
to mitigate climate change, failure ofclimate change adaptation, and natural
disasters and extreme weather events.
In fourth position is biodiversity loss
and ecosystem collapse. We see theserisks as closely interdependent and thisview underpins our holistic approach tosustainable investment.

We aim to simplify
the complexities
of sustainable
investing by guiding
and partneringwith clients andother stakeholders.

2 For the avoidance of doubt, whenever using the term sustainable product/fund in this publication, AllianzGI refers to a product or fund classified as Article 8 or 9 under SFDR as a minimum criteria.
3 https://www3.weforum.org/docs/WEF_Global_Risks_Report_2023.pdf

Allianz Global Investors Sustainability and Stewardship Report 2022

14

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

01.1 Evolving our strategic approach

05 Appendix

Principles

We have identified three pivotal themes
which we believe are critical to society,our investors and us as a business:climate change, planetary boundaries,
and inclusive capitalism. We aim todeconstruct these into actionable subthemes and use them to guide targeted
engagement and research to ensure
we identify the most material risks andopportunities for our business and its
future impact.

Climate change
the future temperaturein which we will live

Planetary boundaries
how we will sustain the
population in a higher
temperature world

1

4

9

Inclusive capitalism
how we live equitably
in a higher temperatureworld with an evolving
global economy

Key ESGissues• Climate change• Climate action• Biodiversity• Circular economy, resilience• Resource use (eg, water use,land management)• Social welfare and inclusion• Access to health, finance and education• Human capital, livelihoods

Beliefs

Climate change is one of our planet’s
most pressing challenges, with potential
consequences across all three
ESG elements.

We have to define the environmental
limits within which humanity can safely
operate, and avoid any unintended
consequences of the fight against
climate change.

Inclusion will become the next big
wave after climate change, andwill require innovative thinking andsolutions that meet the demandsof younger generations.

Examples• Over 30 mutual funds implement
our Climate Engagement with
Outcome (CEWO)4 approach andengage top carbon emitters to set
ambitious pathways• Decarbonisation solutions• SDG-aligned capabilities: Global
Water, Clean Planet, Food Security• Collaboration with initiatives todevelop standardised indicators• SDG-aligned capabilities: Sustainable
Health, Positive Change• Emerging markets blended financefocus in private markets

4 Since launching CEWO, increasing regulation has shifted the focus towards more data-driven approaches, while engagement is typically viewed as complementary toa sustainability strategy. We have evolved our approach to climate transition to encompass data and measurability using key performance indicators.

Allianz Global Investors Sustainability and Stewardship Report 202215

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

01.1 Evolving our strategic approach

The year 2021 saw significant evolution of ourapproach to sustainable investing, setting thescene for 2022. The year’s geopolitical eventsand regulatory environment, however,created unexpectedly testing market
dynamics for sustainable investors. Our focus
remained a commitment to developing
scalable solutions to support the transition
from ESG to sustainability to impact.
The implementation of this strategy in 2022
included a number of key developments
which underpin our vision for credible
sustainable investing and meaningful impact.
Sector research: enhanced sustainability
sector frameworks, showing how anindustry sector screens on multiple
factors, and our proprietary Sustainability
Materiality Matrix identifies the mostmaterial E, S and G sub-factors for
24 broad sector classifications.
Company research: we developed separate
and absolute company ESG scores to provide
additional perspectives for investment
decision-making. We supplemented thesewith detailed company analysis commentary
which now includes human rights – a key
topic within our inclusive capitalism theme.

Risk and exclusion flags: greater clarity
to improve understanding of the reasonsfor exclusions.
Clearer guidance: a new framework
on regulatory measures (sustainable
investment share, “Do No Significant
Harm” principles, EU taxonomy shares)
which combines a quantitative approachwith qualitative research.
Evolving climate data capture: data
monitoring to support decarbonisation
pathways and net zero alignment.
Performance transparency: expanding
key performance indicators (KPIs) for
planetary boundaries and inclusive
capitalism topics in line with work doneon climate change KPIs.
We believe enhanced research and our new
proprietary Sustainability Insights Engine(SusIE) will enable colleagues across theinvestment platform to help investors
understand the scope of non-financial
considerations of investee companies,
and the potential for this to influencefinancial returns.

Allianz Global Investors Sustainability and Stewardship Report 2022

05 Appendix

Principles

These enhancements also help to identify
what types of investors can hold specificassets, which is important for technicalconsiderations and positioning. All of
this informs how we can engage andtarget stewardship outcomes for investee
holdings, which can add important
perspectives on how to interpret existingdata sets at a time when data continues
to evolve.
Looking ahead to 2023, having developeda robust architecture for the “inputs”
into investment decisions, we will turn
our attention to the best way to approach
the outcome or “impact” of thoseinvestment decisions and the extent towhich capital has achieved non-financial
goals alongside financial returns.
We expect to see accelerating progressin the coming year.

01.1.2 Focusing on the material
sustainability themes of today
and tomorrow
Our approach is guided by the material
sustainability themes of today and thoseof tomorrow, which requires a constantfocus on the shifting global context.

1

4

9

Our focus for 2022 included:• Addressing the close interconnectivity
between the climate crisis andbiodiversity. We see these as key themes
to be tackled in collaboration withother stakeholders. The need to tackle
risks and opportunities associated withbiodiversity loss has been emphasisedby food supply shortages because of
the war in Ukraine and droughts aroundthe world in 2022.
• The future of energy accelerated asa theme following the outbreak of war
in Ukraine in February 2022. Energy iscentral to our themes of climate change
and inclusive capitalism.
• Inclusive capitalism has come to the fore
as investors look to increasingly embedsocial factors into decision making.
This touches upon social inclusion, but ishighly interconnected with climatechange, biodiversity loss and welfare
security deriving from food, waterand energy.
See section 02.2.1 for insightsfrom our research across themes
including sustainable food systems,
healthcare and energy security.

16

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

01.1 Evolving our strategic approach

01.1.3 How active asset
management supports thetransition to a better future
We are fully committed to active asset
management, which offers uniqueadvantages in today’s investment
environment – whatever the asset class,geographic scope or investment style.
Being active allows us to stay ahead of
our clients’ future needs and to manage
developing risks and opportunities forsustainable investing.
As part of our active approach,we have further embedded the threesustainability themes that we identified
in 2021. These continue to shape ourresearch and engagement activities
and underpin our entire approachto sustainable investing:• Climate change: finding solutions to avoid
the harmful effects of climate change.
• Planetary boundaries: how we sustain
ourselves in a higher temperature world.
• Inclusive capitalism: living equitably
in a world with a rising populationand increasing resource constraints.

In 2022 we built out our thematic
engagement approach along thesethree themes.
See section 03.1.
Other highlights include:• Integrating ESG risk considerations into
all our investment processes and active
stewardship approach.
See section 02.5.
• Constructing portfolios designed
to deliver financial returns over thelong term combined with strong
sustainability performance.
See section 02.6.
• Enhancing our ESG approach in private
markets alongside creating an Impact
Management and Measurement team.
This team has built the AllianzGI impact
framework for private markets toensure investments generate material
and measurable positive impact forour clients.
See section 02.6.

Allianz Global Investors Sustainability and Stewardship Report 2022

05 Appendix

Principles

1

4

6

• Advising on sustainability risks andengineering active investment solutions
that meet our clients’ individual
objectives, powered by an innovative
approach to allocation and a deep
understanding of risk. With 60 advisers
globally, risklab – an advisory teamwithin AllianzGI – helps our clients tomeet their investment goals throughspecialist advice and solutions. In 2022,
our sustainability-specific capabilities
within risklab helped more than
25 clients understand and enhance thesustainability profiles of their portfolios.
See section 01.3.

• Active stewardship continues to bea core action across our productstrategies: in 2022, we engaged with 355
companies across 11 different sectors
and 28 countries. We participatedin 10,200 shareholder meetings in
2022, representing 94% of all votable
meetings. We voted against, withheld,or abstained from at least one agenda
item at 69% of all meetings globally,
and overall we opposed 22% of all
resolutions globally.
See section 03.

• Financing the United Nations’Sustainable Development Goals (SDGs)
by incorporating ESG considerations
in our active investment decisions.
We partner with our clients to mobilise
capital to meet multiple sustainabilityrelated goals, such as those set out
in the UN SDGs. Our SDG-aligned
strategies specifically address thefinancing of the SDGs.
See section 02.6.3.

In 2022, the Sustainability Teamdeveloped a firm-wide sustainability
training programme, launched in
Q1 2023 and mandatory for all
employees globally. This training
has been designed to help
our employees enhance theirunderstanding of what sustainability
means to AllianzGI and what it willtake to deliver on our ambition to
become a sustainability shaper.

17

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship01.2 Strengthening sustainability governance
Responsible and transparent
governance is crucial to enable
the creation of sustainable value
for all our stakeholders.
We are committed to clear andtransparent governance principles
and this commitment extends to ourgovernance of sustainable investingand stewardship. Sustainability isembedded throughout AllianzGI and oursustainability ambition is set by senior
management as part of the overall
strategy of the business. As part of the
Allianz Group, we are subject to its
governance requirements relating
to ESG matters.
Allianz has increased the importanceof sustainability with the ambition to
fully integrate sustainability across thecompany. The Board of Management at
Allianz SE is ultimately responsible forall matters related to sustainability andis supported by the Group Sustainability
Board (formerly known as the ESG Board).

04 Corporate sustainability

05 Appendix

Principles

1

2

In 2021, Allianz established a centralised
Global Sustainability function which
supports the Sustainability Board in
integrating sustainability into the business.
Also in 2021, the Sustainability Committee
was created within the Supervisory Board
to drive sustainability strategy integrationand implementation. Sustainability‑related
performance is integrated in compensation
systems through relevant targets,
incentivising board members to act andmake decisions according to E, S andG priorities.
For more information, see the Allianz
Group Sustainability Report 2022.

01.2.1 Our sustainability
governance structure
AllianzGI has clearly established linesof responsibility for sustainability,
which enables effective oversightand accountability:
The Executive Committee (ExCo) is thecentral governance and decision-making
body for AllianzGI and other relevant
committees on sustainability issues.

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01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

01.2 Strengthening sustainability governancePrinciples

Allianz Global Investors – Sustainability Governance Structure

The Global Head of Sustainable andImpact Investing reports to the Global
Head of Investments, who is a memberof the ExCo. This anchors sustainable
and impact investing at the top of
the organisation.

Executive Committee (ExCo)

Investment Executive Committee (IEC)

Sustainable Investing Working
Group (SIWG)

Net ZeroWorking
Group

Other
workinggroups(eg, asset
class specificsustainability
working groups)

GlobalProxy
VotingCommittee

Corporate
Sustainability
Working
Group

05 Appendix

Reputational
Risk
WorkingGroup

Firm-wide ESG programme to implement:• State-of-the-art sustainability data infrastructure.

The Investment Executive Committee(IEC) is the decision-making body for the
management of the firm’s investment
platform and has responsibility
for all sustainability-related topics
within investments.
The Sustainable Investing Working
Group (SIWG) ensures high-quality
sustainable investing and stewardshipstandards are applied and enables
cross-asset class topics to be considered.
The SIWG includes asset class chief
investment officers (CIOs) and managersof the Sustainability Team, who share
best practices and discuss and agree
sustainable investing activities to integratesustainability into the investment process.
It also confirms the strategic orientationsof our sustainable investment policy suchas exclusion policy and stewardship policy.

1

2

The Net Zero Working Groupis a dedicated AllianzGI forum
established in 2022 to oversee key
elements of our climate action
plan, including methodologies anddecarbonisation implementationplans in line with the Net Zero AssetManagers initiative. This working
group comprises representatives fromacross functions who meet monthly or
more frequently to discuss proposals
and implementation plans. The group
evaluates climate-related decarbonisationplans, commitments, methodologies
and measures such as stewardshipand client advisory. The group makes
recommendations to the SIWG/IEC/
ExCo to make final decisions forgovernance purposes.
The Global Proxy Voting Committee
determines our global voting policy andhandles conflicts of interest. Any major
issues or changes are discussed by the
SIWG and reported to the IEC.

• Requirements of EU MiFID II and SFDR Level 2 regulation related to sustainablefinancial products.
• Strong firm-wide governance structures along whole value chain.

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01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

01.2 Strengthening sustainability governance

Established in May 2022, the Corporate
Sustainability Working Group comprises
two ExCo members for Investments andFinance, the Corporate Sustainability
Officer, and four department heads inthe areas of Technology, Operations andProducts; Human Resources; Marketing
and Communications; and Sustainable
and Impact Investing. The working groupmeets monthly and ensures effective
execution of the corporate sustainability
strategy and the integration of associatedinitiatives and principles.

AllianzGI consists of several operational
entities and additional lines of
responsibility exist at the AllianzGI GmbHlevel. The GmbH Management Board
is responsible for overall strategy andcorporate sustainability and sustainable
investing strategy. It reports to thesupervisory board. The GmbH supervisoryboard receives regular updates on thebusiness strategy of AllianzGI GmbH fromthe management board. This includes asection on the latest strategic updates
regarding sustainability.

The Reputational Risk Working Group
comprises global representatives
from across functions who meet twice
yearly to discuss topics that may pose areputational risk and determine whether
action is necessary, including escalation
to senior management. The group may
input on ad-hoc topics that require acollaborative sounding board to assess
the need for action.
Other working groups are dedicated tosustainable investment across different asset
classes and investment methodologies.

Allianz Global Investors Sustainability and Stewardship Report 2022

Principles

1

2

Shaping sustainable pathways towards change

Strengthening sustainability
governance in Asia Pacific in 2022
We have strengthened sustainability governance structuresin Hong Kong, Singapore and Taiwan to combine global
oversight with local oversight of sustainability.
The AllianzGI Asia Pacific Legal
Compliance Risk Working Group
monitors the ESG risk profile andclimate scenario stress-test findings
related to AllianzGI’s Asia Pacificinvestments on a quarterly basis.
Both the Hong Kong and Singapore
boards also receive quarterly reportson the ESG risk profile and climate
scenario stress test results of locallymanaged and domiciled funds.
These reports and other material topics

relating to climate risk and sustainable
investing are discussed at semi-annual
board meetings.
In Taiwan, a cross-functionalsustainability working group works
closely with the global Sustainable
Investing team to monitor trends
and regulations in the sustainable
investing space, report on material
ESG developments to the Taiwan
board, and coordinate provision of
ESG-related training.

20

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

01.2 Strengthening sustainability governance

Linking sustainability with remuneration
The International Management Group– comprising senior functional heads
from across the firm – has sustainability
embedded in its goals through firmwide global solidarity goals. A specificsustainability goal was introduced in
2021 and implemented in 2022. This goaltargets sustainability achievement asmeasured by delivery of above-mediansignatories’ Principles for Responsible
Investment (PRI) results. Achievement of
the global solidarity goals5 influences
the firm-wide remuneration pool.
AllianzGI functions are also embedding
sustainability considerations into teamand individual goals. For instance,
the investment platform has implemented
goals that specifically reflect the way
sustainability is integrated into the fundand focus areas of each team.

01.2.2 Investing in our teamWith sustainability and impact beinga strategic growth area, AllianzGI has
established a growing team dedicatedto sustainable investment and shaping
sustainable pathways. It now includes
close to 40 team members structured withclear lines of responsibility. Sub-teams
cooperate closely and report directly
to Matt Christensen, Global Head of
Sustainable and Impact Investing.
Sustainable Investment Office (SIO)
team: shapes AllianzGI’s overallsustainable investment strategy andpolicies and its sustainable productstrategy, as well as leading key
initiatives. The team plays a critical role inproviding knowledge to clients and otherstakeholders on AllianzGI’s sustainable
investment capabilities.
Sustainability Methodologies andAnalytics (SMA) team: responsible fordriving innovation using state-of-the-art
technology and ESG data. This includes
employing artificial intelligence (AI),natural language processing (NLP)
and new forms of data to support
the Sustainability Research team,developing new methodologies acrossasset classes, delivering innovative tools
for our investment platforms and shaping
client-oriented solutions. The teamoversees ESG integration and scoring
approaches and develops the climate
strategy dataset.

05 Appendix

Principles

Sustainability Research andStewardship teams: manage thematic
research and engagement strategy anddevelop a thematic approach along
the strategic topics of climate change,planetary boundaries and inclusive
capitalism. The Stewardship team leads
AllianzGI’s engagement and proxy-voting
activities globally.
Strengthening our focus on
corporate sustainability
In May 2022, we established the role ofCorporate Sustainability Officer (CSO) toensure AllianzGI’s organisational businesspractices are environmentally and sociallysustainable. The CSO communicatesand coordinates with management,clients, employees and community
partners to address sustainability issues.
The role develops, manages and monitors
the corporate sustainability strategy.
Widening our climate knowledge
The members of the Sustainable andImpact Team have a diverse range ofprofessional backgrounds including
finance, investment, legal, environmental
and sustainability expertise. The team1

2

is gender-balanced as part of ourcommitment to diversity, which enables
us to create a holistic and interdisciplinary
view on all aspects of sustainable
investment. We continuously assess thetraining needs of the team and several
team members have participated in the
CFA UK Level 4 Certificates for Climate
and Investing and Investing in ESG,
helping to develop this course which wasin its pilot phase at the time. The outcomeof this was to widen the spread of climate
knowledge, which in turn means we canbe more effective in deploying relevant
expertise across our activities suchas engagement.
Growing our impact investing expertise
Impact investing is an important and fastgrowing asset class that facilitates positivechange while resonating with growinginterest from clients. Opportunities are
increasing fast, particularly in private
markets. Where investors previously
thought only in terms of risk and reward,
they can now add impact as a third
dimension of oversight for their portfolios.

5 Solidarity goals are corporate goals specific to Allianz Global investors which include, for example
financial targets, client service metrics, employee engagement targets.

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01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

01.2 Strengthening sustainability governanceTo leverage the growth opportunity,
we must ensure that our investments
create credible impact and measure
and report on this impact.
Our Impact Investing team is responsible
for managing private equity socialand environmental impact portfolios
and prioritising commercial capital toachieve the UN Sustainable Development
Goals. The Impact Measurement andManagement team developed andlaunched AllianzGI’s impact framework
in 2021. The framework – designed toensure high standards of impact due
diligence, measurement and management– has since been fully integrated into
the Allianz Impact Investment Fund’s(AIIF) investment process, with AIIF also
publishing its inaugural Annual Impact
Report in 2022. The framework is in theprocess of being integrated into a numberof upcoming impact investing strategies.
See section 02.6.

01.2.3 Robust review and assurance
The credibility of our approach, as reflectedin our internal processes and externalreporting, is crucial to ensure trust in
our company. We have sound processes
in place to review ESG-related policies

05 Appendix

Principles

and procedures at least annually toensure continuous improvement. In 2022,
this included strengthening our corporate
governance guidelines and proxyvoting policy.
See section 03.7.2.
We also reviewed our processes tomeet the requirements of sustainability
labels for our funds when it comesto engagement.
Review processes are led by our
Sustainable Investment Office andStewardship team. All review processes
are based on regulatory requirements

and developments in the jurisdictions inwhich we operate. To be at the forefrontof sustainability regulation, we set
up a global regulation workstream
to implement sustainability-related
regulation into our business including
into the investment approach.
In 2022, we were implementing new
regulation in Hong Kong, Singapore
and Taiwan as well as in the EU.
Rules are focusing on governance andrisk management as well as detailed
and stringent disclosure. The EU has also
introduced sustainability preferences
in investment advice and portfolio

1

2

5

management services due to changes
stemming from the Markets in Financial
Instruments Directive (MiFID) II.
AllianzGI’s Executive Committee reviewed
and approved this Sustainability and
Stewardship Report 2022. In doing
so, they consider the report to provide
a fair and balanced view of ourapproach to sustainable investing andstewardship activities as well as corporate
sustainability initiatives. Initial input
was provided by the respective teams
responsible for the various activities,
with overall review by the Sustainability
and Impact Team.

Organisational structure – Sustainability and Impact Team
Sustainability and Impact Team

Sustainability Researchand Stewardship
Sustainable
Investment
OfficeAllianz Global Investors Sustainability and Stewardship Report 2022

Sustainability
Methodologies andAnalytics

Impact Investing
Private Markets
Sustainability
Research

Corporate
Sustainability

Stewardship22

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

01.3 Guiding clients on sustainable investment solutions
As an active asset manager, we create solutions and productsthat address clients’ evolving investment objectives. We manage
EUR 506 billion6 across all asset classes in public and private
markets for our global client base and aim to give investors accessto a broad range of sustainable investment strategies.
Since the inception of our first sustainable
investment strategy in 1999, the numberof sustainable products we offer reached
177 at the end of 2022, up from 150
at the end of 2021. In 2022, we converted
31 mutual funds to a sustainable
investing approach and launched five
new sustainable funds – a path we aim
to continue in the future.7
Interest in sustainable investment
strategies continues to increase among
both retail and professional investors.
Both client segments are demandinga higher level of sustainability-driven
considerations within the investment
process and they want to better
understand sustainability features.
Almost every request for proposal (RFP)or fund selection due diligence process
we are part of now contains multiple
ESG‑related questions aiming to assess

our ESG credentials, internal researchcapabilities, the robustness of our
methodologies and the extent towhich ESG criteria are considered andincorporated in investment processes.

01.3.1 Engaging with clients
Engaging with clients is an opportunity
to help them understand their sustainable
investing preferences and objectives.
This has been especially important in thecontext of the war in Ukraine. With energy
prices rising sharply, fossil fuel-basedenergy production expanding in several
countries and weapon-producing
companies being among the strongest
outperformers in 2022, we provided
perspectives and guidance through ourthought leadership communications,
including “Sustainable Minute” videos
on social media and dedicated client
update calls.

05 Appendix

Principle

We also share our investment expertise
via client meetings and host regularclient events on sustainable investing.
These provide a platform for renowned
keynote speakers and AllianzGI’s own
sustainable investment experts to discuss
the opportunities and challenges ofsustainable investing, emerging regulatory
frameworks across jurisdictions, and themeasurability of sustainable and impact
investment strategies. In 2022, we hosted
the Global Sustainability Days – a two-day
online event during which experts andguest speakers from across the industry
debated the most pressing sustainability
issues. Together with our clients,
we explored topics ranging from thefuture of sustainable finance regulation
to the twin crises of biodiversity loss andclimate change, and how to advanceinclusive capitalism.
During regular client meetings,
we discuss stewardship activities andgain important insights into engagement
themes clients would like us to prioritise.
For certain portfolios, we hold dedicated
ESG feedback meetings to discuss thedecarbonisation pathway of the portfolio
and the outcomes of engagement

6

and voting. The climate strategies
of companies are a particular focusof these meetings. We also provided
clients with insights on our voting policy
review, voting processes and decisions.
In these conversations we collected
feedback on where our processes could
be improved and transparency enhanced.
Feedback was used to inform our proxyvoting policy review.

01.3.2 Maintaining our position as aclient service leader
Our focus on providing guidance onsustainable investment solutions is part ofa wider commitment to clients as we lookbeyond pure economic gain to develop
strong and enduring relationships.
Our aim is to create value together andwe want every interaction to support
this goal. We elevate clients’ investing
experience by understanding theirindividual needs, providing the rightsolutions and always acting in theirbest interests. Drawing on our toolkit ofcapabilities, we create solutions that help
clients achieve their investment objectives
today and in the future.

6 Data as at 31 December 2022.
7 These figures relate to EU-domiciled funds that are classified as either Article 8 or Article 9 under SFDR.

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01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

01.3 Guiding clients on sustainable investment solutions

Our commitment is demonstrated in
independent client satisfaction surveys
which consistently highlight client service
as one of AllianzGI’s main strengths.
We are consistently ranked in the firstquartile against competitors across all
relevant major markets in the annual
Coalition Greenwich survey.8 We are alsoa quality leader – as certified by Coalition
Greenwich for more than a decade –with technological capabilities and client
service procedures that ensure we stayclose to clients. As well as validating ourapproach, the findings of these surveys
are invaluable for continuing to enhance
our service.
Highlights from the 2022 Coalition
Greenwich Report:• Twelfth consecutive year as Greenwich
Quality Leader in institutional
investment management in Germany,and fifth year in Continental Europe.
• Fifth consecutive year as Greenwich
Quality Leader in overall European
intermediary distribution quality.
• Greenwich Quality Leader ininstitutional investment management
and intermediary distribution in Asia.
• The leading strategic advisor and ESG
investment manager for institutional
clients in Continental Europe.

01.3.3 Supporting institutional clientsto set their sustainability agenda
We understand it is part of our fiduciary
duty to help institutional clients understandand fulfil their long-term financial
obligations and navigate their present
and future investment challenges.
Institutional clients have seen rising
regulatory pressure around the disclosure ofsustainable investment activities, particularlyin the EU. There is also a bigger drive to aligninvestment activities with specific values
and long-term sustainability convictions.
Consequently, our clients are looking fora strong partner in understanding theimplications of the fast-evolving regulatoryenvironment and seeking to capture
opportunities, aligning with carbon-reduction
commitments and assessing which activities
they want to finance or divest. Our goal is tohelp clients implement investment solutions
that fit their own values framework while
adhering to the highest quality standards.
Our track record in sustainable investingallows us to share knowledge and bestpractices with our clients to support themin setting their sustainability objectives
and finding the most appropriate
investment solutions.

Allianz Global Investors Sustainability and Stewardship Report 2022

Principle

As part of this engagement, we help
clients understand current sustainability
developments and regulatory changes.
We typically analyse the sustainability
features of their current portfolios, assess

6

impacts of different sustainable investment
approaches and help to formulate theirsustainability objectives, with the objective
being to support the implementation andfurther enhancement of their approach.

Our global asset and client mix9
EUR billion
Asset class split

85

Client split

162

158

117
348
142
Fixed income
Multi-asset
Equities
Private markets

Institutional business
Retail business8 Coalition Greenwich.
9 Data as at 31 December 2022. Total assets under management are assets or securities portfolios,
valued at current market value, for which Allianz Asset Management companies are responsible vis-àvis clients for providing discretionary investment management decisions and portfolio management,
either directly or via a sub-advisor. This excludes assets for which Allianz Asset Managementcompanies are primarily responsible for administrative services only. Assets under management aremanaged on behalf of third parties as well as on behalf of the Allianz Group. Source: Allianz Global
Investors. Any differences in totals are due to rounding. Environmental, social and governance (ESG).
Diversification does not guarantee a profit or protect against losses.

24

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

01.3 Guiding clients on sustainable investment solutions

Principle

6

Shaping sustainable pathways towards change

Providing sustainable investment advice with risklab
risklab is AllianzGI’s
advisory and solutions
unit helping investors
with asset allocation, risk
management, private
markets implementation
and achieving sustainable
investment goals.
In 2022, risklab continued to expand
its sustainable investing expertiseby allocating further resources to its
Sustainable Investment Advisory team.
The three pillars of its advisory offering
aim to support clients to navigate
complex sustainability journeys
and shape the future of sustainable
investing together, as demonstrated bythese representative client questions
and key areas of our responses.

Sustainable investment challenges faced by our clients and answers offered by risklab

Sustainability transparency
What is the carbon footprint of mycurrent portfolio?
In which parts of my portfolio
do I face security-based
reputational risks?
Progress in 2022
• Best practice analysis via peer groupstudies of different investor groups(eg, pensions, insurers) and theirsustainable investment behaviour.
• Proprietary analytics tool upgradedto a cloud-based application(SARAH 2.010) together with additional
advisory modules (eg, net zero advice)
and incorporating supplementarysustainability and financial data frominternal and external sources.

Actionable advice
How do different climate scenarios
impact the achievement of my risk
and return goals?
Which benchmarks can I use todecarbonise my portfolio or lower
my climate transition risk?
Progress in 2022
• Climate scenarios (according to
NGFS11 and incorporating physicaland transition risk) integrated into ourcapital markets model to help clientsassess the risk of return shortfalls due
to climate risk and align their strategic
asset allocation accordingly.

Customised solutions
 ow can I increase my allocationH
to green bonds, while notsignificantly shifting my portfolio’s
financial characteristics?
How can the positive impact
generated by the projects
underlying the green bonds bereflected in my reporting?
Progress in 2022
• Partnering with clients and portfolio
managers to jointly develop customised
solutions that fit the client’s needs
and implement shifts in strategy(eg, increase in green bonds/decreasein carbon intensity in a corporatebond portfolio).

10 Sustainability Analytics, Research & Advisory Hub.
11 The Central Banks and Supervisors Network for Greening the Financial System (NGFS), a group of central banks and supervisors willing, on a voluntary basis, to exchange experiences, share best practices,
contribute to the development of environment and climate risk management in the financial sector, and to mobilise mainstream finance to support the transition toward a sustainable economy.

Allianz Global Investors Sustainability and Stewardship Report 202225

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

01.3 Guiding clients on sustainable investment solutions

Shaping sustainable pathways towards change

Supporting a client to define
actions based on investor
goals and preferences
In a joint effort with a German family office, we conducted asustainability preference assessment with their key stakeholders
to inform the client’s sustainable investment direction.
We also carried out a status quo
analysis for parts of the client portfolio
via our Sustainability Analytics,
Research & Advisory Hub (SARAH).
The process started with a workshop
on sustainable investing, best practicesof global and European family
offices, ESG regulation and in-depth
analysis of sustainable investing
approaches and the respective
benchmarks. We conducted polls
and questionnaires with stakeholders

and investment managers and used
the outcomes of these to define a
potential framework, which included
an exclusion policy, participation
in initiatives and decarbonisation
goals based on the preferences andgoals of the investors. Following this,we delivered an analysis of the client
portfolio across different sustainability
metrics such as ESG rating, exposure
to controversies, and carbon emissions
and intensity.

Allianz Global Investors Sustainability and Stewardship Report 2022

05 Appendix

Principle

We assess the ambition levels of clients
through questionnaires and by discussing
best market practice. This enables us
to determine their preferences andmotivation, while considering existing
policies and potential memberships
and commitments to organisations andprinciples of sustainable investing. As acore feature of our advice, we help clientsgauge their portfolio sustainability profileand quality in combination with financial
risk-and-return characteristics.
To leverage the sustainability expertise
within AllianzGI, risklab collaborates
with our investment platform regarding
investment solutions, investment trends,
best practice and implementation.
Analytical capabilities are aligned with andenhanced through close collaboration with
AllianzGI’s Sustainability Methodologies
and Analytics team, which identifies,
manages and masters sustainability data
and develops proprietary analytical tools
and methodologies.

6

The widening
spread of specialist
technical knowledge
enables us to draw
on team resource
more efficiently.
We will continue to expand our offering
by developing additional quantitative andqualitative advisory modules, angles ofanalysis in the simulation of sustainable
investment approaches and a potential
extension of asset classes in portfolio
analytics and capital market modelling.

26

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

01.3 Guiding clients on sustainable investment solutions

05 Appendix

Principle

6

Shaping sustainable pathways
towards change

Shaping sustainable pathways towards change

Collaborating with a large
public pension fund to
implement climate policy
We engaged with a leading
French public pension fund tosupport the implementationof its ambitious climate policy.
The asset owner committed toassign reserves to a decarbonisation
pathway towards a 1.5°C scenario
and set stringent standards related toportfolio decarbonisation, shareholder

engagement and exclusions. For the
portfolios we manage on behalf of
the asset owner, dialogue concerning
measurement of decarbonisation
objectives, limits of carbon metrics
and phasing-in of Scope 3 data is
ongoing. Our collaboration is enabling
the institution to focus on real-world
climate impacts using forwardlooking climate data to complement
backward-looking carbon metrics.

Allianz Global Investors Sustainability and Stewardship Report 2022

Accompanying ourlargest client on its
path to net zeroManaging over EUR 200
billion for our shareholder,
Allianz, we are a key partnerin helping it to reach its
ambitions across public andprivate markets as a founding
member of the Net-Zero Asset
Owner Alliance.
We are working with Allianz to reachan interim greenhouse gas (GHG)
emissions reduction target of 25%
by the end of 2024 across the listed
equity and corporate bond investmentsthat AllianzGI manages on behalfof Allianz, and by the end of 2025
for infrastructure equity investments.

27

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship01.3 Guiding clients on sustainable investment solutions

04 Corporate sustainability

05 Appendix

Principle

6

Shaping sustainable pathways towards change

Creating real-world impact
in private markets
Through our private markets impact investing strategies,
we are committed to delivering positive environmental andsocial outcomes, which include supporting climate solutions
that foster the transition towards a low-carbon economy
in developing and developed markets.
We launched our latest investment vehicle– the Emerging Market Climate Action
Fund (EMCAF) – in late 2021 jointly with
the European Investment Bank (EIB).
EMCAF is an innovative blended equity
fund that finances climate mitigation
and adaptation as well as environmental
projects in Africa, Asia, Latin America,
and the Middle East. We will also belaunching a blended climate solutions
debt strategy (Allianz Climate Solutions
Emerging Markets), in partnership with
Allianz Group and a regional development

finance institution (DFI), which will invest
alongside other DFIs in Paris Agreementaligned projects. AllianzGI’s developed
markets-focused impact strategy – theAllianz Impact Investment Fund (AIIF)– actively pursues direct and indirect
investments that generate positive
measurable environmental and social
impact. We will additionally be buildingout our impact offering via a dedicatedstrategy providing tailor-made credit
solutions to impactful companies indeveloped markets.

Allianz Global Investors Sustainability and Stewardship Report 2022

28

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

01.3 Guiding clients on sustainable investment solutions

01.3.4 Increasing transparency ofsustainable investments
With the growth in sustainable investing,demand is increasing among investors
and regulators for greater transparency
over the performance and impact ofinvestments. We support this shift andhave provided monthly reporting onsustainable investments to our clients
since 2020. Clients can view theirsustainable investments compared to the
product benchmark and see the carbon
footprint of their portfolios in absoluteand relative terms, as well as an overview
of the engagement activities relevant to
the fund.
We are constantly enhancing ourreporting to meet evolving regulatory
requirements and client needs. Our goal
is to make sustainable information
digitally accessible via a dedicated client
reporting portal for institutional clientsand distributors. The application weare developing will allow continuous
enhancements as reporting requirements
and client needs evolve. Our clients’stewardship and investment principles
shape how we manage their portfolios,
and we evolve our processes andreporting in line with their needs.

For example, in our conversations withsome large clients, we observed thatthey would like to receive more granular
reporting of engagement conversations
with companies held in portfolios.
Navigating the shifting
regulatory landscapeThe redirection of capital flows to financesustainable growth is becoming anever-greater priority for policy makers as
financial market participants represent
an important catalyst for channelling
private investments to create a moresustainable economy.

05 Appendix

Principle

Regulators in Europe and Asia Pacific are
introducing various sustainable financeregulations to ensure policy objectives ofgreener and more inclusive financial flows
are delivered and to increase transparency
for investors. For example, the EU Action
Plan on Financing Sustainable Growth
includes common classification ofenvironmentally sustainable activities
within the EU sustainable financetaxonomy, and enhanced disclosure
requirements for financial markets with
the Sustainable Finance Disclosure
Regulation (SFDR) and the Corporate
Sustainability Reporting Directive (CSRD).

6

by participating in major regulatory
consultations. For example, AllianzGI wasa member of the former EU TechnicalExpert Group, and has been a member ofthe EU Platform for Sustainable Financeduring its first term ending in 2022,
continuing into its second term in 2023.
We have initiated an ESG Programme
to implement the required processes
and enhance our product offering
to ensure we are prepared to meet
regulatory obligations and client demand
for sustainability.
Major activities in 2022 included:

We aim to help
shape the regulatory
landscape byparticipating inmajor regulatory
consultations.

Allianz Global Investors Sustainability and Stewardship Report 2022

It also required that sustainability is
integrated into the investment process andinvestment advice through amendmentsof the funds, asset management andinsurance regulations. In Asia Pacific,
initiatives are underway in various markets
to increase sustainability disclosure
requirements and integrate sustainability
risk into the investment process.
AllianzGI is taking an active role in thedevelopment and implementation ofsustainable finance regulation in orderto ensure a sensible outcome. We aim
to help shape the regulatory landscape• Integration of sustainability risk
and principal adverse impact (PAI)
assessments into the investment process,as of 1 August 2022.
• A review of our product offering
to address investors’ sustainability
preferences according to MiFID II.
• Detailed disclosure to createtransparency on Article 8 and 9 products
and meet the SFDR Level 2 requirement,
as of 1 January 2023.

29

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

01.3 Guiding clients on sustainable investment solutions

Principle

6Regulation is driving greater transparency in sustainability

Companies

can issue
green bonds

Corporate Sustainability
Reporting Directive (CSRD)
Disclosure requirements
for companies

can issue/invest
in green bonds

FMPs require Companies’ disclosure tofulfil own transparency requirements

Companies to disclose
Taxonomy share of
their activities

Corporate Sustainability Due
Diligence (CSDD) Directive
Due diligence and supply
chain obligation

EU Green
Bond Standard
Voluntary standard
for green bonds

Taxonomy Regulation
Framework to define environmentally
sustainable activities

Financial Market
Participants (FMPs)

End Investors/
Beneficiaries

SFDR
Disclosure requirements forfinancial market participants
FMPs todisclose
Taxonomyshare of
ESG products

Investors to receive disclosure(pre-contractually and regular reporting)Relevance of
SFDR terms
and disclosure:
Sustainability
risks and principal
adverse impact

Screening criteria
for four remaining
objectives

Asset Managers, Insurers, Pension Fund Providers
UCITS, AIFMD, MiFID II, Solvency II
Integrating sustainability risk and adverse
impact in investments and risk management

Relevance of SFDR terms anddisclosure: Taxonomy andsustainable investment shareand principal adverse impact

Distributors

MiFID II, IDD
Integrating sustainability preferencesin advice and portfolio management

Distributors toenquire investors’
sustainability
preferences

European Supervisory Authorities (ESAs), European Commission: Q&A
ESAs: Proposal on greenwashing (based on call for evidence)
European Securities and Markets Authority (ESMA): Fund naming rules
Colour code

applicable

final

proposal

expected

legislation

guideline

Source: AllianzGI.

Allianz Global Investors Sustainability and Stewardship Report 202230

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

02
Sustainable investing

Shapingsustainable
solutions
Allianz Global Investors has been an active responsible investor
since its first sustainable investing portfolio was launched in
1999. Our guiding theme in 2021 was shaping sustainable
pathways across public and private markets. We maintained
this in 2022, leading clients and companies on an inclusivetransition by aiming for sustainable growth and meaningful
impact alongside financial returns.

Allianz Global Investors Sustainability and Stewardship Report 202231

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

02.1 Evolving our approach to sustainable investing

Principle

1

Our sustainable strategies are built on a proprietary best-in-classmodel and in-depth research. We draw on our deep experience todesign pathways for clients, wider stakeholders and the companies
we invest in to help advance their sustainability journeys.
As information on companies’
environmental, social and governance(ESG) practices becomes increasingly
robust and accessible, we continuously
refine our ESG ratings model and makeproprietary sector, thematic and stockspecific research available to all ourinvestment professionals. Deep ESG
awareness and our culture of close
collaboration between sustainability
analysts and portfolio managers within
the firm is one of our key strengths.

We are evolving our sustainable
investment strategies to meet anincreasingly broad range of client needs
and objectives. Active stewardship and
ESG risk assessment ensure that our
portfolio managers have full transparency
on E, S and G scores and principal adverse
impacts (such as CO2 emissions, water use,etc) for each holding in a portfolio andon aggregate.

2022
1999

2007

2021

NZAMi

Data insights engine• Launched our
first sustainable
investing strategy• Among the first 50
asset managers tosign the Principles
for Responsible
Investment (PRI)• Expanded andstrategically reshaped
our sustainability teamunder the leadershipof Matt Christensen,
Head of Sustainable
and Impact Investing• First Net Zero AssetManagers initiative
commitments
submitted in
April 2022

• Go-live ofSustainability
Insights Engine(SusIE) as a central
ESG data portal andenabling input into
investment decisions

Allianz Global Investors Sustainability and Stewardship Report 2022

2022
Continued

32

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

02.1 Evolving our approach to sustainable investing

Principle

If 2022 was a year of uncertainty,
2023 will be a defining year forsustainable investing. Our focus on
creating pathways to change will guideinvestors on the journey from an ESG
risk focus towards broader sustainability
and, ultimately, to generating meaningful
impact through their investments.
Our 2023 plans will see further
implementation of our conviction-led
approach including:• Guiding clients to better understand theinvestment risks and opportunities ofkey sustainability themes.

1• Climate action – taking a long-term
approach to climate and decarbonisation.
• Transition to a more sustainable futureand how to facilitate that with ourclients and industry stakeholders.
• Increasing the scalability of our solutions
to achieve greater real-word impact.
• Implementing our impact frameworkfrom private to public markets andacross different asset classes.
• Building on the sustainability insights
engine as a proprietary tool feeding
into research, stock selection,
reporting, and compliance.
• Strengthening our firm-wide knowledge
and capabilities around sustainable
investing for integrated client service.

2022
Data

Research

Stewardship

Private markets

Regulation• Launch of new key
performance indicator(KPI) carbon approach toenhance methodology set• 16 sector frameworks developed as input for
stewardship activities and investment decisions• Admitted as asignatory of the UK
Stewardship Code• Continued success inblended finance with
EMCAF endorsement by
G7 alongside conversion/development of >10
Article 8 and 9 products• Successful implementationof MiFID II and SFDR L2.
AllianzGI funds account for >40%of European market-wide Article
8 and 9 funds committed to all
3 MiFID sustainability parameters• >460 assessments on sustainable business activities
conducted as basis for MiFID II commitments• 11 thematic papers published

Allianz Global Investors Sustainability and Stewardship Report 2022

• Externally recognised
focus on social andclimate voting33

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

02.2 Sustainability research2022 highlights

11

thematic papers
published250

sustainability analyses
performed oncompanies worldwide

16

sustainability sector
frameworks developed

Principle

The Sustainability Research team isa cornerstone of AllianzGI’s active
investment approach. It conducts
proprietary research on sustainability
issues and helps translate them into
impactful investment insights which areshared with investment professionals via
the AllianzGI collaboration platform.
To identify, monitor and analyse the most
relevant sustainability issues, the teambuilds and formulates views throughthree interconnecting perspectives –thematic, sector and company research.
Joined up working ensures a robust andholistic approach to ensure pertinentand coherent rationales. For example,
thematic research informs the materialityof sustainability factors for different
sectors, which are then reflected incompany analysis and engagement,
while inversely company analysis
and engagement loop back to shape
our thematic and sector approach.
This expands the breadth and depth of
our coverage of sustainability issues andtheir implications for investments.

Allianz Global Investors Sustainability and Stewardship Report 2022

7

Three interconnecting research perspectives

Company research
Close monitoring and analysis
of a focus universe – defined to cover
the emblematic sustainability issues

Sustainability
research
Thematic research
Develop and articulate
views on key issues
within our three pivotal
sustainability themes.
See page 15

Sector research
Identify trends anddevelop sector views
with a framework
to assess sustainability
practices of investees anddrive engagement
projects

34

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship02.2 Sustainability research04 Corporate sustainability

05 Appendix

Principle

702.2.1 Thematic research
Thematic research is organised
across our three pillars of climatechange, planetary boundaries andinclusive capitalism.
This research informs our experts’consideration of investments in these
themes by providing a clear understandingof underlying sustainability topics.
The team shares insights internallyand externally through papers
and publications.

11

In 2022, we publishedthematic papers coveringa broad array of topical subjects
through the year.

Insights, publications and papers
Unlocking the “S” in capitalism – Nicole Papassavas &Marie Rupp (Feb 2022).
How do recent events in Europe affect the opportunities
in transitional energy? – Julien Girault (Mar 2022).
The crisis on our plates: finding potential in failing foodsystems? – Mélissa Bourassi (Jun 2022).
Diversity comes of age as an investment theme –Guirec Thouement (Jun 2022).
Energy transition and energy security – complementary
or conflicting? – Julien Girault (Sep 2022).
Defending the defensible: is the defence sector
sustainable? – Guirec Thouement (Oct 2022).

Allianz Global Investors Sustainability and Stewardship Report 2022

COP 27 preview: regaining momentum – Matt Christensen(Nov 2022).
Nuclear and gas in the EU taxonomy: what this means forthe energy mix of tomorrow – Jingying Han (Nov 2022).
Access to healthcare: more important than ever –Nicole Papassavvas (Oct 2022).
COP 27 review: progress amidst the setbacks –Matt Christensen (Nov 2022).
COP 15 preview: the “Paris moment” for nature? –Mélissa Bourassi (Nov 2022).

35

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

02.2 Sustainability research

Principle

7

Shaping sustainable pathways towards change

Unlocking the S in capitalism
Social issues have typically been overshadowed by otheraspects of sustainability, such as climate change.
This is beginning to change as the eventsof recent years have shone a light oninequalities in access to essentials andopportunities. The solution calls for a
new brand of capitalism.
In “Unlocking the S in capitalism”,
we discussed the theme of inclusive
capitalism and highlighted lessons
learned about the social impact ofrecent crises on life essentials (basic
essentials to support life, such as

food or energy) and livelihood
essentials (essentials in the modern
economy, such as education anddigital access). The social issues
caused by such inequalities canhold back growth and resilience ofeconomies and may be exacerbatedby climate change and digitalisation.
Inclusive capitalism provides a solution
as part of a more inclusive approach toeconomic growth.
Read our research paper.

Allianz Global Investors Sustainability and Stewardship Report 2022

Shaping sustainable pathways towards change

A crisis on our plates: finding
potential in failing food systems
The war in Ukraine highlighted risks in how we
produce and consume food.
As a rising global population increases
pressure, there is an urgent need tobuild a resilient and inclusive foodecosystem that meets planetary andsocial needs. There are opportunities
for investors across the value chainof global food production anddistribution to help mitigate these risks.
In “The crisis on our plates: finding
potential in failing food systems”,
we highlight the pressures on the
global food system that are reducing

availability, affordability and resilienceand discuss why a radical rethink isneeded. A long-term view is crucial but
complex, and recent stresses on foodsystems have amplified the need forinvestors, businesses and policymakers
to act now. Investors can play animportant role in directing capital
towards shaping a sustainable foodecosystem and supporting the shift toa more inclusive, equitable future.
Read our research paper.

36

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

02.2 Sustainability research

02.2.2 Sector research
Sustainability issues differ by sector andunderstanding this context is central
to our company assessments. We haveintroduced frameworks for 24 broad
sector segments resulting from the mergerof adjacent Global Industry Classification
Standard (GICS) industries with similar
ESG issues. Frameworks are developed
exclusively for internal distribution as atool to empower the investment platform
to focus and engage on what is mostmaterial based on a better understandingof the topical issues.
We published sector frameworks for 16
sectors in 2022 with the remainder to be
finalised in 2023. Each sector framework
sets out key material sustainability factors
for the sector and how to integrate these
into investment decisions and engagement.
Presented in a concise two-page summary
format, each framework focuses on themost relevant issues to demonstrate astrong view for the given sector.
The first page provides an overview
of the sector from a data perspectivewith KPIs related to GHG emissions,workforce safety, controversies and board
structure in absolute and relative terms.

Principle

In collaboration with the Sustainability
Methodologies and Analytics team,indicators are selected considering theirrelevance, availability and reliability.

Our approach to sector research

GICS
sector based

The second page provides a materiality
map and key engagement themes
for the sector. The materiality map isdivided across four pillars – environment,social, business behaviour and corporate
governance – which each have four
underlying factors, examples of which
include climate change, health and safety,
business ethics, corporate/sustainability
leadership and disclosure. For eachsector the responsible analyst ranks
these factors on their materiality level
over a scale ranging between relevant,significantly relevant and moderately
relevant. The main topics of engagement
are developed in collaboration with the
Stewardship team.
We also consolidate individual sectormateriality maps into an overarching
Sustainability Materiality Matrix to coverthe 24 sectors and 16 factors. This matrix
is a core input for our proprietary rating
system with regards to setting the sectorspecific weightings for the four pillars andthe 16 factors.

Allianz Global Investors Sustainability and Stewardship Report 2022

7

Sector frameworks
provide a view onmateriality issues

24 sector frameworks• 24 materiality maps

Overview data driven• Climate indicators• Four pillars• Sustainable KPIs

• 16 factors• Controversies

Five main
engagement
topics37

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

02.2 Sustainability researchCompany analysis combines a proprietaryrating system and qualitative researchusing the outcomes of thematic and sector
research to focus on the most relevant,and possibly controversial, aspects ofan entity’s profile. This approach has
guided us to develop a new format forsustainability company profiles. We focus
on the most impactful, controversial ordivisive investee companies.

StewardshipPower ofcollaboration

bi

y

lit

Allianz Global Investors Sustainability and Stewardship Report 2022

earch
Res
y
t
ili
ab
n
i
ta
us

ina

Thematic research projects run by our
Research team, for example on biodiversity,
are a cornerstone of these engagement
activities and the discussion between the
Research and Stewardship analysts help
to form a joint view on the objectives whenengaging our target companies.

Putting collaboration at the heart of our research approach

st aCompany reviews often trigger active followup actions and engagements. These areframed together with the Stewardshipteam to combine research findings withengagement experience. We strengthened
collaboration between teams in 2022.

Research and Stewardship at AllianzGI
We are pursuing an engagement
approach with an activist sustainability
orientation as part of our ambition to be asustainability shaper. In 2022 we evolved
our engagement strategy, focusing among
others on thematic engagement.
See section 3.1.

7SuFor each company, we review humanrights and the four pillars of environmental,social, business behaviour and corporate
governance. We provide insights into bothabsolute and relative scores. In addition
to the dedicated research focus list,
the Research team provides ad-hoc
reviews based on emerging developments,
controversies or where data providers
diverge on assessments. In 2022,
we completed in-depth sustainability
analysis of over 250 entities.

Proxy voting continued to be acollaboration track for aligning voting
decisions with research views andcapturing the implications of annual
general meeting (AGM) outcomes incompany, sectoral or thematic analysis.
For example, our updated climate
materiality analysis in the sector
framework for financials instructed our
proxy voting decision for the high profile
say-on-climate proposals at several
banks in 2022.

S

02.2.3 Company research

Principle

M

et

ho

do

lo g

y an

d A n aly ti c s

Deep dives on thematics
Identify high-risk issues
Elevate expertise to next level38

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

02.3 Sustainability methodologies and analytics
02.3.1 Ensuring robust data
and methodologies
The Sustainability Methodologies
and Analytics team is responsible for
ESG integration, socially responsible
investment (SRI) scoring methodology anddevelopment of the analytics dataset forclimate strategy, KPI target setting and
SDG measurement.

Our long-term strategy is to use ourproprietary research as the primary
driver of ESG insights and investment
decision-making. This will be madepossible through new AI technologies andalternative data sources to expand therange of available data and perspectives,
smart analytics and real-time signals
relating to company behaviours.

ESG data is the foundation for every
sustainability-informed investment
decision. We use multiple third-party
providers and have access to a hugeamount of data relating to companies
around the world. To supplement
third-party data, we also harvest
differentiable, material information on
ESG premia through our own investment
research processes.

How we select and monitor data providers
We use a robust Request for Proposal(RfP) process to select third-party
data providers. This assesses data
origin, methodology (qualitative and/or quantitative), raw data points,
issuer coverage, resources in place,expertise, granularity of research,approach, IT support, client support,
and consistency/quality of data feed.

We continuously monitor the quality of
key service providers through service levelagreements or operating memoranda.
Allianz Global Investors Sustainability and Stewardship Report 2022

Principles

Data is sourced from providers directly
into our internal cloud-based datalakein line with AllianzGI’s data strategy.
Close monitoring and constant update ofdata points is supported by technologies
such as application programming
interfaces (APIs) and secure file transfer
protocols (SFTPs). Controls apply todata flows and their evolution over time
(coverage, expected values, etc) to track
potential issues upstream in our data
supply chain.
We continuously monitor the quality of
key service providers through service levelagreements or operating memoranda.
Depending on the nature of the service,business owners may receive regular
information from service providers to
inform on the quality of the services(eg, standard KPIs and other information).
The independent Risk Management
function reviews monitoring proceduresof key service provider relationships
implemented by the respective businessowner in line with AllianzGI’s key vendor
and outsourcing provider policy.
See section 03.8.

482022 highlights

100+

sustainability analytics
available through ourinsights engine SusIE

10

third-party data
providers

10,000+companies rated
by proprietary
sustainability
methodology

178

countries rated
by proprietary
sustainability
methodology

39

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

02.3 Sustainability methodologies and analytics

05 Appendix

Principle

4

Leveraging ESG data also supports
the development of innovative sustainable
investment approaches.
Leveraging ESG data
Developing robust methodologies andanalytics based on the overall ESG
dataset to which we have access is one ofAllianzGI’s core competencies. This begins
with methodologies to assess the ESG
characteristics of issuers, both corporates
and sovereigns. It includes climate
analytics to monitor the impact of climatechange and the Paris Agreement-aligned
commitments of a specific corporate.
Improved corporate disclosure
informs the design of innovative
proprietary frameworks for evaluating
sustainability risks and opportunities.
Leveraging ESG data also supports thedevelopment of innovative sustainable
investment approaches.

Allianz Global Investors Sustainability and Stewardship Report 2022

Our new KPI approach was rolled out
over 2022. It considers and addresses
environmental and social challenges
within the portfolio construction process
by defining sustainability as a KPI
objective that must be met at portfolio
level. Targeted, measurable and reported
outcomes on the carbon intensity KPI willserve to strengthen our approach. In 2023,
we will develop additional KPIs including,but not limited to, sustainable investment
share, net zero alignment share andbiodiversity footprint.

40

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

02.3 Sustainability methodologies and analytics

05 Appendix

Principles

2

4

Shaping sustainable pathways towards change

AllianzGI Sustainability
Insights Engine (SusIE)
Leveraging ESG data enables our investment experts to implement
innovative sustainable investment approaches.
An effective interface is required to allow
credible firmwide integration of ESG withefficient processing of proprietary models,
high democratisation of sustainability
data and consistent embedding of ESG
data in investment processes.
In 2022, we launched SusIE to enable
ESG-informed investment decision making.
The digital platform uses state-of-the-art
technology to facilitate mainstream accessto a range of ESG data in one place for all

our investment experts, product specialists,risk management and other stakeholders.
SusIE is a key enabler of active investment
decisions on sustainability across all asset
classes, feeding all front-office tools withconsistent ESG data. This contributes
to our differentiation, leveraging our
expertise via a powerful proprietary
engine that delivers added value toour clients.

Screenshot of ESG Profile >Dashboard at company level

Allianz Global Investors Sustainability and Stewardship Report 2022

Screenshot of ESG Profile > Scores section

A wide range of external ESG datasetscomplemented by in-house research
Our multi-provider-based strategy for ESG
data ensures that we benefit from a broad
spectrum of data inputs. SusIE processes,
computes and transforms data from
more than 10 third-party vendors into
standardised datasets using cloud data
storage. This includes automated checksof pre- and post-data processing to ensurehigh quality standards and data integrity
across the value chain.

SusIE is also the main portal to accessproprietary sustainability scores withtransparent and granular indicators.
In 2023, SusIE will also distribute in-houseresearch – thematic, sector and company
research – from our sustainability researchand stewardship analysts. External andinternal insights contribute to the real
integration of sustainability in our active
investment decisions.

41

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

02.3 Sustainability methodologies and analytics

Exclusions and regulatory analytics
under the spotlight
SusIE supports analysis andimplementation of EU taxonomy and EU
sustainable investment shares. Provided atcompany level, it allows our experts toselect the best companies from theirinvestment universe but also to consider
any breach of governance principles and/or harming risks.

Negative screening is commonly used
for ESG integration by clients and wehave designed a dedicated Exclusion
policy module to provide comprehensive
transparency for our investment experts
on companies that do not comply withinternational standards, international
regulations, clients’ guidelines and/or
AllianzGI sustainable convictions.

Principles

Looking ahead
Integrating non-financial factors
into investment decision making isincreasingly mainstream, but the choice
and types of data being integrated
is still evolving. ESG disclosures andcomplexity will only grow and the
addition of further information todisclose will result in an even morechallenging data system to reportand understand. Therefore, we willreinforce SusIE to shape the mostmeaningful solutions and, in doing so,demystify, inform and guide our clientson the most appropriate methodologies
and analytics for targeted outcomes.
A strong proprietary sustainability
data architecture is the cornerstone
in understanding and aligningnon-financial outcomes alongside
financial returns.

2

4

In 2023, the Sustainability
Methodologies and Analytics teamwill continue to develop SusIE with afocus on:• Embedding stewardship-related
data and outcomes into a new
Engagement module.
• Capabilities to break down a portfolio
based on different criteria through a
new Cockpit module.
• Increasing the number of data
providers for specific needs such as
biodiversity and impact.

100+

SusIE leverages a multi-provider approach offering access to

Screenshot of ESG Profile >Regulatory section at company level

Allianz Global Investors Sustainability and Stewardship Report 2022

sustainability analytics.

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01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

02.4 Climate-related risks and opportunities
Climate risks are a crucial consideration
when assessing potential investments.
Transition and physical climate factors
may pose a significant risk or opportunity
in the short, medium and long term
through the value of assets we manage
on behalf of our clients, the investment
products at the core of our business,and how we operate as a corporation.
• In the short term, policy and reputationalrisks of our investee companies are theleading climate-related risks that may
affect investments.
• In the medium term, market andtechnology risks associated with theclimate transition may develop more
substantially, while acute physical risks
may emerge more frequently.
• In the long term, chronic physical climate
risks could become more substantial.
When it comes to climate-related
opportunities, initiatives that enable andbenefit from the climate transition are
the leading opportunity that may affectinvestments in the short term. In themedium and long term, climate‑related
investment opportunities will arise
from competitive positioning andclimate innovation.

Integrating climate risks andopportunities in investment processes
Our Sustainable Investment team,
portfolio managers and analysts
continuously monitor and assess thescience, regulatory response andbusiness implications of climate change.
We examine the implications for individual
issuers and sectors and the ways inwhich climate change can be a driverof investment performance.
AllianzGI supports and implements therecommendations of the Task Force on
Climate-Related Financial Disclosures(TCFD), engaging with companies on
climate-related issues and encouraging
them to report on TCFD and Science
Based Targets (SBTs) to improve thequality of disclosures provided to ourinvestors to meet their climate ambitions
more precisely. Climate change-relevant
indicators are part of our principal
adverse impact assessment.
For more information on climaterelated risk management process,please read our 2022 TCFD report.
For investors to be able to make informed
decisions, companies must reportcomprehensively on how they are tackling
dominant global long-term trends such

Allianz Global Investors Sustainability and Stewardship Report 2022

05 Appendix

Principle

as climate change. The climate transition
will create investment opportunities andrisks across all sectors of the economy.
Our industry has a crucial role to playin addressing climate change risks andopportunities through investment decisions
and influencing investee companies andother institutions. We published our second
annual Task Force on Climate-related
Financial Disclosures (TCFD) report in 2022.
For more information see our Climate
Policy Framework and annual TCFD
report on our website.
Climate strategy
We enable our clients to reflect climate risks
and opportunities in their holdings. As amember of the Net Zero Asset Managers
initiative (NZAMi), we are shaping thepathway towards net zero greenhouse gas
emissions by 2050 in line with global efforts
to limit warming to 1.5°C.

4

A key belief in our philosophy
surrounding climate investments isthat public corporate disclosures on
climate are not yet in-depth enough to
inform simple rules-based strategies.
Market inefficiencies on climate risks andopportunities currently exist and active
research and corporate engagement arenecessary to comprehensively tackle thedominant long-term global trends.
 e are shaping the pathway towards
W
net zero greenhouse gas emissions by

2050
in line with global efforts to limit
warming to 1.5°C.

Next to mainstream strategies, we offer
climate thematic and impact-driven
opportunities such as green bonds andclimate transition equity and private
markets renewable energy investments.
These specialised assets can help to alignan asset owner’s portfolio with climatetransition targets.

43

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

02.4 Climate-related risks and opportunities

Climate-related metrics and targets
We want to be as transparent as possible
regarding our climate-related profile,including investment-related climate
metrics. We submitted our first NZAMi
interim targets at the beginning of 2022,
covering listed equity, corporate debt,
infrastructure equity and infrastructure
debt. These targets reflect those set by
Allianz in 2021 for its proprietary assets asa member of the UN-convened Net-Zero
Asset Owner Alliance (NZAOA).
See the Allianz Group Sustainability
Report 2022.
For AllianzGI, assets in-scope of thetargets represent 14%1 of overall assets
under management:

We will continue to increase the scope of
our assets and set intermediate targets forour third-party client assets. We will also
actively engage with institutional clientsand distributors to integrate net zero
objectives in their investments and into
our mutual funds. We aim to review ourtargets and progress annually.
We use a variety of indicators acrossdifferent lines of business to monitor,
assess and steer climate-related
aspects of the economy. Our measured
investment-related carbon footprints(Scopes 1 and 2) are based on the issuers’
carbon emission data from data providers.

Listed equity and corporate bonds –25% GHG reduction, Scopes 1 and 2,
by the end of 2024 (baseline year: 2019).
Infrastructure equity – 28% GHG
reduction, Scopes 1 and 2, by the endof 2025 (baseline year: 2020).
Infrastructure debt – Our target is to
grow the share of low-emitting and EU
taxonomy-eligible assets.

Principle

4

Listed equity assets
Indicator

Unit

Equities portfolio AuM
Total financed emissions
Total carbon intensity

EUR billion
million t CO2
t CO2 /EUR
million invested
t CO2 /EUR
million revenues%

Weighted average carbon intensity
Emissions data coverage of listed
equities AuM

2022

2021

2020

213.2612.10
57.40

326.4415.22
47.80

243.0912.10
50.50

129.70119.90130.80

99%

98%

99%

2022

2021

2020

184.2012.33
75.80

188.1913.72
77.90

168.2517.94
119.80158.60192.20201.70

88%

94%

89%

2022

2021

2020

5,133.03
10,107.70

5,185.95
10,017.69

4,756.27
6,468.07

Corporate bonds assets
Indicator

Unit

Corporate bonds portfolio AuM
Total financed emissions
Total carbon intensity

EUR million
million t CO2
t CO2 /EUR
million invested
t CO2 /EUR
million revenues%

Weighted average carbon intensity
Emissions data coverage of corporate
bonds AuM

Green assets
Indicator

Unit

Investments in renewable energy
Investments in green bonds

EUR million
EUR million

See our TCFD Report for the full methodology of how we calculate thefinanced emissions.

1 Previously stated at 12%, the share of committed assets has been recalculated based on total AuM
as of 31 December 2022 to take into account market effects on the asset base.

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01 Our sustainability approach

02 Sustainable investing

03 Active stewardship02.5 Sustainability risk management
We consider sustainability risks
in our investment processes
across all the assets we manage
globally. All our investment
strategies are ESG risk-assessedso that investment teams
can monitor ESG risks as partof the investment process,although they do not necessarily
actively incorporate ESG risks
and opportunities into theirinvestment decisions.
We apply portfolio and individual
security level analysis across all assets
to ensure transparency on ESG risks
and principal adverse impacts (PAIs).
Sustainability risk factors can materialise
along any of the three dimensions of ESG
investing. We consider sustainability risks
to be potential drivers of financial risk
factors in investments, such as market
price risk, credit risk, liquidity risk andoperational risk. We follow the EU SFDR
definition of sustainability factors andsustainability risks:

04 Corporate sustainability

05 Appendix

Principles

47• Sustainability factors: Environmental,social and employee matters, respect forhuman rights, anti-corruption and antibribery matters.
• Sustainability risks: Environmental,social or governance risk factors that,
if they occur, could cause an actual or apotential material negative impact on
the value of the investment.
In line with European regulation,
AllianzGI considers sustainability
risks and PAIs of prospective andactive investments.
• For publicly listed asset classes wehave implemented a dedicated tool
to systematically monitor and assesssustainability risks.
• For private markets asset classes, ESG
risks are considered throughout theinvestment process and ongoing asset
management activities. In many cases,
they are specifically screened alongsustainability risk guidelines, or using
minimum exclusion lists as defined byAllianz’s ESG Risk Framework.
Further detail is given in our
Sustainability Risk Management
Policy Statement and Principal
Adverse Impact Statement.

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02 Sustainable investing

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05 Appendix

02.6 Sustainable investing categories
Our product categories cater toclients’ sustainability objectives
and preferences and provide
transparency on the SFDR
characteristics of our products.
We provide investment solutions
with differing levels of sustainability
incorporation. To ensure transparency,
we categorise our strategies into
different types depending on clients’sustainability objectives:

Principles

4

7

AllianzGI’s product categories

Conventional

ESG risk-focused

Sustainability-focused

Impact-focused

Objectives
Financial returns and active
risk management

EUR 117bn

EUR 126bn

EUR 9bn

Objectives
Financial returns and material
E, S and G risk considerations

Objectives
Financial returns andsustainability objectives
and values

Objectives
Financial returns andmeasurable sustainableoutcomes

Qualifying approaches
SRI Best-in-class
Climate engagement withoutcome (this approach will be
decommissioned by September2023) KPI‑based approach

Qualifying approaches
Impact (Art. 9)
SDG-aligned FI/MA/private
markets (Art. 9)
SDG-aligned equity (Art. 8)

Qualifying approach
Integrated ESG

Classified as Article 6* only
Firm-wide Exclusions

Classified as Article 8*Classified as Article 8 or 9*

Sustainable Minimum Exclusions

ESG risk assessment: identification and consideration of sustainability risks and adverse impacts
Active stewardship: company engagement and proxy voting
Source: AllianzGI, as of December 2022. ESG: environmental, social and governance. SRI: sustainable and responsible investing. KPI: key performance indicator. FI: fixed income.
MA: multi asset. For illustrative purposes only. Exclusions apply to direct investments. Sustainable or impact investing private markets strategies apply the Allianz ESG Integration
Framework exclusions. AllianzGI supports the United Nations Sustainable Development Goals (SDGs). *According to EU SFDR regulation.

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01 Our sustainability approach

02 Sustainable investing

03 Active stewardship

02.6 Sustainable investing categories

Increasing transparency
of SFDR Article 8 funds
The Sustainable Finance Disclosure
Regulation (SFDR) is a fundamental
pillar of the EU Sustainable Financeagenda. Its objectives include bringing
transparency to the market for investment
products with sustainability-related claims,
enhancing the comparability of products,
enabling investors to better understandthe impact of their investment decisions,and channelling capital towards moresustainable companies and activities.
Notable elements of SFDR include
Articles 6, 8 and 9.
Article 8 is increasingly being used asa market proxy to classify products assustainable. In some instances, it is being
used as a label in the marketing anddistribution of funds, with implications
for investors’ investment choices.
With deviating perceptions amongasset managers and regulators as towhat triggers classification of Article 8,
AllianzGI has determined to go beyond
the minimum regulatory requirements for
our Article 8 classified product range in

04 Corporate sustainability

05 Appendix

Principle

7

our commitment to offering investors ahigh standard of sustainable investment
products. Investment strategies weclassify as Article 8 will always have
two binding elements: our sustainable
minimum exclusion policy and one of oursustainable investment approaches.
Each binding element is measurable
and reportable, providing transparency
and clarity to our clients. We believe thisapproach reduces the gap between whatsustainable products can achieve and the
expectations of clients.
The first binding element enforces
exclusion criteria related to weapons,coal, international norms and standards(including the UN Global Compact),
and tobacco.
The second binding element consists of
one of our qualifying approaches for oursustainability-focused or impact-focused
product categories.
See chart on page 48 on AllianzGI’s“Two binding elements” approach.

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02 Sustainable investing

03 Active stewardship04 Corporate sustainability

02.6 Sustainable investing categories

05 Appendix

Principle

7

We apply two binding elements to our sustainability-focused and impact-focused funds.

1st binding element

2nd binding element

Sustainable minimum exclusion list2

Sustainable investment approach
One of the following approaches

Sustainability-focused/Article 8
Weapons

Coal
Private markets sustainable

International
standards

TobaccoImpact-focused/Article 8
or Article 9
Private markets SDG-aligned(ie, blended finance)

SRI Best-in-class

Private markets impact

Climate Engagement with Outcome(to be decommissioned by September 2023)

Public markets impact(ie, green bond)Multi-asset blend

SDG-aligned

Two binding
elements ensure
credible sustainability
delivery, which we takeseriously in our role as asustainability shaper

Materiality of
our harmonised
approach is in line withregulatory objectives

Measurability andreportability for highlevel of transparency
and clarity

KPI: carbon reduction(further KPIs in development)

2 Private markets use the Allianz ESG Framework rather than AllianzGI’s sustainable minimum exclusions policy.
AllianzGI, as of September 2022. For illustrative purposes only. Exclusions apply to direct investments. SRI: sustainable and responsible investing.
KPI: key performance indicator. AllianzGI supports the United Nations Sustainable Development Goals (SDGs).

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02 Sustainable investing

03 Active stewardship04 Corporate sustainability

02.6 Sustainable investing categories

02.6.1 ESG risk-focused
Within our ESG risk-focused category,
we offer strategies that apply the
Integrated ESG investment approach.3
This approach integrates material ESG
risk considerations into mainstream
investment analysis, without constraining
the investment universe, and requires
the portfolio manager to provide arationale for holding companies that havebeen flagged for possible material E, S
and G risks.
The portfolio manager is free to either divest
or continue to hold “risky ESG” companies ina portfolio if the expected return justifies therisk. Active stewardship activities (dialogue
with investee companies and proxy voting)
may also be considered to mitigate risks.
Integrated ESG is seen as an enhanced
risk management approach that adds
another risk analysis dimension toexisting investment processes andcan be applied to any asset class.
Portfolio managers have access to anincreasing depth and breadth of ESG
risk perspectives for investee companies
through the new Sustainability Insights
Engine (SusIE) to identify and opine on

possible idiosyncratic risks. Looking ahead,
we continue to review enhanced
controversy tools for integrated ESG.
ESG in private markets
ESG is an increasing factor in all our clients’decisions. In private markets, this comeswith challenges as these markets tend to
be less transparent. Our focus in 2022 wason further enhancing our ESG practices
in this area. Private Markets Investments
teams have delivered ESG frameworks
which set out their approach to integrating
ESG and they continue to make use oftools provided by the Sustainability team,including sector frameworks. We also
supported industry initiatives to improve
ESG standards. For example, our Head of
Sustainable and Impact Investing Matt
Christensen became a board memberof the GRESB foundation, a missiondriven and industry-led organisation
providing standardised and validated
ESG data to private markets. The GRESBFoundation Board will guide the GRESBStandards to ensure they remain
investor-led and aligned with responsible
investment principles.

05 Appendix

Principles

Fund naming guidelines
In 2022, the European Securities andMarkets Authority (ESMA) issued asupervisory briefing and consultation
on guidelines on funds’ names using
sustainability-related terms. The aim
is to ensure that specific minimum
standards are adhered to whenusing terms such as “sustainable”
or “sustainability” in fund names,
and in particular that products
require a specific link to sustainable
investments. While we have taken
action to ensure our products
are in line with the supervisory
briefing, understanding of the terms“sustainable” or “sustainability” within
the market reflects that a broad rangeof funds exists with various degrees
of ambition level. Nevertheless,
we take into consideration therecommendations and continue toassess the evolution.

47

02.6.2 Sustainability-focused
Our sustainability-focused productoffering aims to achieve financial returns
for clients while following sustainability
objectives and values, and applying
sustainable minimum exclusion criteria.
Strategies within this category apply adual-layer approach: a set of sustainable
minimum exclusions plus one of thefollowing approaches:
Sustainable and Responsible Investing(SRI) Best-in-class
Our SRI Best-in-class approach extends
mainstream fundamental researchby analysing financially material andnon-material ESG factors. The portfolio
construction is geared towards a superior
ESG quality by applying sustainable
minimum exclusions (negative screening)and so-called best-in-class considerations(positive screening) on the investment
universe. These ESG screens guide security
selection towards companies with best-inclass or improving ESG quality comparedwith their peers, while excluding
companies linked to, for example,
coal, tobacco, weapons, and controversies
that may bring significant financial and/or
reputational risks.

3 ESG risk-focused category (integrated ESG investment approach) is not considered sustainable according to EU Sustainable Finance
Disclosure Regulation.

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02.6 Sustainable investing categories

The general philosophy and process ofapplying the SRI Best-in-class approach
are identical across listed asset classes
globally. The specific processes may differ
slightly depending on the asset class,resulting in different portfolio compositions.
Multi‑asset products, for example, can be
split into two categories: sustainableadvanced (where more than 70% of assets
need to be sustainable) and sustainable
complete (where more than 90% of assets
need to be sustainable).
Equity portfolios use AllianzGI’s
proprietary ESG ratings to identify
outperformers in each industry withregards to ESG performance. A tailored
process for certain fixed income products
assesses sovereign-bond issuers basedon a proprietary emerging-markets ESG
framework that screens out the bottom
10% of countries on the E, S and G pillars.

encouraging greater inclusivity in society.
We assess the ability of corporate issuers toorganise their internal structure to improverisk management. This includes evaluating
management or supervisory board
composition, board independence andremuneration transparency. We analyse
audit and control mechanisms to prevent
abuse and reduce risks under review.
Finally, we analyse shareholder rights andanti-takeover measures. For sovereignbond issuers, we evaluate systems used toprevent and fight corruption, the stabilityof political structures and government
capacity to introduce necessary reforms.

Our proprietary sustainability rating
methodology spans the different asset
classes and is based on four factors:

Environment: We assess issuers’ direct
and indirect environmental impacts,
risks, approach to environmental
responsibility and development ofenvironmental solutions. Our analysis
of sovereigns assesses measures taken
to address a comprehensive range ofenvironmental issues with a country’s
political and legal framework being key
elements of our assessment.

Corporate governance: Strong corporate
governance helps foster long-term
investment, financial stability and businessintegrity, supporting stronger growth andSocial: We review the extent of issuers’
workplace health and safety, dialogue with
employees and relationships with suppliers.
We consider general social policy when

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05 Appendix

Principle

assessing sovereigns with a focus on topics
such as healthcare, education, the role
played by women in civil society and theinfrastructure available to provide access tobasic needs.
Business behaviour: We assess therelationships between issuers and their
supply chains, customers and communities
along with the impact of their products
and services on society and respect formarket regulations and fair businesspractices. These criteria do not apply tosovereign-bond issuers.
KPI-based
Our KPI-based approach was rolled out
in Q4 2022 and targets measurable,monitored and reported KPIs to track ESG
results that are significant enough to drive
sustainability in the investment process ofa portfolio.
A potential advantage of the approachis the ability to quantify the sustainability
feature of a portfolio and regularly reportoutcomes. It allows us to choose between
two objectives. First, to outperforma reference investment universe or
benchmark or a defined threshold on atleast one environmental or social KPI.

7

And second, to achieve an ongoing yearon-year improvement against a chosenenvironmental or social KPI.
Our first KPI is GHG intensity. By actively
managing the GHG intensity of portfolios,
we aim to contribute to help shape
the pathway to a low emission future.
The GHG intensity KPI-based approachhelps us better understand a portfolio’s
carbon footprint status quo andfuture development.
Our goal is to continuously expand thelist of available KPIs and extend them toother products. In addition, the KPI-based
approach is to be applied to more products.
Looking ahead
We plan to further evolve oursustainability-focused productoffering over the course of 2023.
We will extend the newly introduced
KPI-based approach by implementing
additional sustainability-related key
performance indicators. In addition,
innovative climate-related concepts
across asset classes will be exploredto address our clients’ preferences totackle global climate change.

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01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

02.6 Sustainable investing categories

02.6.3 Impact-focused
Increasing numbers of investors nolonger see environmental sustainability
and social equality as an add-on totheir investment strategy as they movebeyond pure financial returns – andeven beyond ESG risk management –towards positive outcome-orientatedinvestment approaches.
We support investors who want to see
a positive change for the planet andsociety while generating a financial
return. Impact investing contributes tomaterial positive environmental and/or
social outcomes that can be measured
against specific goals and, in many cases,
against the United Nations Sustainable
Development Goals (SDGs).
Impact investing strategies
Our Impact-focused strategies enableclients to maximise their exposure
to positive environmental and social
outcomes by offering impact-focused
approaches across public and private
asset classes. These strategies are definedby three core beliefs:

Intention: The intention of a strategy andits investments is to generate incremental
positive social and/or environmental value
while delivering financial returns.
Association: There is a clear association
between each investment and the positive
output delivered.
Measurement and reporting:
The impact will be measured on a “besteffort basis” and reported in order tovalidate each strategy.
AllianzGI’s impact investments canbe accessed through private markets(eg, private equity impact fund of funds)
or public markets (eg, green bonds).
Impact investing also extends to ourblended finance approaches, where
capital from commercial investors
is combined with philanthropic andpublic sector funds to maximise impact,
especially in emerging markets wherecommercial investors benefit fromde‑risking. This approach can mobilise
large-scale private capital in developing
countries and contribute to closing theUnited Nation’s Sustainable Development
Goals financing gap in development
countries, which grew in 2022.

05 Appendix

Principle

Successive crises including Covid-19,
the war in Ukraine and the climate
emergency are exacerbating inequalities
between and within countries and stiflingprogress to achieve the Sustainable
Development Goals (SDGs) and the Paris
Agreement.4 Meeting the UN SDGs by thetarget year of 2030 will require substantial
investment from both the public andprivate markets.

The intention ofa strategy and its
investments is togenerate incremental
positive social and/or environmental
value while delivering
financial returns.

7

Looking ahead
Partnering with industry bodies
looking to create clear ESG standards
in private markets will remain anarea of focus in 2023. Convergence ofstandards will help increase theavailability of relevant ESG data that
informs investment decisions andongoing engagement with our private
market investments. One challenge
the market faces is the availabilityof data and transparency to fully
inform investors on ESG topics.
While improving, we aim to enhance
the transparency of our investments
which is becoming increasingly
necessary from a regulatory pointof view. We will continue to consider
how best to tackle this by engaging
with our assets and using technology
to collect and leverage information in
the investment process and report on
it to our clients.

4 https://www.oecd.org/finance/global-outlook-on-financing-for-sustainable-development-2023-fcbe6ce9-en.htm

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01 Our sustainability approach

02 Sustainable investing

03 Active stewardship

02.6 Sustainable investing categories

SDG-aligned strategies
SDG-aligned strategies often adopt athematic investment approach. We invest
in companies that exhibit a certain
level of contribution towards one ormore of the UN SDGs. Our assessment
is both quantitative and qualitative
and a quarterly report highlighting
SDG contributions on an individual
strategy level is available. The SDGs,
established by the UN General Assemblyin 2015, consist of 17 distinct goals
which serve as a global framework
and roadmap for action to achieve amore sustainable and equitable future.
For example, “food security” theme-based
investments address SDG 2 “Zero Hunger”.
Our approach applies a set of sustainable
minimum exclusions as well as the E,
S and G factors of investee companies
being analysed. In addition, principle
adverse impacts are analysed to avoid
companies with poor ESG practices andthose that cause significant harm.

04 Corporate sustainability

05 Appendix

Principle

7

Our SDG themes and the SDGs they support
Financial inclusion
eg: SME financing
Social inclusion
eg: social infrastructure
Educationeg: EdTech
Health (innovation and promotion)
eg: health accessFood security
eg: sustainable agriculture
Clean water
eg: water supply
Clean air/energy transitioneg: energy generation
Clean land/circular economy
eg: waste management

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02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

02.6 Sustainable investing categories

AllianzGI’s SDG-aligned funds follow
our thematic investment approach,which is built on a solid understandingof secular drivers and the ability toidentify companies with long-term
potential. We believe these companies
have greater growth potential, are more
resilient to macroeconomic and politicalvolatility and benefit from regulatory
tailwinds. Our SDG funds address a single
sustainable core theme or several themes.
Seeking out key enablers of the SDGs
We actively select companies based on
a combination of fundamental researchand the analysis of the contribution ofeach company to the SDGs, seeking out
what we believe to be the most promising
companies within a topic. SDG-aligned
investing directs capital towards
companies which we call “key enablers” –companies that are providing solutions to
the world’s greatest challenges.
Our SDG-aligned investment strategies
invest in companies that provide goods
or services that allow others to lower orminimise their footprint and therefore
have a multiplier effect. They not only
manage their own impacts but have apotentially much larger effect throughtheir impact on others.

Principle

SocialInclusion

Health(Innovation
andPromotion)

Financial
Inclusion

Education

Food
Security

Clean
Water

Clean
Land/
Circular
Economy7

Clean Air/
EnergyTransition

Single theme capabilities
Global water
Food security
Smart energy
Sustainable health
Main theme capabilities
Clean planet
Positive change

How a company’s handprint takes its
footprint one step further
A company’s footprint measures the impact
its activities have on the environment andsociety. Frequently measured footprint
categories include, for example, the carbon
footprint (the amount of carbon dioxide
emitted) or the water footprint (thefresh water consumed and/or polluted).
Traditional sustainable investment
strategies focus on the improvement
or minimisation of the footprint ofinvested companies.

Allianz Global Investors Sustainability and Stewardship Report 2022

SDG-aligned investment strategies go one
step further by investing in companies
that are key enablers of the SDGs.
These companies effectively enable others
to act, as they provide goods or services
that allow others to lower or minimise
their footprint. This impact is describedas its handprint. Key enablers have amultiplier effect through both managing
their own footprint and their handprint’s
impact on others.

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02.6 Sustainable investing categories

Principle

Impact-focused investing inpublic markets
Shaping sustainable pathways towards change

Halma plc
The Halma group of companies manufacture and market
health and safety sensor technologies designed to save lives
and provide science-based solutions to complex issues.
With products focused on making theworld safer, cleaner and healthier,many of Halma’s underlying
businesses’ objectives are alignedwith the SDGs, supporting public andpersonal health, water management,
hazard detection in buildings andindustrial work environments, products
such as medical optic devices, water
quality test kits, fire and smoke
detectors, elevator safety sensors,and more.

Halma’s water analysis andtreatment technologies deliver over
200 million water tests annually andmonitor over 110,000km of water
pipelines, increasing water safety,
conservation and efficiency. It has
also developed life-saving sensor
technology to analyse drinking water
for lead contamination in just threeminutes. The importance of this isbrought into sharp focus by a recent
UNICEF report which estimates that
one in three children, up to 800 million
globally, are reported to haveblood levels with unsafe amountsof lead present.

05 Appendix

Green bonds
Green bonds can support the pathway
to a more sustainable future bymobilising capital markets to deliverenvironmental benefits. On a worldwide
scale, green bonds have proven to
be a multifaceted model for success,attracting a growing number of investors
seeking sustainable, low-carbon
investment opportunities.
Our green bonds strategy follows asustainable investment objective toparticipate in the mobilisation of capitalto support the transition to a low-carbon
society, natural capital preservation andadaptation to climate change. This favours
the reallocation of investments through aless carbon-intensive economy.
As defined by the International CapitalMarkets Association5, green bonds are
any type of bond instrument where the7

proceeds will be exclusively applied tofinance or re-finance, in part or in full,
new and/or existing eligible green projects
and which are aligned with the four corecomponents of the Green Bond Principles:• Use of Proceeds (identification of“green” projects and assets).
• Evaluation and selection of eligible
green projects.
• Management of Proceeds (tracking,allocation and spending of proceeds).
• Reporting (what information to disclose,
as well as the frequency of disclosure toinvestors, including methodologies forCO₂ emissions calculation).
Our investment in green bonds unlocks
key enablers of energy and climatetransition. For example, AllianzGI invests
in companies that develop large offshore
wind farms, implement solutions to lower
the impact of carbon-intensive freightactivity or promote the circular economy
through recycling.

5 https://www.icmagroup.org/assets/documents/Regulatory/Green-Bonds/Green-Bonds-Principles-June-2018-270520.pdf

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02.6 Sustainable investing categories

Impact investing in private markets
Increased frequency of major
environmental events and social
movements has raised awareness that
capital can – and should – play a rolein addressing environmental and social
issues. As a field, impact investing has
grown steadily in the past decade withthe total market size now estimated atmore than USD 1.1 trillion according to the
Global Impact Investing Network (GIIN).6
Our Private Markets Impact teams aim todeliver tangible real-world impact throughdirect and indirect private equity and debt
investments and blended finance vehicles.

05 Appendix

Principle

7

Shaping sustainable pathways towards change

AllianzGI’s OECD markets-focused impact offering– the Allianz Impact Investment Fund (AIIF)
Following our impact
framework, the AIIF actively
pursues direct and indirect
investments that generate
positive environmental
and social outcomes and ameasurable contribution toat least one UN SDG.

• Inclusive capitalism – investment
in Karriere Tutor, a German digital
educational business.

The AIIF’s investments have madestrong progress on portfolio growthacross all three impact thematic
areas, as demonstrated by thefollowing examples:

In 2022, AIIF published its inaugural
Annual Impact Report covering
investments completed in 2021 toreport the impact performance of its
underlying portfolio.

• Climate change – investment inHydrostor, provider of long-durationenergy storage technology.
• Planetary boundaries – investment
in REBIKE, first large-scale European
e-bike refurbishment facility
and operations.

6 GIIN, 2022 Sizing the Impact Investing Market.

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05 Appendix

02.6 Sustainable investing categories

im

ui

le

ld

ar

m
g
n
i
o
an
ng
m
3. O
d
an

n in

in g

ga

e
ag a surem e m
ent
en
t

4. A
 pply continuous testing, learningand market-building to strengthen
our approach to impact generation.

2. As
ses
s im
integ
p
rat
e in ac
to
d

d
y an
alit
eri
king
at
-ma
t m isionec

3. I dentify core impact KPIs to measure
and report against, where possible,aligned with the UN SDGs andthe Global Impact Investing
Network’s IRIS+.

tives
jec
ob

ct
pa

us
uo
‑b
nti n rk e tma

We align our approach to managing andmeasuring impact with industry leading
principles and standards.

1. E stablish impact objectives that target
key societal challenges in line with the
UN SDGs.
2. A
 ssess the impact materiality andadditionality of potential investments
by applying our impact scoring
system, which is aligned with the fivedimensions of impact as defined by
the Impact Management Project.

7

Key elements of the AllianzGI impact framework

4 . CoThe AllianzGI impact framework facilitates
the due diligence and selection of
investments that contribute to material
and positive impact. This approach
supports rigorous measurement andmanagement of impact over the lifecycleof the investment to ensure impact may
be delivered.

Four main elements comprise the AllianzGI
impact framework:

1. E
sta
bli
sh

Measuring impact
As capital is increasingly allocated to
impact investing in private markets,measuring impact in a robust and credibleway is essential. Defined frameworks
for doing so can be built into theinvestment process.

PrinciplendAllianzGI impact scoring system• Enterprise impact• Investor contribution

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02.6 Sustainable investing categories

Increasing opportunity withblended finance
Blended finance is a technique used to
attract large-scale commercial capitalto emerging markets with a focus on
sectors that impact social and economic
growth such as infrastructure, energy
and agribusiness.
Blended finance generally includes a
combination of commercial (or private)
capital in a senior position anddevelopment (or public) capital in ajunior position. The goal is to achieve
an attractive risk-return profile forall stakeholders by blending public
and philanthropic capital together
with commercial capital into risktiered structures.
AllianzGI was one of the first large
asset managers to facilitate blended
finance and we have raised more than
USD 2.5 billion in commitments acrossfive blended finance vehicles since 2017.

05 Appendix

Principle

7

Blended finance approach: de-risking via blending
Senior investors Private capitalas anchor investor alongsideother institutional investors
Junior investors Public capitalFirst loss
protection

Local impact
by investingalongsidedevelopment
financeinstitutions insustainableprojects andcompanies.

USD 2.5bn
	We have raised more thanin commitments across five blended finance vehicles since 2017.

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05 Appendix

Principle

7

Shaping sustainable pathways towards change

Impact Investing teamThe Impact Investing team at AllianzGI provides equity financing
to generate positive environmental and social impact.
The team manages three fund-of-funds
strategies, two of which are emerging
market-focused blended finance vehicles
that bring together public investors to
de-risk the underlying investment universeand mobilise large scale institutional
capital to close the equity financing gap
in these markets.
We launched our latest vehicle – theEmerging Market Climate Action Fund
(EMCAF) – in late 2021 jointly with theEuropean Investment Bank (EIB). EMCAF isan innovative blended finance fund that
finances climate mitigation and adaptation
as well as environmental projects in Africa,
Asia, Latin America, and the Middle East.
In 2022, EMCAF closed its first transaction– a USD 15 million investment in ARCH
Cold Chain Solutions Fund (CCSF).

CCSF finances development andoperation of first-of-its-kind energy
efficient cold chain infrastructure in East
Africa. As climate change increases thefrequency of extreme weather events,
including drought and torrential rain,adequate cold storage facilities arevital to hold food reserves and extend
availability of agricultural produce to nonharvest seasons. Without this capability,
local communities are exposed to foodinsecurity associated with such weather
events. Cold chain infrastructure facilitatesa more resilient food supply stock andsupports climate adaptation for climatevulnerable communities. It also addresses
high rates of food losses and associated
GHG emissions in East Africa, with rotting
food a large source of methane emissions,a GHG 25 times more powerful than CO2.

Allianz Global Investors Sustainability and Stewardship Report 2022

This climate adaptation-focusedtransaction exemplifies EMCAF’s focus
on financing innovative solutions forclimate transition in the real asset space.
This strategy operates at the nexus ofclimate change – spanning mitigation
and adaptation, food security and healthwith strong positive impact expected for
agricultural producers, farmers and thebroader population.
The first pilot facility in Nairobi,
Kenya, should be operational in early2023 and other facilities are at various
stages of development throughout
the region.

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05 Appendix

Principle

7

Shaping sustainable pathways towards change

Debt financing in developing countries
The Development Finance team at AllianzGI focuses on private debt
investment opportunities that mobilise scalable commercial capitalin the direction of emerging markets to support the UN SDGs.
We have raised more than EUR 3.1 billion
across our Development Finance strategies,
including blended finance debt vehicles.
Strategies are created through partnerships
with public sector institutions that bring
together market knowledge, investment
expertise and different types of capital.
These partnerships result in investment
opportunities that aim to contribute to
reducing the SDG funding gap in the
countries that need capital the most.
For example, AllianzGI on behalf ofinvestors provided an East African
sovereign with financing to support
the rehabilitation and constructionof an approximately 90km-long roadconnecting several cities across thecountry. The road is part of the country’s
national efforts to improve essential
infrastructure. The financing includes acredit guarantee provided by a European
Export Credit Agency for the benefit of
the investors.
In addition to detailed credit analysis,
we evaluated a number of ESG issues
including a Human Rights Assessment,
an evaluation of expected GHG
emissions of the project as a result of theroad improvements, and the project’s
compliance with the IFC PerformanceStandards. An Environmental and Social
Action Plan (ESAP) was prepared to

Allianz Global Investors Sustainability and Stewardship Report 2022

capture any ESG-related items pending
completion. To ensure ongoing ESG
compliance, the borrower will provide
ongoing reporting on the ESAP progressand other ESG requirements during thelife of the facility.
The financing is expected to generate
positive outcomes including reduced
transportation time between cities,
improved road safety and increased
economic growth of the populations
along the road as a result of greater
trade within the country and with
its neighbouring sovereign.

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04 Corporate sustainability

05 Appendix

Principle

7

Looking ahead
We will continue to develop our private
markets impact strategies in 2023,
applying AllianzGI’s impact framework
to ensure positive contributions to socialand environmental outcomes.
We will provide tailor-made debt to
private sector companies in OECD
countries which are applying innovative
solutions to pressing societal challenges,
as well as investing in global private
equity and venture capital funds focusedon creating social and/or environmental
impact in OECD markets.
We will also continue to build on our
blended finance activities, focusing on
private debt and private equity fundinvestments in emerging markets
that support the achievement of the
UN SDGs. This will include capital
deployment from existing strategies(eg, Emerging Market Climate Action
Fund, a blended equity strategy) andthe launch of additional strategies(eg, Allianz Climate Solutions Emerging
Markets, a blended debt strategy).
For our listed market strategies, we plan
to add further use-of-proceeds bondstrategies to our impact-focused
product suite. A social bond strategy
will complement our offering and allow
our clients to participate in this growing
fixed income segment.

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05 Appendix

03
Active stewardship

Guidingsustainable
investments
We shape sustainable pathways by engaging withinvestee companies to deliver real-world change
across our three guiding themes of climate change,planetary boundaries and inclusive capitalism.
As an active investment manager, constructive engagement
dialogue with investee companies is essential for creating
sustainable pathways towards change. Our global
stewardship approach guides how we engage with investee
companies and exercise our rights as owners.

Principle

7

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02 Sustainable investing

03 Active stewardship04 Corporate sustainability

03.1 Developing our engagement strategy
We are pursuing an engagement approach with an activist
sustainability orientation as part of our ambition to be asustainability shaper. We evolved our approach in 2022, focusing
on thematic and collaborative engagement as well as engagement
across all listed asset classes. We also maintained our risk-based
approach to engagement for large holdings.
Thematic engagement: In 2022,
we continued to refine our thematic
engagement approach aligned to ourthree sustainability themes – climatechange, planetary boundaries andinclusive capitalism – in addition to
governance themes within specificmarkets and more broadly. We prioritise
engagement projects based on the sizeof our holdings per market or portfolio
and the priorities of clients or certain
funds. The many direct conversations withour clients provide us with insights into
their engagement priorities and thematic
focus areas which extends particularly
to climate, biodiversity and human rights
issues. Reflecting increased client interestin the transition to net zero as well as
regulatory commitments, we targeted
additional high-emitting sectors to expand
our climate engagement programme in2022. We maintained our engagementon the net zero transition of the fossil fuelsector as we consider this a high priority,

not only to inform our “Say on Climate”
votes. Regulatory requirements extend tothemes such as biodiversity and humanrights. As these issues are a high priority
for us, not least in our sustainable funds,
we have also launched thematic projects
for these topics in 2022 and will continue
our work in 2023.
Collaborative engagement: To scale ourengagement and be more effective in the
major markets we have holdings, in 2022,
we laid the legal foundations for broader
collaborative engagement. We arepartnering with high-profile initiatives,
focusing our efforts on climate transition,
diversity and select governance topics.
See section 03.5.
Engagement across all listed asset
classes: While the bedrock of ourengagement activities comes from ourheritage as an active equity manager, we
are also now anchoring our engagement

Allianz Global Investors Sustainability and Stewardship Report 2022

05 Appendix

Principles

792022 highlights

438

active engagements

No. of engagements
increased by

46% year-on-year
Engaged in

28 markets
globally

Voted at10,200shareholder meetings

Voted against
43% of remuneration
proposals62

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

03.1 Developing our engagement strategy

Principles

more specifically in fixed income andfacilitating dedicated dialogues for our
corporate credit strategies. Our strategy
includes enhancing the engagementspecific skills of our investment
professionals through dedicated training.
See section 03.2.1.
We seek to reinforce our engagement
approach externally through public
speaking and policy engagement, forexample relating to the legal framework
for collaborative engagement andpublishing our convictions via thought
leadership pieces.
See sections 03.4 and 03.5.
Our risk-based approach remains thebasis of our engagement strategy andfocuses on the material ESG risks that
we identify. Targeting is closely related
to the size of our exposure, whether per
market or fund or considering thetotal value of investment. The focusof engagements is determined byconsiderations such as significant votes
against company management at past
general meetings and sustainability
issues that we identify as below market
practice. Engagements can also be
triggered by controversies connected to

Allianz Global Investors Sustainability and Stewardship Report 2022

05 Appendix

7

9

sustainability or governance. Our activities
typically relate to an investee company’s
strategy, operational or financial
performance, capital management,
corporate governance and ESG risks
and impacts.
This approach allows us to strike a goodbalance between ESG risk reduction in
our portfolios and leading clients andcompanies on an inclusive sustainable
pathway to change. It also allows us toset clear engagement objectives from theoutset. While our preference is to engage
investee companies confidentially, we areprepared to escalate to engage publicly
if we conclude that the confidential
approach has gone as far as it can without
delivering progress and our objective
would be best served by escalation.
See section 03.6.

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03.2 How we engage
We apply a broad range oftools to our engagements,
including one-to-one
or group meetings withchairpersons, board members,senior management, company
secretaries and heads of specificfunctions, as well as writtencorrespondence.
We differentiate between normal research
and monitoring meetings as an active
manager and engagements where
we actively seek to make an impact ortarget a specific outcome. The latter
are, by default, classified and reported
as engagement meetings. Our overall
stewardship is much broader than isreflected by the numbers reported
as we also actively engage throughindustry bodies and by conveying ourstewardship stance to larger audiences atindustry events.
In 2022, we added data clarification
requests to our interaction with companies
in line with regulatory requirements.
These comprised conversations onsustainable investment share andPrinciples

principle adverse impact / Do No
Significant Harm in the context of the EU
sustainability regulation. In some cases,
these interactions were the starting
point for a more thorough engagement
process. However, we do not classify themas such and report them separately tounderline our conservative approach toengagement reporting.
Through our Climate Engagementwith Outcome (CEWO) programme1
we systematically reach out to target
companies in writing to discuss the scopeand progress of their climate strategy.
This programme is intended to achieve
an ongoing evaluation of progress made.
In many cases (see figures on page 69)
these letters were followed up by
engagement conversations.
While our stewardship professionals
often lead engagements, the membersof the Sustainability Research andthe Stewardship teams frequently
discuss material sector-specific issues,thematic focus topics and analyticalframeworks, eg, to evaluate climate votes.
This collaboration is the basis to forma joint view on a company and define
engagement objectives. High-quality

research thus provides the backgroundfor effective stewardship. We frequently
include relevant AllianzGI Investment
team members alongside members of the
Sustainability Research and Stewardship

2

7

9

team to make engagement meetings as
impactful and productive as possible bycombining insights from all critical parts of
our investment platform.

Resourcing our Stewardship Activities: Collaboration on company engagements
Engagement Proposal
Initiated by Research or Stewardship Analyst or Portfolio Manager

Form aview

Research
AnalystStewardship
AnalystDiscuss

Portfolio
Manager

Align

Research

Investment
Decision
Proxy
VotingEngagement

OutcomeInforms

Informs

1 AllianzGI plans to decommission its Climate Engagement with Outcome Programme going forward.
See footnote on page 15 for further details.

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03.2 How we engage

Principles

Our investment views are influenced
by the outcomes of engagements andoutcomes are linked to the proxy voting
process, forming a consistent stewardshipapproach. All engagement results areshared via our collaborative research andinvestment platform and can be accessedby our teams globally.

Having identified the need for training
for Investment teams, the Stewardshipteam developed a bespoke curriculumand delivered sessions to all Fixed Income
Investment teams. Eight engagement
training sessions were held in 2022,
reaching just over 90% of our Fixed Income
investment professionals globally.

Our engagement approach differs acrossdifferent funds, assets and geographies.

In addition to internal collaboration,
we have continued to work with externalorganisations such as the European
Leveraged Finance Association where weare members of the ESG Committee andfrom 2023 have board representation.
In 2022 we helped facilitate discussions
with stakeholders around ESG
engagement in high yield/leveragedloans; and we seek to improve market
practice around collaboration among
investors in these asset classes.

03.2.1 Fixed income engagement
Engagement activities apply to all publicmarket activities, comprising equity
and fixed income strategies globally.
In 2022, we enhanced the coordination ofengagement activities in fixed income byadding regular dedicated dialogues forour corporate credit strategies.
The process is overseen by a working
group on fixed income engagement,
including our Global CIO Fixed Income.
The benefits of setting up the working
group are already being realised.
In several cases, we combined theexpertise of the Stewardship, Equity and
Fixed Income teams in joint engagement
meetings and shared the outcomes via ourcollaborative investment platform.

05 Appendix

The constraints on further developmentof fixed income engagement aremarket broad. To shape the requiredchange, we joined the IIGCC
Bondholder Stewardship Working Group.
Members work together to improve
bondholder stewardship practices
to encourage high-emitting issuers
to develop credible transition plans,Allianz Global Investors Sustainability and Stewardship Report 2022

accelerate transition activities, provide
appropriate climate-related disclosureand adequately respond to climatechange risks.
As an outcome of our work in 2022,
we have established a more robust
and consistent process and approachto engagements in fixed income. At thesame time, we remain mindful that amore nuanced approach to embedding
sustainability in stewardship processes
within fixed income should exist, forexample dependent on time horizons,
the nature of the underlying instrument,
strategy or turnover and portfolio size.
Looking ahead
Enabling our investment professionals
to conduct engagements is a highpriority for us. In 2023, we willcontinue to offer stewardshiprelated training to our investment
professionals across public andprivate markets. In the first quarter,
we held engagement training
sessions for our Equity investment
professionals and offered dedicatedsessions for fund managers in Asia
and Europe.

2

7

9

03.2.2 Emerging market sovereigns
Engagement with emerging market(EM) sovereigns is part and parcel of ourinvestment process. The Fixed Income
team follows a specific engagement
approach that rests on integrated risk
factor modelling to assess non-financial
risks that may impair a country’s ability to
repay its debt.
Our EM Fixed Income (EMFI) investment
process fully integrates ESG considerations
which are set by the EM ESG sovereign
framework. This framework uses twenty
publicly available indicators spanning E,
S and G supplied by international institutions
and think tanks to quantitatively assess
EM Sovereigns, supported by our own
qualitative analysis. The EM ESG framework
is maintained and regularly updated
publicly and shared on our website.
The EMFI team regularly runs meetings
with sovereign issuers to discuss ESG
topics. This allows us to understand what
may support or hinder the potential
attainment of ESG outcomes in a certain
sovereign. The framework enables us
to engage in more tailored and deeper
discussions with the EM sovereigns weinvest in. Focusing discussions on reliable65

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05 Appendix

03.2 How we engage

public data from reputable institutions –rather than arbitrarily assigned numericalscores – supports meaningful andobjective engagement discussions andminimises potential impacts of political
economy sensitivities, data challenges anddifferent political cycles. It also provides
the opportunity to raise important ESG
issues that our clients care about andto clarify the set of standards that we
consider essential for investing in acertain issuer in our sustainability-focused
portfolios. Finally, engagement helps us
to gain insight into the mechanics andincentives systems at play in specificsovereign policy areas.

Principles

We believe EM sovereign engagement
must adopt a long-term approach.
Raising issues and monitoring changeor, at a minimum, establishing a rapport
over ESG issues with sovereigns supports
the fiduciary duty to our clients and helps
to increase the ESG outcomes achieved.
For example, in the area of fiscal anddebt transparency, our engagement takes
place over repeated interactions and often
over a lengthy period to deliver results.
In 2022, we conducted over 30 official
engagement meetings or touch points
with EM sovereign delegations over
specific ESG topics. These included
country visits to Azerbaijan, Costa Rica,
Dominican Republic, El Salvador, Ghana,Kazakhstan, Kenya, Panama, Uruguay
and Uzbekistan. They also included
London-based roadshows and virtual
meetings with finance ministries, debt
management offices and central banks
as well as national planning ministries,
state‑owned enterprises and donors.

7

9

Shaping sustainable pathways towards change

Uzbekistan: improving governanceOur proprietary sovereign ESG framework scores Uzbekistan at
4.5 out of a maximum of 10.2
The governance score (2.3) weighson the overall rating, while theenvironment (6.7) and social (6.6)
scores are above average. In October
2022, our lead sovereign analyst on
Uzbekistan met with representatives
from the Central Bank, the Ministry of
Finance, local corporates/banks andthe World Bank. Discussions focusedon the very low Worldwide GovernanceIndictor score from the World Bankand the Corruption Perception Index
from Transparency International.
Discussions highlighted that Uzbekistan
is making significant progress. It has
undertaken several key judicial reforms
and established a Supreme Judicial
Council and anti-corruption agency.
There is a planned asset and income
declaration scheme for public officialsthat will help to detect corrupt practices.
A new public procurement law is being
adopted with an online platform for
public procurement. This will increasetransparency, including of beneficial
ownership of contracting companies,
and reduce opportunities for corruption.
The Listening to the Citizens of
Uzbekistan (L2CU) initiative was also
highlighted. This system is designed tocapture the views and wellbeing of arepresentative group of people as thecountry embarks on its ambitious reform
initiatives. Finally, there were discussions
around the issuance of green and
SDG bonds, which Uzbekistan is
keen to develop and is working withadvisors on a framework which meets
international norms.

2 Rating as of January 2023.

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04 Corporate sustainability

05 Appendix

Principles

7

9

Shaping sustainable pathways towards change

Uruguay: sustainability-linked
bond issuance
Following our engagement with Uruguay’s Debt Management
Office, its first labelled bond was launched in October 2022.
The country partnered with theInter-American Development Bank
to prepare the framework to issue
a sustainability-linked bond (SLB).
The structure has a coupon stepdown mechanism3 that is activatedif Uruguay reaches environmental
targets set in line with its Naturally
Determined Contribution (NDC) to theParis Agreement. Uruguay worked
alongside the Emerging Markets
Investors Alliance (EMIA) to ensure
the SLB is consistent with the

EMIA Enhanced Labelled Bond
Principles. These introduce significant
improvements over prevailing bondstandards and encourage an elevatedlevel of transparency and more
stringent terms and conditions.
The USD 1.5 billion 12-year issue wasmore than two times oversubscribed
and was placed with investors acrossgeographies, capturing high appetite
for sovereign debt issues with asustainability focus.

3 Coupon step-down: a debt instrument with a high coupon in earlier payment periods and a lower
coupon in later payment periods.

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03.2 How we engage

03.2.3 Selecting and engaging withfund managers
In the context of engagement and fundof-funds approaches, the research andselection of fund managers is a major
focus of our multi-asset department. In thelast two decades, we have developed andenhanced our fund research capabilities
to independently and systematicallyselect the most promising managers
in the relevant liquid asset classes.
We diligently follow a stringent process
for every strategy and collate findings ina central shared database, called MARS.4
The process is the same for every manager
that we analyse.
Ongoing dialogue with clientsshows that demand for sustainablestrategies has been rising for years.
We continuously enhance our researchand selection process to adapt tochanges in the regulatory environment
and fulfil the requirements of our clients.
As part of this, we undertake a deepand comprehensive due diligence thatencompasses fund manager interviews
and an exhaustive questionnaire (RFP).
Important considerations such as
investment philosophy, team and research

05 Appendix

Principles

capabilities, portfolio construction,and sustainability efforts are evaluatedand compared to competitive strategies.
Assessing sustainability capabilities andprocesses is a crucial and integral part ofthe manager selection process. We havedeveloped an in-house ESG ratingprocess to assess this in a systematic way.
When analysing an ESG/sustainability
strategy, we look at the engagement
approach including proxy voting,engagement reporting and transparency.
While we are not allowed to enforce
our own engagement guidelines oralter the investment process of target
fund managers, who are responsible formanaging retail money, we do ask fordetails on proxy voting, engagement
process and portfolio composition.
Our detailed questionnaire looks atwhether there is a proxy voting policy
in place and its guidelines, if proxyvoting is done internally or delegatedto an external provider, and how theengagement process works. We go into
detail on prior examples of engagement
and their outcomes during personal
meetings with managers.

7

8

9

For exchange traded fund (ETF)
strategies, we meet with providers on aquarterly basis and discuss the provider’ssustainable products and policies. This canbe done by offering input on the evolutionof sustainable screens and KPIs andproviding advice on which markets arewell served by sustainable products andwhich need further product development/
launches. We also ask how providers deal
with regulations (particularly disclosure),encouraging transparency so that we are
fully equipped to make decisions andanswer queries from our clients.
The funds we recommend for investment
are regularly screened for compliance with
our standards, including sustainability
aspects. We continue to improve andenhance this process by updating ourquestionnaire at least annually – orwhenever there are significant changes,
such as changes in the regulatoryenvironment – and incorporating new
regulatory changes to offer our clients ourmost promising sustainable strategies.

4 Manager Research And Selection.

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03.3 AllianzGI’s engagement in numbers
In 2022, we engaged with companies on 438 occasions, mostly via
virtual engagement meetings (2021: 299). The substantial increaseof almost 50% from last year reflects – among others – the expansionof engagement activities in Asia – particularly in China, Hong Kongand Japan.
See case studies on pages 77–78.
Engagements covered 996 topics(2021: 482). We often engaged on
more than one topic per company andthe significant year-on-year increase isdriven by our new engagement reporting
template which enables more granular
reporting of sub-topics.
We reached out to a total of 276
companies under our Climate
Engagement with Outcome (CEWO)
approach since inception in the middleof 2021. We engaged with 84% ofcompanies (accounting for 88% of thesecompanies’ aggregate emissions) tocollect information on climate strategy,
governance and the full scope of thedecarbonisation pathway.

Principles

7

9

355
We engaged withcompanies in 2022.

In 2022, we completed 88 climate
engagements. Most of these wereachieved through answers to very
specific questionnaires for eachcompany and we completed 25 specificengagement meetings to collect further
information. These are included in our
engagement statistics.
To implement European regulation forsustainable fund categories, we reviewed
the sustainable investment share of certain
funds5 and analysed principal adverse
impact (PAI) indicators. Where data wasambiguous or incomplete, we engaged
37 companies for additional information(17 for sustainable investment share and20 for PAIs). In 27 cases, this resulted in an
amendment of the indicators used in theinvestment process.

Substantial expansion of our stewardship activities in 2022
299

Engagements

438
238

Companies engaged

Stewardship outcomes

355
28
38

Company dialogue
on SI share/PAI6

37

EM sovereigns
engagement7

30

2021
2022

5 Sustainable investment share: the percentage of a fund that can be considered as sustainable according to the EU Sustainable Finance Disclosure Regulations.
6 Engagements began in 2022 per regulatory requirements.
7 Not reported in 2021.

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03.3 AllianzGI’s engagement in numbers

Engagement by geography
The location of engagements reflect themain markets we invest in and the sizeof individual holdings in those markets– both assets under management andrelative share of the holding. As such,
we target issuers globally with a focus
on Europe, the US and our major markets
in Asia.
In Europe we engaged most frequently
with companies in Germany, France andthe UK, whereas in Asia our engagement
focus was on China, Hong Kongand Japan.
Our engagements in 2022 spanned
355 companies in 28 markets globally(2021: 238 companies in 27 markets).

Engagement by topic
Engagement activities in 2022 covered abroad range of topics (see chart). In 35%
of cases, we spoke to companies on
corporate governance, business conduct
and transparency issues. The reduction
compared with 2021 was driven by
our re‑focus of engagement on our
three guiding themes (climate change,planetary boundaries, and inclusive
capitalism). The increased focus onenvironmental and social topics resulted
in the share of engagements, touching oneither topic, increasing from 42% in 2021
to 69% in 2022. Where we did not see
sufficient progress, or wanted to follow
up on recent developments, we engaged
more than once. This occurred with 19% ofcompanies engaged and was broadly inline with 2021.
Outcomes achieved
We registered 38 stewardship outcomes
where companies took steps we had
explicitly referenced during engagements(2021: 28). Some cases involved multi-year
engagement. Executive remuneration andgovernance issues were the focus in about
three quarters of these cases.

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Principles

Engagements per industry
%

6

5 2

6

6

6
15
11
12

9

Engagements per topic
%

18

7

7

13

Industrials
Materials
Financials
Technology
Consumer Discretionary
Consumer Staples
EnergyHealthTelecoms
Utilities
Real Estate

4

4 3

2
28

12

17

25

Corporate governance
Environmental risks/impacts
Social risks/impacts
Strategy/business modelTransparency and disclosure
Capital management
Other
Risk management
Business conduct and culture

Percentages do not total 100 due to rounding.

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03.3 AllianzGI’s engagement in numbers

Principles

Corporate governanceUS
14%

Americas other1%

Germany
11%

1%Asia Pacific other
4%
Europe other
11%

237

Environmental risks/impacts
Other

Japan
11%

9

Number of companies engaged, by topic

Engagements per geography
AllianzGI engaged 355 companies across 28 markets globally in 2022.

France10%7China and Hong Kong
15%

217

Social risks/impacts

158

Strategy/business modelTransparency and disclosure

105
2

59

Capital management

42

Other

35

Risk management

24

Business conduct and culture

18

UK
15%

Netherlands

1%

Switzerland
4%

Allianz Global Investors Sustainability and Stewardship Report 2022

Italy
1%

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03.4 Engagement outcomesPrinciples

In the following pages, we discuss engagement and related
outcomes under the three strategic sustainability themesof climate change, planetary boundaries and inclusive
capitalism – along with governance.
03.4.1 Engagement
topic: Climate change
In 2022, we had 217
direct conversations withcompanies about climate change.
We approached many companies tochallenge their climate transition targets
and pathways and understand how
they intend to amend their businessmodel and employ new technologies toprogress to net zero. Many discussions
also focused on climate risk assessments
and how companies are reflecting climate
risk in their strategies, operations andproduct pipelines. Our engagement
focus reflects the increasing importanceclients place on decarbonisation targetsof portfolio companies. Climate and otherenvironmental issues continued to gain
relative importance in our engagement
activities, increasing their share by three
percentage points to account for 25% of
all engagements in the past year.

Engaging oil and gas companies
on the energy transition
Our increasingly thematic and focused
approach to engagement targets
organisations where the implications aremost significant, such as oil companies.
We continued our engagement with oil
and gas majors and spoke with energy
companies on 26 occasions.

217
In 2022, we had

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9Shaping sustainable pathways towards change

Engaging on an oil spill incident
We have engaged one company
on its energy transition strategy,
climate targets and a morecomprehensive range of governance,
community and social due diligence
topics for several years. We scrutinised
GHG emissions reduction targets,
capital allocation to low-carbon
technologies and climate lobbying
policy. We also questioned challenges
faced with respect to commitment to ajust energy transition.

The most recent engagement focusedon an oil spill incident. Due to the natureof the incident, we were concernedwith the response of the company andquestioned its sensitivity in dealing
with ecological and social impacts.
We challenged them on how they
tried to mitigate the effects of the spillon the environment and its impact on
local communities who make a livingfrom the sea and surrounding beaches.
We were pleased to see prompt action
and continue to monitor progress andfinancial implications closely.

direct conversations withcompanies about climate change.

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03.4 Engagement outcomesEngaging with banks on climate
Indirect emissions via financial
support of business activities means
banks are highly exposed to climate
risks. Systemic considerations add
further motivation to select this as anengagement theme. We prioritised
systemically important banks forengagement in 2022 because of
their critical importance to economic
stability first, and second as they playa leveraged role in transitioning the
economy through their financing activity
across the entire spectrum of businesssectors. The Sustainability Researchteam developed a framework to assessclimate performance and identify
gaps in commitments and governance,
strategic drive and disclosure quality.
This was done by focusing on 15 KPIs
across commitment and policy, targets,
strategy and reporting. The resulting
gap analysis was used as the basis forengagement calls, which informed voting
decisions for shareholder resolutions filed
at some US banks and say on climate
in the UK. We will broaden the theme
to consider climate risks beyond proxyvoting implications in 2023. We support
the increased prudential focus on climate
risks, including those most recently put

05 Appendix

Principles

forward by the US Federal Reserve,
and will use engagement to assess andencourage balanced decarbonisationof books, namely the monitoring andmanagement of business risks throughthe climate transition.
Understanding the role of sustainableaviation fuel for airlines
Airlines’ use of sustainable aviation fuel (SAF)
is a key solution to decarbonise aviation GHG
emissions. Despite the advantage for climate,
SAF faces sustainability challenges linked
to biodiversity (eg, sustainable sourcingof biomass-based oils) and food security.
In 2022, we engaged with several airlines
for our fixed income holdings with SAF
being a main topic in our dialogues.
While airlines’ use of SAF varies, itremains a significant focal point for
the industry. Common SAFs used are
produced from waste fats or vegetableoil. Food security and logistics (for waste
collection) are the main obstacles for
scaling up. Some airlines invest in Airto-fuel SAF (converting CO2 via carbon
capture and green H2 via electrolysis intohydrocarbons). This is more sustainable
but technically challenging at the current

Allianz Global Investors Sustainability and Stewardship Report 2022

time. While it is encouraging to see airlines
addressing climate challenges, we would
like to see them address other issues
associated with these solutions such as
biodiversity impacts associated with thebiomass input for SAF. This will remain a
key focus when we engage with airlines
and air transportation companies in the
coming year.

03.4.2 Engagement topic:
Planetary boundaries
Economic activities dependon the availability ofnatural capital and we need to act within
planetary boundaries to preserve vital
finite resources. Biodiversity is crucial tomaintaining safe planetary boundaries
through vital ecosystems and also helps
mitigate the impacts of climate change.
In 2022, after four years of negotiation,
196 countries adopted the Post-2020
Global Biodiversity Framework. It setsout a plan of action to halt and reverse
nature loss by 2030 and aims to ensure
that, by 2050, the shared vision of “living
in harmony with nature” is fulfilled.

79Corporate action must play a keyrole in achieving recovery by 2050.
Our engagement sought to understandwhether and how companies are taking
action to operate within planetary
boundaries and protect and enhancebiodiversity. Engagement was strongly
driven by our sustainable strategies seeking
to foster positive progress within relevant
themes, such as deforestation or pollution.
Biodiversity was discussed as a topic in 36
engagements with investee companies
in 2022. Most companies have started towork on addressing biodiversity impacts
by, for example, setting up biodiversity
policies and working with the Taskforce
on Nature-related Financial Disclosures(TNFD). For those that have not yet
started, we raised awareness of this topic.
Overall, we sensed that this is a relatively
new engagement topic for companies,
and it requires more consistent reporting.
We began a series of pilot in-depth
thematic engagements on biodiversity
with five companies in sectors with highbiodiversity impact and dependency,such as paper and forest products,
construction, and chemicals.

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03.4 Engagement outcomes

Our engagements sought to explore
how companies assess the materialityof biodiversity and where they stand interms of integrating it. We encouraged
companies to act on reducing theirbiodiversity impact and will use theoutcomes of discussions to shape our
biodiversity engagement approachgoing forward.

Principles

Increasing transparency onplastic pollution
Microplastic pollution poses a severe
threat to marine biodiversity and has
negative environmental and social impacts.
Pre‑production pellets (nurdles), which form
the building blocks of all plastic products,
are the second largest source of primary
microplastic emissions to the environment.

Shaping sustainable pathways towards change

Engaging a forest-product company
on their biodiversity impact
We engaged with a paper and forestproduct company to understandwhether its biodiversity target andstrategy are sufficiently ambitious andcomprehensive. From the engagement,
we understand that biodiversity is
considered a key material topic in thecompany’s sustainability strategy.
The company has a comprehensive
strategy in place to manage its impact
on biodiversity, which it considers
across the value chain. While the05 Appendix

company remained conservativein reporting progress and setting
targets, it is committed to doing more
once it is more comfortable withbiodiversity measures and progress.
We encouraged the company todemonstrate how biodiversity could
help to achieve its climate goal as
the topics are closely interlinked– especially for forest-based
business models.

Allianz Global Investors Sustainability and Stewardship Report 2022

Through the UK-based Investor Forum in
2018, AllianzGI supported a project whichsought to develop standards for companies
to handle plastic pellets within their supply
chains. We co-sponsored the creation of
PAS 510 2021, a document that builds onthe groundwork laid by Operation Clean
Sweep® to create a standardised andconsistent approach to risk management
and containment of pellets. This document
is a key component of a formal certification.
In 2022, we fulfilled our commitment
to engage with companies around theissue and to encourage the adoption of
the PAS. We held discussions with key
producers of plastic resins with a focus on
European companies. Our first aim wasto develop a baseline understanding of
how relevant this issue was to the business
and what actions were taken to mitigate
potential risks. In future, we plan to engage
with the value chain, including logistics/
transportation providers and end users.

03.4.3 Engagement topic:
Inclusive capitalism
We are convinced that
inclusion will become thenext big topic of public focus in addition
to climate change. The many inequalities
that exist and overlap globally are
the centre piece of this theme and79require close attention by investors.
Tackling climate change raises newchallenges when it comes to managing
a just transition. Within the inclusive
capitalism theme, human rights andlabour rights as well as diversity were
focal points of our engagement in 2022.
We expect companies to adhere to
relevant frameworks including the UN
Guiding Principles on Business and Human
Rights. Companies have a responsibility
to protect human rights within their own
operations (workforce) and at upstream(suppliers) and downstream (clients)
levels. This is especially important incountries where human rights standards
are lower and where there are greaterrisks of on-the-ground controversies.
In 2022, we continued to engage withcompanies on controversies, for example
related to human rights and labour
rights, to seek more information,
understand remedial actions and push forchange. This engagement often related
to names held in our sustainable funds toconfirm whether certain companies were
investable or not.

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03.4 Engagement outcomesPrinciples

Shaping sustainable pathways towards change

Investigating a human rights
controversy with a heavymachinery producer
We engaged with a heavy machinery
producer to understand how a severe
human rights controversy – which
triggered a temporary exclusion forinvestments in our SRI funds – resulted
in a specific approach of human rights
risk mitigation in sales, and whether
this was stringent enough to address
the risk of repeated occurrence in othercountries where the company has
sales relationships.

Countries are assessed for risk according
to the ranking of a data provider andthis serves as an input for the business todecide the level of due diligence to apply.
For higher-risk customers, they follow amore thorough, centralised approach.
We made recommendations to further
strengthen the approach. We appreciate
how the company has improved andwill continue to monitor whether it
has integrated our suggestions into its
policies and processes.

Since the controversy occurred, thecompany has developed a robust
approach centred around its humanrights policy. As a decentralised business,each business area is responsible fordriving the responsible sales approachwith the support of centralised experts.

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9Shaping sustainable pathways towards change

Engaging on labour rights issues
We engaged an outsourcing company
over concerns with respect to labour
practices in its content moderation
business. We investigated allegationsof union busting and asked forclarification on the way employees
were trained and equipped to performtheir job, which could result in adverse
health issues. We raised our severe
concerns that the company is not
managing the issues arising in this partof the business properly.
With respect to allegations of unionbusting, the company denied themand stated that they were in discussion
with the trade union dedicated for theirindustry. We strongly encouraged themto come to a fair agreement with thetrade union to alleviate the situation.

With respect to the content moderation
business, the company held the viewof being compliant with the UN Global
Compact. Given the seriousness of theallegations, we asked for informationon the internal and external audits thatwere to be conducted.
Since then, the company has
announced its decision to exit thehighly egregious part of the content
moderation business and a global
agreement with an international
trade union. We consider this positive
action to be a result of heightened
investor pressure.

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03.4 Engagement outcomesPrinciples

79Communicating our Stewardship Principles
Shaping sustainable pathways towards change

Supporting employee rights
at a large US retailer
In 2022, we continued engagementwith a US retail company on
employment rights and specifically theright of employees to organise which
we considered had been impaired.
These rights are recognised humanrights, contained in the International
Labour Organization’s Core Labour
Standards and subsequently adopted
in national pieces of legislation
including in the US. This becomes
more nuanced when evaluating thespecific practices companies take,for example mandatory attendance ofsessions to dissuade employees fromsupporting unionisation. As investors,

we consider it the role of the Board
to supervise management as well as
managing business material risks.
Retail companies employ a large
number of employees and therefore
human capital management isbusiness material. The engagement
informed our vote at the AGM and we
decided to hold directors accountable
for the matter. It also provided input
to our assessment of the adequacyof governance of human capitalmanagement issues, which we
believe for large employers is aforward indicator to the likelihood offurther controversy.

Allianz Global Investors Sustainability and Stewardship Report 2022

We continue to publish viewpoints
via our Stewardship Principles series,
launched in 2021. These outline
the ways we work with investee
companies to promote best corporate
governance practice and shapepathways towards environmental andsocial transformation. We also shareresults of our themed engagements.
Where appropriate, we advocate
new governance concepts for certain
markets or industries, as evidenced
by our piece on the Lead Independent
Director for the German market.
A deep dive into changing market
trends led to our paper on Shareholder
Resolutions in the US.

Why German companies
should embrace the role of leadindependent director.
Shaping US practice throughshareholder resolutions.

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03.4 Engagement outcomesPrinciples

79Increasing engagement in Asia
We have stepped up engagement
activities dedicated to our investments in
Asia, led by our local Stewardship Analyst
and Investment teams. This was motivatedby rising expectations of clients regarding
sustainability aspects of funds in Asia,
increased relevance of these issues to ourfund business, and evolving regulatory
requirements for sustainable funds.

Many Asiancompanies lack
incentives toproactively develop
robust climate
strategies.

AllianzGI’s engagement activities
in Asia are guided by our top-downthematic pillars and also by issues we
identify as most critical to the market,
such as long-standing governancerelated topics, climate strategies,
supply chain management and diversity.
Biodiversity only started to draw
companies’ attention in Asia very recently
and we engaged on this emerging topic
as well.
We leveraged the close partnership
between the Stewardship team andlocal Investment team professionals to
proactively engage with our portfolio
companies. Our engagements focus on
evaluating company performance on
governance and sustainability, setting
expectations on KPI-based targets toencourage sustainability outcomes,
and sharing global best practice within
the industry to guide on transition.
We have observed a notable increase in
responses to our engagement requests
and improved ESG disclosure in the Asianmarket in 2022.

Allianz Global Investors Sustainability and Stewardship Report 2022

Shaping sustainable pathways towards change

Climate strategy engagementwith a financial service
holding company
We believe that large financial holding
companies in Asian markets could play
an important role in driving different
sectors’ decarbonisation pathways.
However, many Asian companies
lack incentives to proactively develop
robust climate strategies due tocontrolling shareholding structuresor lack of concrete guidelines fromlocal regulators.
During the engagement with aJapanese financial holdings company,
we discussed climate strategies of
its own operations and its financed
activities in the overall portfolio.
On Scope 1 and 2 emissions,
we assessed the feasibility of thecompany’s zero-carbon emissions
plan, including renewable energy

usage, green certificates purchase withgood quality and other energy-saving
measures. On its financed activities,
we challenged how they would
expand their GHG emissions reduction
interim plan from its current focus ona few sectors to include other carbonintensive sectors. We also investigated
how the asset management arm of
the company practises sustainable
investment in its portfolio.
The company shared detailed actions
and concrete figures. It committed
to incorporating more sector specificdecarbonisation interim goals in the
coming year as it updated its climate
strategy. We will reassess progress
going forward.

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9

Shaping sustainable pathways towards change

Biodiversity engagement with acosmetics company
Among several biodiversity-themed
engagements in Asia, we spoke witha leading Chinese cosmetics producer
to understand progress and urge it
to take more action. We discussed
the impacts and dependencies thatthe cosmetic industry can generate
on biodiversity and raised questions
about its use of Roundtable on
Sustainable Palm Oil (RSPO)certified products among all palm
oil materials it uses. We also asked
whether plastic microbeads have beenphased out and what substitutes arebeing used, and explored its choiceof preservatives. Besides focusing on
progress, we explored its future plans
and commitments. We shared global
best practices from the cosmetics
industry to encourage the company
to form longer-term visions.
With board-level oversight, the company
committed to tackle biodiversity
challenges in collaboration with its
supply chain companies. It showed aninterest in applying stricter standards
than minimum domestic requirements
on chemical safety. We will follow up
with the company on future progress.

Shaping sustainable pathways towards change

Engaging a Taiwanese company
on gender diversity
Given the historical imbalance, gender
diversity is among the most criticalsocial issues worthy of attention
in many major Asian markets.
Our conversation with a Taiwanesecompany began with questions about
how the company’s policies guide a
top-down approach and whether there
is board-level oversight on gender
diversity-related measures.
We wanted to understand granulardiversity indicators to assess thecompany’s performance as well asinternal initiatives and training for

Allianz Global Investors Sustainability and Stewardship Report 2022

female employees and efforts toestablish a sound talent pipeline.
We also discussed quantitative shortand mid-term plans to raise female
managers’ participation and targets
on recruitment.
Recognising investors’ expectations,the company committed to raise
female senior management
participation to more than 30% levelin the short term. We see it as animportant milestone that the company
appointed its first-ever female director
to the board in 2022.

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03.4 Engagement outcomes

03.4.4 Engagement topic: Fostering
good governance and transparency
Strong governance practices atinvestee companies are criticalenablers of investment performance.
With these practices in place, boards
and management can better address
other topics that are highly relevantto the business and investment case,including environmental and social risks.

Principles

In 2022, we engaged 237 companies atleast once on a governance issue andcontinued our engagement focus on thefollowing topics:• Board composition, quality andcompetence of board members;• Succession planning for chairpersons,directors, and executives;• Independence and expertise of
key committees;• Structure and quantum of executive
remuneration, including ESG KPIs in
pay; and• Shareholder rights, for example in thecontext of takeover-related matters orcapital issuance authorities.

237
In 2022, we engaged with

7

9

Shaping sustainable pathways towards change

Addressing overboardingwith an Irish company
Overcommitment by directors is aserious concern for investors as it cancompromise the quality of boards.
This is explicitly covered within
our global Corporate Governance
Guidelines which outline our position
on what other commitments are
acceptable for a board member.
Since 2021, we have engaged withan Irish building materials supplier on
overboarding concerns. We considered
the chairman to be at risk given
multiple external appointments,

including as chairman of anotherlisted plc. We initially abstained on
the re-election until we could gather
additional information. Through followup engagements with the company,
we received further details on theroles of the chairman who had apositive track record of managing
his businesses throughout the Covidimpacted period. Given the value andexperience he brought to the board,
we offered our qualified support andwill keep the issue under review.

companies at least once
on a governance issue.

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Principles

Shaping sustainable pathways towards changeFirst-time engagement onboard independence witha Chinese multinational
We engaged with a Chinese
multinational technology company
on board structure issues, with a
key focus on board independence.
Its board of directors lacked an
independent majority for several
years. The company used to adopt
a conservative communication
approach with investors on corporate
governance topics, but proactively had
expanded its ESG team in the pastmonths. We approached the company

Allianz Global Investors Sustainability and Stewardship Report 2022

and expressed our expectation that itshould incorporate additional nonexecutive directors to mitigate investor
concerns. This would also benefit
its overall ESG rating. We received
positive feedback from the company
which added two additional
independent directors to the board at
its recent general meeting, resulting ina majority independent board for the
first time in years.

7

9

Embedding ESG KPIs in remuneration
Following the updates to our proxyvoting guidelines, a key element of ourengagement on remuneration is aroundthe integration of ESG metrics into
executive compensation.
See section 03.7.2.
This is a trend across multiple markets
and our feedback to companies is that wewant to see metrics which are transparent,
quantifiable and tied to the long-term
strategy. We look to assess whether KPIs
proposed by the remuneration committee
clearly align with the wider businessmodel and material issues and how
weightings and stretch targets drive value
creation and strategic decision making.
A European professional services company
sought to include climate metrics in theirannual bonus scheme. We engaged the
remuneration committee to understandthe rationale for including this metric andits preference for the short-term incentive.
We understood that this tied into its
sustainability strategy, which would be
supported by SBTi verification, and that it
impacted a larger number of employees.
We therefore supported the proposal.

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Shaping sustainable pathways towards change

Improving board structureand executive pay with a US
construction company
Following up on a failed Say on Pay
vote at the AGM, we engaged theCompensation Committee of a US
construction company to encourage
certain governance improvements.
We met virtually with the committee
chair. The company committed
to reduce the gap between pay
levels of the chairman and the CEO,a key request from us to improvegovernance. Our expectation is thatthe lead executive role commands
the highest pay. Lack of clarity on

05 Appendix

this could imply informal balanceof executive power that is nottransparent. Additional outcomesrequested include the introductionof a more challenging vesting
scale for the long-term incentive
plan. Our conclusion following thisengagement was that the board, via
the actions taken by the Compensation
Committee, met our expectations
for responsiveness to shareholder
concerns. Their action resulted inmaterial improvements to governance.

Allianz Global Investors Sustainability and Stewardship Report 2022

Engaging Swedish companies on
governance practices
In 2022, we voted against 29% of director
elections at Swedish companies. While weappreciated that most companies havestarted to unbundle directors’ elections
allowing us to assess board candidates
on a case-by-case basis, we still have
two main issues which impact the qualityof boards and prompted many against
votes. First, directors often have various
other commitments at boards and/or
executive level of private and publiccompanies. We are concerned that this7

9

may impact their ability to dedicate
sufficient time and energy to fulfil
their duties. This often extends to thechairperson. Second, we found that many
boards and committees are not sufficiently
independent due to long tenure andshareholder representation. This remained
a major reason for us to cast dissent votes.
As we found this to be prevalent in the
Swedish market, we started a broader
engagement campaign and sent letters
to our investee companies detailing
our governance expectations. We willcontinue our engagement in 2023.

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03.5 Collaborative engagements
Shaping pathways towards change requires collaborative
engagement with other investors to increase our impact. In somecases, collaborative engagement is the most effective way for
AllianzGI to achieve engagement objectives for our clients. It isparticularly important where we have major concerns and only
small holdings in investee companies. While we led the majorityof our engagements ourselves in 2022, we undertook several
collaborative engagements with a focus on climate issues,
diversity and governance matters.
1. Climate Action 100+
We have been a member of
Climate Action 100+ since Dec 2017.
Collaborative engagements of CA100+
target companies supplement our
individual engagement efforts on
climate change. With the Climate
Action 100+ initiative entering its
second phase in 2023, we provided
feedback on the consultation assessing
its future set up and aim to continue ourwork with this group and expand ourcollaborative engagements.
In 2022, we contributed to engagementof a Chinese oil major as a collaborative
investor in the group, with the focus on
strategic planning of its decarbonisation
pathway and top-down management

oversight. Having received some proactive
disclosure from the company, we will
follow up pursuing policy consistency
once new board members will have been
elected in the upcoming 2023 AGM.
2. Ceres Food Emissions 50
With a natural link to our planetary
boundaries thematic, several of ourfunds are themed around sustainability,
food and water. The food sector is also
closely linked with climate risks as theglobal food system is responsible forapproximately one-third of all global
GHG emissions.8 We are a member of theFood Emissions 50 effort, co-ordinatedby Ceres, which aims to accelerate
progress to net zero by engaging 50 of thehighest-emitting public food companies

05 Appendix

Principles

in North America. The initiative seeks to
improve GHG emissions disclosures andask companies to set ambitious emissions
reduction targets and implement credible
climate transition action plans in line with
the Paris Agreement.9
We conduct our engagements bilaterallywith companies we hold in our portfolios.
As part of our involvement, we engageda US consumer staples producer.
We discussed the company’s approachto target setting for Scope 3 emissions
reduction and how it acts to ensuresustainable food chains.
Additionally, we regularly join the land
use and climate working group and thebiodiversity working group where we takepart in discussions on research and market
practice trends. Relevant insights areshared internally across the investment
platform to support knowledge building.
3. The Investor ForumWe contribute to engagements facilitatedby the Investor Forum in the UK – a forum
established by institutional investors in
UK equities. These engagements relate
to business strategy, environmental
concerns, management of social risks

7

10

and board oversight, among other topics.
In 2022, we undertook fewer collaborative
engagements via the Investor Forumbut participated in additional company
meetings initiated by management.
These allowed executives and theboard to reach a wider audience for
their discussions.
We participated in an Investor Forumworking group on voter turnout in Irish
companies that noted tangible outcomes.
These included enhanced engagement
between key contributors in the proxyvoting value chain, identification andresolution of the source of unnecessary
share-blocking flags, and improved
understanding of how the intermediatedissuer central securities depository (CSD)
model works. This highlighted further
lessons and the need for improved
communication through the voting chain,
defined escalation processes and greater
innovation. In 2022, AllianzGI voted
at 76% of votable meetings in Ireland.
This contrasts with 70% in 2021 andreflects improved market functioning.
We will now seek to further assert ourshareholder rights and extend this work
into other markets such as Norway.

8 Food and Agriculture Organization of the United Nations, March 2021.
9 Ceres Food Emissions 50.

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03.5 Collaborative engagements

Legal framework and policy
engagement in Germany
In AllianzGI’s home market ofGermany, collaborative engagement
is still in an emerging state due to aregulatory environment that is notclearly defined when it comes tothe “acting in concert” implications.
This means that there is considerable
uncertainty among asset managers
and owners as to the conditions
under which they may cooperate inengagements. We continued policy
work on this topic in 2022 via the
DVFA10 Governance and Stewardship
Commission, the Working Group on
Sustainable Finance at the Ministry of
Finance and public speaking to seek
clarity from the German regulator on
the topic.

05 Appendix

Principles

4. Promoting gender diversity
In line with our sustainability theme ofinclusive capitalism, we chaired the French
investor group of the 30% Club, a global
campaign aiming to increase gender
diversity on boards and executive teams.
In 2022, AllianzGI joined all corporate
engagements, including 18 in-person
meetings and conversations via email.
We engaged with a French defence andaerospace company on their diversity
strategy and how they are planning toachieve gender equity and reduce thegender pay gap. In one year, the company
made great steps towards its diversity
trajectory, committed to realistic andcredible targets, and reaffirmed theobjective of the firm to be in line with
30% Club France vision. In particular,
the company has a very proactive
approach to close the gender pay gap,
which stood as a best practice.
We also continued to engage with aFrench reinsurance company on gender
diversity due to the disconnect between
the percentage of women in the workforce
and at management/executive positions.
We appreciated the transparency andthe openness to address our concernsand observed a slight but real shift withrespect to meritocracy and looking to thestrengths and competences brought about
by cognitive diversity, ie, the presence ofbroadly diverse perspectives of mind.
5. PRI Advance Coalition on Human Rights
In line with our sustainability themeof inclusive capitalism, we decided tobroaden our engagement approachon human rights. In 2022, we joined the
PRI Advance stewardship initiative forinvestors to act on human rights and social
issues. AllianzGI joined as a collaborative
investor and will work jointly with otherinvestors on engaging companies in
Europe and Asia in 2023.

7

10

issuers. We are active in group discussions
and advocacy around labelled bonds anddebt and fiscal transparency. We also
share lessons from our work on the
Sustainable Bond Market Advisory Groupof the London Stock Exchange, as well as
presenting at industry conferences on ESG
topics in emerging markets.

6. Collaborative engagement onsovereigns: Emerging Markets
Investors Alliance
Shaping sustainable pathways towards
change requires a collective and long-term
approach to emerging market sovereign
engagement. We joined the Emerging
Markets Investors Alliance (EMIA) as a
Board Member in 2022. This pro-bono
industry association brings together
emerging market investors, NGOs andthink tanks to advocate for better ESG
outcomes at sovereign and corporate

10 Association of investment professionals in Germany.

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03 Active stewardship03.6 Escalating engagement concerns
Companies are not always
responsive to our concerns
raised through engagement or
their actions do not give due
consideration to the interestsof minority shareholders. If weconclude that our concerns
cannot be resolved throughstandard interactions withinvestee companies, we may
consider escalation to achieve
our engagement objectives.
Our engagement approach depends
on the circumstances and nature ofconcerns. Escalation options are notmutually exclusive and can be combined
depending on the situation. Initially,
engagement is typically escalated throughadditional meetings with management
and more intensive dialogue with nonexecutive directors or with the chairperson.
We prefer to address issues directly with a
non-executive board chairperson, lead or
senior independent director, or other nonexecutive board members to gain senior
input on the matters of concern. We consider
emphasising our position to the board inwriting if we have the impression that directinteraction has been unsuccessful.

04 Corporate sustainability

05 Appendix

Principles

7

11

We prefer to engage directly withcompanies but, where direct engagement
does not progress satisfactorily or
where our shareholding is insufficient
for an effective escalation in ourown right, we consider other options.
These may include:• Voting against resolutions atshareholder meetings.
• Collaborating with other institutional
investors on single issues.
• Joining a collaborative engagement
initiative co-ordinated by investors,
trade associations and otherorganisations where these seek
to address market or industrywide concerns.
• Expressing concerns through advisers to
the company, for example in merger andacquisition (M&A) situations.
• Co-filing/filing resolutions atshareholder meetings.
• Reducing or exiting our investment
position when appropriate (any decision
to exit an investment position is taken ata portfolio level).
We consider making public statements
in respect of individual companies as alast resort when all other channels of
constructive dialogue have been exhausted.

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03.6 Escalating engagement concerns

We apply these tools broadly acrossour holdings globally. For fixed income
holdings, escalation tools are by nature
more limited as they do not extend toactions taken in the context of shareholder
meetings. However, if we have holdings
both in equity and fixed income funds,
we lead escalation measures across asset
classes to be more effective.
See also section 03.7.
1. Concern over delisting of aninvestee company
We engaged several times with a German
company that intended to delist from theFrankfurt Stock Exchange. We were notconvinced with the rationale the company
put forward and considered this move tohave potential negative implications for ourinvestment universe in certain strategies.
As a result, we brought the issue to theattention of the whole board. The company
was not responsive to our concerns, and we
decided to vote against the related agenda
items at the extraordinary general meetingin early 2023.
2. Controversy related to deforestation
A core part of the investment thesis fora UK energy company has been theuse of biomass as a renewable energy
source, which came under scrutiny
following a televised investigative report.

Our Sustainability team held a seriesof engagement meetings with subject
matter experts and Investment teams
to crowdsource perspectives. We thenescalated the topic with the company andcompleted two separate calls – one withthe board and the other with the Forestry
unit – to understand the firm’s sustainablebusiness practices, governance overlabels in different locations and thebroader regulatory environment inwhich it operates. The insights we gained
through collaboration across the firmtranslated into a thorough engagement
on a complex topic and our informed
perspectives were appreciated by thefirm’s management. Portfolio managers
across investment styles gained deeper
perspectives into their investment
theses, and some decided to divest
as a consequence. We were also able
to provide stewardship advice to an
investee company.
3. Supporting dissident board candidates
We engaged a US industrial company
amidst an activist campaign culminating
in a proxy contest. The activist pointed tofinancial under-performance, proposing
a stronger element of independence
on the board to address this. We hadbilateral calls with both sides. During our
discussions with the board, we voiced

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11

our concerns on climate disclosure andpointed to progress lagging behindpreviously given commitments. As an
outcome, we supported the dissident
board candidates and voted against therecommendations of management.
4. Targeting improved cybersecurity witha German media company
We had entered a multi-year engagementwith a company based on its policies
and governance on cyber security,
which we considered to be a material risk.
We considered the company’s IT security
and data protection framework to be
insufficient and had escalated our concern
with the management board in 2020 andfollowed up in 2021. In 2022, we requested
another conversation at management
board level and were pleased to seethat the company had greatly improved
its governance around cyber security
and data protection, made considerable
investment and employed more people todeal with these issues. We consider this tobe a stewardship outcome of our multiyear engagement and escalation strategy
with the company.

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03.7 Exercising our voting rights
Exercising voting rights atshareholder meetings is afiduciary responsibility to ourclients and a core part of our roleas an active investor. It allows
us to have a say on some of themost important issues affecting
the long-term development ofinvestee companies.

We apply proprietary Corporate
Governance Guidelines across ourholdings globally. We put great effort andcare into developing in-house views andpositions on corporate governance andproxy voting matters. Our voting decisions
are informed by in-depth research,
analysis and engagement with investee
companies which we often conduct over
several years. Detailed proxy voting
policies help shape our voting decisions.

Our focus issues for proxy voting
include the election of board directors,
executive compensation, capital-related
authorities and the appointment of
external auditors. Other important
voting topics include climate change,
workforce diversity, labour rights,
political donations and lobbying activities.

Voting on shareholder proposals is a
key part of our stewardship programme.
Shareholder proposals offer companies
an important insight into the views andconcerns of investors. They provide
meaningful support for issues raised thatmerit careful consideration by companies’
boards and management. We customarily
review shareholder proposals for all
our holdings. Given the variety andvariability of shareholder proposals, it isoften difficult to develop policy positions
on the issues raised by shareholders;hence we prefer to review and vote ona case-by-case basis, taking account offactors such as the nature of the proposal,
whether it might be overly prescriptive innature as well as the company’s policies
and progress.

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Principles

Our goal is to vote at the shareholder
meetings of all the companies we investin, where we have the authority to
exercise voting rights. Our Proxy Voting
Committee reviews vote outcomes andwe evaluate and address notable yearon-year changes in the number of shares
voted. We respect the right of clients insegregated accounts to retain voting
rights, request that voting rights are
exercised in line with the client’s voting
policy, or delegate proxy voting andengagement activities to a third-party
service provider.
We do not provide clients with the option
to influence voting decisions on a caseby-case basis. We are committed to fulltransparency of our proxy-voting activities.
Our disclosures include detailed Global
Corporate Governance Guidelines,a Stewardship Statement detailing our
engagement and conflict of interest
policy and real-time disclosure of all votes
cast, accessible through our website.
This insight includes commentary on ourvotes against resolutions and abstentions.

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12

2022 highlights

10,200shareholder meetingsparticipated induring 2022

Representing
94%

of all votable meetings

We opposed 22%of all management
resolutions

At 69%of meetings globally,
we voted against,
withheld or abstained
from at least one
agenda item86

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Principles

03.7 Exercising our voting rights

03.7.1 Ensuring a robust
voting process
All proxy voting research and initial voting
recommendations are generated basedon our proprietary proxy voting policy.
Proxy voting research is provided by
Institutional Shareholder Services (ISS),a third-party proxy voting service provider.
We use an electronic proxy voting
platform provided by ISS to cast ourvotes. Our Stewardship team is in ongoing
contact with ISS whenever questions
arise with regards to a specific piece of
research and the application of our policy.
Additionally, we hold quarterly review
meetings to review broader process
issues involving teams responsible forcompliance and the operational integrityof the voting process next to members of
the Stewardship team.
We review a weekly report from
AllianzGI’s Central Enterprise Data
Repository11 specifically centred aroundvoting rights and entity. This picks up
any change or addition to voting rights(and the effective dates of these changes)
attached to all accounts and informs
operations to update these statuseswith our provider, ISS. The reporting
contains asset class information to clearlyshow which accounts require attention.
We also conduct a quarterly audit acrossall our funds with data reviewed by
the Compliance team. We review andchallenge unvoted meetings.
We take a risk-based approach toresearch and analysis around proxyvoting. This means the Stewardshipteam focuses its efforts on reviewing
shareholder meeting proposals for the
proportion of holdings in our portfolios
deemed particularly important to us andpotentially higher risk. These holdings aremainly large aggregate positions acrossour strategies, core holdings in individual
funds, companies with an ongoingengagement activity, etc. Our proxyvoting policy is consistently applied to theremaining holdings.
Once reviewed, proposals are posted
on an internal global research andcollaboration system which is accessible
to our Investment teams. This means
they can review potentially contentious
proposals for holdings in their portfolios
and discuss them with the Stewardship

2

7

8

11

12

AllianzGI proxy voting process

Portfolio
holdings

General meetings:
Application ofdate and agenda AllianzGI’s PV policy

Automated vote
implementation

Vote
execution

Manual vote
implementation

Vote
execution

Selection
criteria apply

Case-by-case review

Review by
stewardship analyst

team for further analysis before reachinga consensus decision. For policy overrides,
internal consultations involving analysts
and portfolio managers also take placethrough this platform. We aim to have
one integrated view when it comes toproxy voting decisions. In exceptional
cases where we do not reach consensus,
voting decisions are escalated to the Proxy
Voting Committee.

In a minority of cases, we apply policy
overrides – for example, when wegain additional information following
engagement that is pertinent to the voting
decision, or when a company makes acommitment that we consider important.
We may also override policy to factor in
specific circumstances concerning thecompany, for instance its business context.

11 The internal repository for all of AllianzGI’s vehicle, investment, operational (static) data.

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03.7 Exercising our voting rights

03.7.2 Strengthening voting policy
and process
We review our global corporate
governance guidelines and related
policies at least annually, consideringchanges in market developments,
vote turnout, regulatory amendments
and changes in expectation levels of
our clients.
We include feedback from our service
provider on the applicability of our voting
policy in the review process. All proposed
amendments to the guidelines andvoting policy require consultation with
our investment platform, involving equity
portfolio managers in all our locations
globally. Input from Investment teams
enables us to create a nuanced approachthat combines global best practicestandards for corporate governance withthe knowledge of how these can be best
applied and promoted in local markets.
Amendments to the global corporate
governance guidelines are approvedby the Global Proxy Voting Committee.
The committee considers proposals forchange as raised by the Investment and
Stewardship teams.

In 2022, we continued to strengthen our
voting policy with respect to sustainabilityrelated aspects, relating to say on
climate and ethnic diversity (see table).
This approach reflects our three themes.
A notable change to our guidelines
included the decision to vote against
remuneration policies of companies withlarge market capitalisation in the EUthat have no ESG KPIs included as of2023. We believe management should
be incentivised to take sustainability
aspects into account when making
strategic business decisions, particularly
climate change.

5

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12

Select changes to our Global Corporate Governance Guidelines in 2022
Issue

New policy

Reason for the change

Say on Climate

Vote against director in case of low
vote turnout and if company is not
responsive to investor concerns.
Vote against Chair of Nomination
Committee or Chair of the Board if
board does not have at least one
director with an ethnic minority
background (US).
Include ethnic diversity aspect
into our UK voting policy whenevaluating director elections.
Vote against remuneration policies
without ESG KPIs (EU / large
company) as of 2023.

Refining our voting approachon Say on Climate

Ethnic diversity

Ethnic diversity

ESG KPIs in
remuneration

Developments in the US

Recommendation of theParker Review
Expectation for companies
to set proper sustainabilityrelated incentives

03.7.3 Securities lending
Securities lending can enhance returns
where it is deemed appropriate. We do
not actively engage in securities lending
on behalf of our mutual funds or assets
for institutional clients, whether via an
in-house securities lending desk or athird-party agency. However, where an
individual institutional client requests us
to facilitate securities lending throughexternal agency lending – for example
via an independently selected custodian –we strive to support this activity within ouroperational process frameworks.

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03.7 Exercising our voting rights

03.7.4 How we voted in 202212

How we voted by topic

We participated in 10,200 shareholder
meetings in 2022 (2021: 10,190),
representing 94% of all votable
meetings.13 We voted against, withheld or
abstained from at least one agenda item
at 69% of meetings globally (2021: 68%).
We opposed 22% of all resolutions(2021: 21%).

Executive compensation
Compensation-related proposals
continued to stand out as the mostcontentious area globally, with AllianzGI
voting against 43% (2021: 47%) of allcompensation-related management
proposals. This is unsurprising as they
were introduced by regulators in several
markets as a conduit to allow investors
direct voice on pay. We typically voted
against packages that were not supported
by robust and challenging targets or when
performance KPIs and actual targets were
not sufficiently transparent. A persistentconcern is that pay plans often reward
underperformance, which we donot support.

These figures reflect our highly active
and globally consistent approach tostewardship and our willingness to voteagainst proposals that do not meet
our expectations.

Voting in 10,200 shareholder meetings
%

7

11

12

Voting on 104,552 single proposals
%

2
31

69

In favour of management
Against management, with at least
one vote, withheld or abstained

22

76

In favour of management
Against management
Abstained/did not vote

12 The voting examples provided in this section were selected contextually, as they illustrate a key featureof the voting stance and trends of our voting application.
13	We cast votes for all holdings where we have voting rights. However, in certain cases votes cannot be
executed, for example, if share blocking applies, or only at a high cost in markets where Power of Attorney
is required. Thus, the share of meetings voted came in slightly below all votable meetings.

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03.7 Exercising our voting rights

The EU Shareholder Rights Directive II,
where investors are given a say on pay
and a vote on remuneration reports,
has been a positive driver for investor
dialogue. In 2022, in some European
markets such as Germany or Sweden,
regulation required companies to put
their remuneration report to a vote forthe first time. In Germany, AllianzGI voted
against 47% of all compensation-related
resolutions and abstained on another 8%.
In Sweden, we voted against 46% of theseresolutions and abstained on another 9%.
In a number of cases, we had concerns
over transparency, particularly related
to clearly disclosing the link between
performance and pay-out. Other issuesof concern were discretionary pay
components not backed by performanceand high pension provisions.
The very limited, and frequently absent,
disclosure on ex-post targets for shortterm and long-term incentive plansconstituted the main reasons for voting
against. We expect engagement with
our portfolio companies to result in moretransparency over time.

05 Appendix

Our rate of opposition to pay-related
proposals in the US in 2022 continued
to be high at 78%, a slight reduction on
2021. Considering say on pay proposals(advisory vote on executive pay) alone,
the rate of opposition was much higher
at 88%. We remain concerned that many
US companies fail to operate long-term
incentives that truly reflect management
out-performance rather than market
movement. In 2022, we re-focused ourapproach to concentrate our stewardship
activities on the worst cases of high pay
for mediocre performance.

opportunity available under the
long-term incentive, although thiswas reserved for future headroom
with a smaller increase proposedin‑year. The Remuneration Committee
also sought flexibility in exceptional
recruitment awards to ensure they could
attract the right talent. After engaging
on the underlying rationale, we voted
for these changes given that thecompany had demonstrated historicalignment with pay and performanceand a moderated approach tocompensation increases.

1. We voted against the remuneration
policy of a European utility company.
As part of the 2022 remuneration policy,
the board proposed an exceptional
bonus to the CEO in connection witha corporate transaction which had
not yet been completed and thebenefit to shareholders not proven.
Reflecting shareholder opposition,
the board announced during the AGM
that it would withdraw the resolution
and, accordingly, it was not voted on.

Board independence, overboarding androle of the chair
In 2022, we voted against 23% of all
director-related proposals, consistent
with the previous year. We opposed 25%of all director elections as we continue tohave major concerns about the sound andbalanced set-up of many boards. We also
voted against several companies where
we deemed the board of directors and/or board committees to be insufficiently
independent, either because directors
had a long tenure or where they wererepresentatives of major shareholders.
This remained a concern in the US andthe UK where we routinely come acrossdirectors with long tenure.

2. As part of ongoing engagementwith an Irish building materials
producer, we met to discuss theirlatest remuneration policy and report.
They sought to increase the maximum

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Overboarding is a major ongoing concern
in many markets. As demands on nonexecutive directors increase in times of
economic uncertainty and geopoliticalrisk, we voiced our concerns and typically
voted against when full-time executives
take on more than one non-executive
role, or when non-executive directors
take on too many appointments in public
and private companies. We encouragecompanies to improve gender diversity
and, in the UK and the US, ethnic diversityof their boards. We expect this to beachieved by broadening the pool oftalent from which to select, rather thanexcessively overboarding individuals
and exposing them to heightened
professional risks.
Concentration of power at the top of
a company through combined chair/
CEO roles also led to votes against.
In these cases, we expect companies to
put appropriate checks and balances inplace, such as the appointment of a leadindependent director.

05 Appendix

1. In France, we observed in 2022 several
successions at the top of CAC40
companies where the outgoing CEO
and chair was appointed as nonindependent non-executive chairman.
While we welcome the dissociation of
CEO and chair roles, we voted against
the appointment as chair when it was
not for a short period of time to ensure asmooth transition. This position explains
the increase in dissent votes arounddirectors’ election from 22% in 2021 to
33% in 2022.
2. In 2022, we voted against the seniorindependent director of a UK-listed
mining company due to concerns
around overboarding. In addition to
being a non-executive director at thecompany, the nominee held a numberof chairman roles at various listed(and private) entities. Given that theapparent workload went beyond ourpolicy limits, we withheld our support
at the AGM to make clear our concerns
around the nominee’s capacity todischarge their responsibilities.

Auditor-related votes
We expect investee companies toregularly evaluate and retender audit
contracts and to change auditors after
a maximum of 20 years of service unlessstricter local laws apply. We voted against
28% of proposals to ratify the auditor(2021: 26%), especially when there wasno commitment from the company toretender the audit mandate. We continue
to have concerns about some Chinesecompanies and voted against 46% ofresolutions. Although this marks an
improvement on 2021 (60%) due to better
disclosure on auditors’ qualifications andaudit fees, we expect more companies toprovide a breakdown of audit fees versus
non-audit fees for investors to evaluate
the independence and objectivity of
the auditor.

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12

Capital-related resolutions
We continued to vote against large
capital issuance authorisations that were
not supported by a credible businessrationale from management. We voted
against 16% of capital-related proposals
in 2022 (2021: 15%). Only in exceptional
circumstances will we support an increasein capital with pre-emption rights ofgreater than 33% and an increase incapital without pre-emption rights ofgreater than 10% – and only when it isjustified by an individual company.14
As in previous years, our concerns focus
on certain markets. In Hong Kong andTaiwan, we voted against almost 30%
of capital-related resolutions. In several
European markets such as Germany,
France and Spain, we voted against
in more than 30% of cases. Frequently,
our votes against were because
companies did not provide pre-emption
rights according to our expectations.

14 Note that AllianzGI applies stricter rules for Germany.

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In the US, we voted against almost 60% ofsuch resolutions. A frequent concern wasaround resolutions to increase authorisedcommon stock by over 10% where thesewere not undertaken in exceptional
circumstances and appropriately justified
by the company.
1. We voted against a capital-related
resolution at the AGM of a Chinesecompany. The company intended toprovide full guarantees to several
non-wholly owned subsidiaries andexternal third parties, without giving
persuasive justifications or purchasing
counter guarantees. Regarding thistype of commonly observed practice,
the disproportionate guarantee liabilities
would expose listed companies
to excessive risks relative to theirownership interest. Therefore, we
opposed these proposals. This is partof our engagement focus in the market
and we observe an increasing numberof listed companies starting to purchasecounter guarantees to mitigate
investor concerns.

05 Appendix

Climate-related resolutions
2022 marked our second year of voting on
two types of climate-related resolutions.
The first type is put to vote by management,
the so-called Say on Climate, typically toseek shareholder approval for climate
strategy, GHG reduction targets and actionplans. The second type of resolution is put
to vote by shareholders and varies in scope,
often requesting the company sets more
ambitious climate commitments, enhances
disclosure or takes specific action.

framework. As climate transition plans
are specific in nature, we evaluatedaround 50 Say on Climate resolutions on
a case-by-case basis using these sector
specific frameworks.

We generally support shareholder
resolutions that ask companies, forexample, to report on their climatechange strategy in alignment with theParis Agreement or seek information
on climate-related financial, physical or
regulatory risks and how the company
manages such risks. We evaluate theseresolutions on a case-by-case basis as they
are often specific to each company.

1. We voted against the approval ofa climate report of an Australian oil
and gas company. The company’scommitment for net zero by 2050 only
covered Scope 1 and 2 emissions.
There were no Scope 3 targets inplace and the reduction strategy wasvague. While the company considered
its approach to be Paris-aligned,
we did not assess its strategy ascredible without inclusion of a Scope 3
reduction target. At the same annual
meeting, shareholders filed threeother proposals which we supported
to encourage enhanced transparency
and better alignment with a Parisaligned approach.

We continued to strengthen our voting
guidelines around say on climate
resolutions, including director accountability.
We also refined our approach to assessing
companies’ climate transition plans, with ourstewardship analysts and Research teamjoining forces to establish an analytical

2. We supported a shareholder resolution
at a US retail company requesting the
adoption of targets to reduce full value
chain GHG emissions. Retailers can andshould influence Scope 3 emissions
to progress along a science-based
trajectory to net zero. Beyond theAllianz Global Investors Sustainability and Stewardship Report 2022

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12

benefits of reduced emissions, we
believe that having good visibility ofsupply chain emissions brings strategic
benefits to companies and theirshareholders, as well as improving thequality and resilience of supply chains.
Voting shareholder resolutions
In 2022, we voted on 2,600 shareholder
resolutions globally. There were record
numbers of shareholder resolutions in
the US in 2022; these resolutions wereby far most prevalent in this market.
Shareholder resolutions have the potential
to play an important role in shaping
companies’ sustainability and governancepractices. To explain our view andapproach, we published a paper on the
topic in our series Stewardship Principals.
We typically support longer-term focused
resolutions with a focus on improving
corporate practice and transparency.
We tend not to support resolutions thatare too granular, overly restrictive, likely to
impose an unreasonable administrative
burden, or where we believe acompany has already demonstrated
reasonable progress.

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03.7 Exercising our voting rights

In the US, we voted on 674 proposals
including 126 on corporate governance(excluding director elections and director
related) and 28 on compensation, 214 on
various social themes and the remainder
environmental resolutions or a blend ofareas, demonstrating our comprehensive
approach to voting on governanceand sustainability-related shareholder
resolutions. Globally, we supported
80% of all climate-related shareholder
resolutions, 96% of human-rights related
resolutions, and 94% of resolutions withrespect to greater transparency onpolitical contributions and lobbying.
1. We supported a climate lobbying
shareholder resolution at a US airline
company. Transparency on climate
lobbying is in shareholders’ interest
given the importance of the sectortransition. Better transparency canhelp in mitigating climate transition
risks and reputational risks byensuring the lobbying activities of thecompany are aligned with the Paris
Agreement. For this company, thevote was in the context of a broader
climate engagement during the year,
and we supported the request for
greater transparency.

05 Appendix

2. We supported a shareholder resolution
at a US transportation services
company. The resolution requested thatthe board oversee a third-party audit
analysing the adverse impact of thecompany’s policies and practices on thecivil rights of company stakeholders.
Concluding the additional insightwould be helpful to assess those risks,
we differentiated this from another
resolution on the same ballot where
we thought the company madesufficient progress and therefore did
not support this separate shareholder
resolution on political lobbying.
This granular analysis was discussedwith investment teams who are in
regular contact with the company andwere able to add valuable insight onmanagement responsiveness.
3. We abstained on a shareholder
resolution requesting a European
retailer to adopt minimum pay
standard. While we acknowledge themerits of adequate pay conditions,
including above legal minimum wage
if appropriate, and support the sector
adopting such pay levels, we did notthink it was in shareholders’ interest
to support this resolution for theparticular company at the current time.
We considered that sector price setting
dynamics could put the company ata disadvantage. The vote followed
company engagement and internal
discussion that involved relevant
investment teams who are familiar
with the sector.

03.7.5 Exercising our rights andresponsibilities beyond equities
Exercising voting rights is typically limited
to equity holdings. As debt investors, weseek to exercise rights at the fund level
where possible. Where bond issuers
have outstanding equity, our debt
investors will benefit from the ability
to exercise rights formally through ourequity holdings. However, where we view
latitude in covenants or bond terms to
be inappropriate, we seek to engage –either bilaterally or through collaborative
engagement groups (eg, ELFA15, EMIA16) –to secure better debt holder rights.

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Our engagement approach applies
to equity and fixed income holdings,
in so far as the counter parties overlap.
We ensure flow of information through ourinvestment and collaboration platform,
which both teams can access. In 2022,
we broadened and systemised work
between the Sustainability teams and
Fixed Income teams in several areas,
notably with respect to engagement(see section 03.2.1). Fixed Income teams
have been trained on the use of internallydeveloped tools and available resources
such as sector frameworks.

15 European Leveraged Finance Association.
16 Emerging Markets Investors Alliance (emia.org).

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03.7 Exercising our voting rights

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Breakdown of proxy voting by location
Percentage of resolutions voted against management in 2022
Belgium

China

FranceGermany

Hong
Kong

Italy

Japan

Netherlands

Spain

SwedenSwitzerland

Taiwan

UK

USA

16%

21%

21%

22%

29%

32%

24%

11%

14%

11%

20%

15%

4%

36%

Compensation (% against)
Belgium

China

FranceGermany

Hong
Kong

Italy

Japan

Netherlands

Spain

SwedenSwitzerland

Taiwan

UK

USA

44%

37%

23%

47%

56%

51%

12%

36%

48%

46%

23%

43%

20%

78%

Director-related (% against)
Belgium

China

FranceGermany

Hong
Kong

Italy

Japan

Netherlands

Spain

SwedenSwitzerland

Taiwan

UK

USA

8%

28%

33%

20%

36%

56%

27%

8%

17%

12%

17%

26%

4%

29%

60–69%

70–79%

Key
0–9%

10–19%

20–29%

30–39%

40–49%

50–59%

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03.8 Transparently managing conflicts of interest
Our fiduciary duty requires
us to exercise any rights –including engagement – inthe best interest of our clients.
This includes identifying,monitoring and actively andfairly managing any conflictsof interest that may arise from
our activities.

We regularly review existing and new
business processes, new products andservices, new business relationships andinternal restructuring measures to ensure
we identify conflicts of interest at theearliest reasonable opportunity.
We have identified the following major
potential conflicts of interest with respect
to our stewardship activities:
1. AllianzGI is owned by Allianz, a global
insurance and financial group whose
interests and views may not alwaysalign with what we consider best forour clients.
2. Our core business is investment
management – managing money andassets for our clients. Where a client’s
fund holds securities in a sponsor
company, a perceived conflict of interest
may arise if we exercised the proxyvote or engaged in topics on behalf ofour client which may impact our own
commercial interests or arrangements.

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3. We may sometimes have clients that
advocate a voting position with respect
to a proxy vote on a company that weview to be inconsistent with the longterm best interests of other clients.
4. We may invest in a company that is also
a significant distributor of our products.
Our dedicated governance structure andpolicies and processes for managing
conflicts of interest in proxy voting andengagement, including a Conflict ofInterest Policy which we publish in our
Stewardship Statement, comprise thefollowing elements:• Global oversight – AllianzGI has
established a Global Proxy Voting
Committee to provide oversight of theproxy voting process. This reports to theInvestment Executive Committee.
• Conflict management – There are
instances when we may not wish tovote proxies in strict adherence to ourvoting guidelines. Where a potential
material conflict of interest arises
between the company’s interestand those of a client with respect to3

7proxy voting, the Global Proxy Voting
Committee will convene to evaluate theissue, considering information from all
relevant sources.
• Functional separation – A separationof processes and management within
AllianzGI helps ensure that individuals
who are clients or have business
relationships with the firm are not able
to exercise improper influence over our
proxy voting decisions. Proxy voting
rests entirely with the Investment
platform in line with pre-definedoversight procedures.
• Training – We have implemented
employee training designed to prevent
perceived or actual conflicts of interestsfrom constituting or giving rise to amaterial risk of damage to the interestsof our clients.
• Risk management – To manage
potential conflicts in our engagement
activities, the Risk Management
function has developed clear andtransparent internal escalation
guidance. The guidance distinguishes
between non-public and public
engagement activities.

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03.8 Transparently managing conflicts of interest

In 2022, the Proxy Voting Committee
convened twice to decide on proxyvoting decisions that constituted apotential conflict of interest. As inprevious years, this concerned voting
matters relating to our parent company,
Allianz. The Committee confirmed ouranalysts’ proposals.

3

7

Type

Description and approach taken to manage conflicts of interest

Voting shares of our parent company

Context:
AllianzGI is owned by Allianz, a global insurance and financial group. Several of our funds may
invest in Allianz securities. A potential conflict of interest arises between the interest of these funds
and those of our parent company when voting on our shares.

Voting shares of our main distribution partner

Mitigating policies and procedures:
While research, analysis and alignment follow the usual processes, we instituted procedures
to make sure that shares of our parent company are voted in the best interest of our clients.
AllianzGI has also imposed strict controls and information barriers designed to insulate our decisionmaking process from improper influence and to ensure that we are able to carry out our investment
decisions and stewardship activities in a manner consistent with the interests of our clients.
In particular, all suggested proxy voting decisions are directed to the Proxy Voting Committee
for review and decision making that ensures that our fiduciary duties are respected.
Context:
We may invest in a company that is also a significant distributor of our products.
Mitigating policies and procedures:
While research, analysis and alignment follow the usual processes, we instituted procedures tomake sure that shares of a key distributor we are invested in are voted in the best interest of ourclients. In case of a significant Against vote in line with our proxy voting policy recommendationand considering the size of our holdings, the vote proposal would be directed to the Proxy Voting
Committee for review and decision making ensure that we comply with our fiduciary duties.

Information on our voting behaviour is available in real time on our website.
Proxy Voting Dashboard | AllianzGI.

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03.9 Industry engagement and commitments
Sustainable pathways to change
require industry standards to beeffective, fair and reasonable
to promote well-functioning
markets. We are an active
member of industry committees,
working groups and initiatives
around the world that
support this.

In 2022, four subgroups investigatedaspects including Social Taxonomy
and technical criteria for EU Taxonomy
objectives such as Circular Economy andUsability of the Taxonomy. We advisedon the development of an environmental
transition taxonomy, looking into
economic activities that are significantly
harmful, that transition between harmful
and sustainable and that do not have asignificant impact on the environment.

In 2022, we continued to build on
our memberships to help shape thethematic agenda, especially aroundclimate. We engaged with national andinternational regulators, policy makers
and politicians in discussions ranging fromengagement, stewardship and net zerocommitments to regulatory framework
consistency, implementation timelines and
ESG ratings.

We also contributed to the report on
the Usability of the Taxonomy whichcontains a detailed overview of thefirst implementation phase of theTaxonomy by economic operators andacross financial markets. It also includes
specific recommendations for targeted
adjustments to enhance the usabilityof the taxonomy and improve thecoherence of the broader sustainablefinance framework.

EU Platform on Sustainable FinanceThrough Allianz, we are a member of the
EU Platform on Sustainable Finance, anadvisory body subject to the European
Commission’s horizontal rules forexpert groups. The platform assists theCommission in developing its sustainablefinance policies, notably the developmentof the EU Taxonomy Framework.

The platform’s first mandate endedin October 2022. The next platform’s
mandate will run from Q1 2023 to Q4
2024. We will in particular contributeto the work of the new subgroup 1 on
usability and data which will advise the
EU Commission on (i) the usability of the

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Principles

EU Taxonomy, (ii) the usability of the wider
sustainable finance framework, and (iii)
data science.
European Fund and Asset Management
Association (EFAMA)
AllianzGI is a member of the EFAMA
Stewardship Committee and became
the chair of the Distribution Committee
in 2022. It also became a member ofthe sub-groups for Sustainable Finance
Disclosure Regulation (SFDR) and Markets
in Financial Instruments Directive (MiFID)
sustainability preferences. As a memberof these working groups, we participate
in consultations and discussions on avariety of sustainability topics at theEuropean level.
Bundesverband Investment and AssetManagement (BVI)
We chair the BVI Sustainability Committee
which focuses on regulatory and market
developments. This includes developing
industry positions such as on therequirement of minimum standards for
Article 8 SFDR products and industry
concepts such as the target market
concept to facilitate exploration of client’s
sustainability preferences at the pointof sale. We are an active member of the

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7

10

task force on SFDR implementation whichdeveloped guidance for the drafting of
the SFDR disclosure. We take part inworking groups on corporate governanceand responsible investment and helped
to shape discussion on preserving
shareholder rights in virtual shareholder
meetings, which arose in the context of theemergency laws in Germany.
Association Française de la Gestion
Financière (AFG)
AllianzGI is a long-term member of
AFG and we actively participate invarious ESG working groups. At the
Corporate Governance Committee,
we contribute to the development of
proxy-voting guidelines that we would
like French corporations to apply.
We also discuss how to improve corporate
governance practices as an opportunity
to shape the agenda towards better
stewardship practices.
In 2022, we contributed to consultations
related to the measurement of sustainable
investment (under SFDR) and promoted
a higher level of harmonisation acrossEuropean jurisdictions.

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03.9 Industry engagement and commitments

Hong Kong Green Finance
Association (HKGFA)In 2022, we became a member of the
HKGFA, a platform that brings together
players within the finance value chain
to facilitate the development of green
finance and sustainable investments inHong Kong and China. AllianzGI joined
the ESG Disclosure and Integration
Working Group which aims to foster
capacity and cooperation for sustainability
incorporation and transparency acrossthe economic value chain, and the
Policy Research and Dissemination
Working Group which offers policy
recommendations to regulatory bodies
to enhance the ESG ecosystem
and regulatory regime.

Access to Nutrition Initiative (ATNI)
AllianzGI became a signatory of theAccess to Nutrition Initiative in 2022.
The ATNI focuses on developing tools
and initiatives that track and drive thecontribution made by the food andbeverage sectors to address global
nutrition challenges. We participate
in this collaborative platform to enrich
our research and stewardship activities
and support our investment decisions.
As a signatory, we can access resources
such as research on food security andaffordability, ingredients disclosure andnutrition. We use these to support our
individual engagement frameworks andcollaborative engagement.

05 Appendix

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7

10

Initiatives we joined in 2022
Access to Nutrition Initiative (ATNI)
Hong Kong Green Finance Association (HKGFA)
Working groups we joined within initiatives
Corporate Governance Advisory Council (Initiative: Council of Institutional Investors)
ESG Disclosure and Integration Working Group (Initiative: HKGFA)
Policy Research and Dissemination Working Group (Initiative: HKGFA)
Private Debt Advisory Committee (Initiative: PRI)
“Advance” Stewardship Initiative (Initiative: PRI)
Distribution Committee (Initiative: EFAMA)

Industry consultations and other policy
engagement activities
We responded to consultations fromlocal and regional authorities including
the European Commission, the European
Securities and Markets Authority and the
Financial Conduct Authority in the UK.

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04
Corporate sustainability

Embeddingsustainability
in everything
we do
Our own pathway towards change is characterisedby the same commitment to high standards inour operations and supply chain as we ask of thecompanies in which we invest. We apply scrutiny
and conduct due diligence across our organisationand processes to support the sustainable, longterm growth of our clients’ assets.

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04.1 Strengthening our corporate sustainability strategy
Being a sustainable businessmeans creating long-termvalue without compromising
our impact on people,
planet, or profit. Our holistic
approach considers different
values that AllianzGI can
influence – including natural,
human, social, manufactured
and financial capital.
We aim to reduce our negative impacts
and increase our positive impact acrosseach of these capitals and their sum
by creating sustainable products andservices, evolving our business operations,increasing transparency throughsustainability reporting, and developing
relationships with stakeholders.
Read more about what sustainability
means to us in section 01.1.

We are aware that our activities can haveboth intended as well as unintendedsocial and environmental impacts. It is our
corporate responsibility to be accountableto our stakeholders. We ensure that ourdecisions and activities are guided by thelicense to operate that they grant to us.
Our goal is to shape sustainable pathways
by applying innovation and excellenceacross all our business activities.
Our management and colleagues arecommitted to living up to high ethicalstandards. We take immediate andappropriate action when we fall short ofthese and address areas for improvement
to maintain stakeholders’ trust.
We engage with our local communities
and society through social partnerships,
employee volunteering and charitable
donations. We collaborate with
non-governmental and non-profit
organisations to increase our reach andsolve complex societal challenges. As acorporate citizen this engagement is an
integral part of our responsibility andcontributes to the social value we seek
to enhance.

Principle

1

Our corporate sustainability approach
Corporate Sustainability (CS)
Creates long-term business value without compromising people, planet, or profit.

Core businessactivities,ie, products andservices

Enabling activities,eg, operations,human resources,
communications,
supply chain

Corporate (Social1) Responsibility (C(S)R)
Means being socially accountable to all relevant
stakeholders of the organisation.

Business
conduct

Societal
impactCorporate Citizenship (CC)Consists of community engagement.

Social partnerships

Employee volunteering
Reporting, rating
and regulations

Stakeholders’trust

Charitable giving/donations

1 Social = related to society; the CSR concept is not limited to charitable work; responsibility refers
to social, environment and governance aspects.

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04.1 Strengthening our corporate sustainability strategy

In this chapter, we describe how we are
becoming more sustainable as a company
by evolving our business processes that
directly or indirectly enable our productoffering to customers. We focus onfour main areas: how we empower ourpeople, how we run our business, how wemanage the environmental effects of
our operations and how we contribute tosocietal development.
As the first step in our new corporate
sustainability strategy, we will strengtheninternal foundations across environmental,social and governance dimensions. We arebuilding on a good standard of existing
environmental management across
our operations. We aim to develop our
approach in the social dimension andwill work to increase the social impactof our corporate contributions to the UN
Sustainable Development Goals that mostclosely align with our corporate purpose(as outlined in section 04.5). To strengthen
governance, we will reconfirm the trustof our stakeholders with continuously
enhanced internal control processes andintegrate more sustainability criteria into
our supply chain management.

Building a robust corporate sustainability
function requires clear leadership andclose collaboration with corporate
functions and business units.
In 2022, we established the role of the
Corporate Sustainability Officer (CSO)
to ensure coherence between our
corporate sustainability approach andour sustainable investment strategy.
The CSO will drive a more holistic
approach to corporate sustainability,
shaping its strategy and advising the
Executive Committee and business units.
The business units are responsible for
implementing sustainability-related
business practices with the help of the
CSO and local sustainability leads.
Please see section 01.2 for more
information on our sustainability
governance and how we are
expanding our more holistic
approach to sustainability.

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Our corporate sustainability framework
Createfocused impact
Foster positive societal impact indefined UN Sustainable Development Goals
Build strong foundations
Integrate sustainability practices into organisation

Environmental• Environmental
management in
own operation:eg, carbon footprint,
waste reduction

Social• Attractive employer:eg, diversity, equity
and inclusion, learningand development

Governance• Business conductand operationalrisk management• Good corporate
citizen in society• Sustainablesupply chain

CS function-related areas• Performance management• Communications and marketing• Stakeholder and change management101

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04.1 Strengthening our corporate sustainability strategy

Our corporate sustainability roadmap
Our three-year sustainability roadmap starts withbuilding strong foundations which enable deliveryof our long-term ambitions.

Our long-term corporate sustainability goals (eg, for our
carbon footprint of our operations or women in seniorleadership positions) are described in the following
sections. We will report on our progress annually.

Principle

12023 2024 2025
Prioritising the developmentof the corporate sustainability
function and further
strengthening governance

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Expanding our influenceand impact by forging
external partnerships

Delivering against our long-term
corporate sustainability goals102

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04.2 Creating an inclusive and supportive workplace
We foster a working environment where people, performanceand clients matter. We take a strong stance on diversity, equity
and inclusion, as well as the health and wellbeing of ouremployees. We support them in developing skills and knowledge
that help to shape sustainable pathways and to be resilient andprepared for change.
04.2.1 Living diversity, equity,and inclusion
2022 was a special year as it marked
10 years of conscious commitment toinclusion and diversity at AllianzGI.
We started working specifically toembed respective values into our global
operations in 2012. Our journey began
by defining what inclusion and diversity
means to us and establishing local
working groups to implement the visionacross all regions. Today, we explicitly
also integrate the aspect of equity.
Diversity, equity and inclusion (DEI) is
shaping how we work with and serve
our large and diversified client base.
Due to the fact that we are all defined bymore than just one trait, and to further
consolidate our DEI approach, we view our
DEI challenges through an intersectional
lens. One example was the global online
webinar we organised to mark World

Mental Health Day where more than 200
colleagues joined to discuss the mental
health issues that majority and minority
groups might face at work, and how we
can collectively reduce stigma, support
people during difficult times, and createa safe environment for all.

To mark World Mental HealthDay, more than200

Diversity is the mix of visible andinvisible traits that make each of
us unique, including gender, age,disability, nationality, ethnicity,
sexual orientation, cultural
background, personality types,
and family status.
Equity differs from equality inthat instead of treating everyone
the same regardless of theirneeds, it recognises the different
circumstances of individuals andallocates the resources needed
to reach the exact same goal.
Inclusion is the behaviour wedemonstrate and the processes
we use that enable everyone togive their best. Our culture ofinclusion embraces and values ourdifferences – it helps us feel free
to be who we are.

colleagues joined to discuss
the mental health issues thatmajority and minority groups
might face at work.

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04.2 Creating an inclusive and supportive workplace

Ten years of active commitment

2012

2014

2016

2017

2019

• Creation of regional andlocal I&D Working Groups• First Global I&D Day• Creation of our Flexible
Work Arrangements
Principles and Guidelines• Creation of our Global
I&D Policy• Signature of the United
Nations LGBT Standard of
Conduct for Business and of
Women in Finance Charter• Setting of our 2020
Gender Equality
ambitions• Implementation of
global Financial
Literacy programmes

2020

2022

2022

2022

2022

• Publication of our firstI&D guide on “Fostering
LGBT+ Inclusion”• Roll-out of our new global
anti-discrimination andanti-harassment policy• Publication of our first
brochure on menopause“I’m feeling (really) hot”

• First global webinar
on transgender identity• Publication of our first
dedicated I&D Report• Revamping of our
I&D strategy aroundthree key pillars:
Workplace, Workforce,and Marketplace

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04.2 Creating an inclusive and supportive workplace

Our diversity, equity and inclusion(DEI) strategy
DEI is a company-wide responsibility,and everyone who works at AllianzGI
has a role in creating an inclusive culture
and supporting our commitment to DEI.
Guided by our business strategy, our DEI
strategy is led by the Executive Committee(ExCo) and supported by the Global DEI
Leader, a role that has been in place since
2018. Our strategic approach is activatedby employee working groups across all
our locations.

Our strategy consists of three pillars:

As a generation Y woman building her
career in the finance industry, what is
crucial for me is a meaningful job in
a company that promotes a positive
impact on society. AllianzGI as acompany represents this social positivity
and is vocal about its inclusive culture.”

Maeva Ramadier
CFA – Associate Credit
Portfolio Manager,
Sustainable Thematics

1. Workplace:
How does it feel towork for us?

2. Workforce:Who do we recruitand grow?

3. Marketplace:
How do we serve oursocial purpose?

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Understand the employee experiencethrough a DEI lens, build a safe work
culture and nurture a healthy workplace.

Attract and develop a wide varietyof talent to grow the diversity of ourworkforce at all levels.

Connect the dots with our engagement
in local communities as a good
corporate citizen.

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04.2 Creating an inclusive and supportive workplace

Bringing strategy to life
In line with Allianz Group targets, ourambition is to have at least 30% women insenior leadership positions.2 Since 2020,
our ExCo has been 50% female.
We are proud that in an industry where
women have traditionally been underrepresented, a number of our key
leadership positions are held by women,
including the Global Head of Investments,
Global Chief Investment Officer for
Equities, Global Chief Operating Officer,and Head of Products.
To make a further positive
impact on the gender balance atAllianzGI, we have implemented
a range of systemic measures, forinstance in the areas of recruiting,development and compensation.

Recruitment anddevelopment

Commitment toequal pay

Examples of how we influence gender balance throughrecruitment and development include:

Our compensation principles underscore our commitment
to an inclusive environment and equal pay, and is brought
to life by:• Leveraging a language revision tool to review job posts
for inclusive language.
• Requiring all external search firms to comply with ourdiversity clause.
• Partnering with diversity-focused organisations such as
100 Women in Finance, SEO (Sponsor for Educational
Opportunity), Wiser (an employer branding and earlytalent agency) and ADAN (“Afro Deutsches Akademiker
Netzwerk”, a German network for graduates who are
Afro-German, African and from the African continent) tohelp attract under-represented talent.
• Ensuring a gender balanced presence in executive
development programmes.

• Engaging an external consultant to analyse compensationand identify potential pay gaps using statistical regression
analysis as a standard part of the annual compensation
review process.
• Basing pay decisions on objective reasons and disregarding
protected characteristics.
• Regularly discussing individual compensation at the
local level with managers, along with market referenceswhere available.
• Conducting annual functional reviews to support fairsalary decisions.

• Always including at least one female candidate in
executive succession plans.

2 Senior leadership positions equal ExCo and Managing Director roles.

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04.2 Creating an inclusive and supportive workplace

Women in leadership
Workforce ratio
2022:

58%
male

% female managers3
2022:

32%
2021: 32%

42%
femaleBeyond gender, we monitor dimensions suchas age and nationality to nurture a truly
international and age-balanced workforce.

Nationalities and age% women in seniorleadership positions
2022:

26%

Managing Directors

50%

No. of nationalities
2022:

66

Average age
2022:

43 years
male

2021: 63

43 years
femaleExCo members
2021: male 59% /female 41%2021: 23% / 50%

Looking ahead
In 2023, we plan to strengthen ourcollaboration with business heads
and work on specific DEI functional
action plans to ensure a deeper
integration of DEI in our company
value chain.
Find out more in the 2022 Diversity,
Equity and Inclusion Report.

2021: male 44 years /female 43 years

3 This refers to the first level of leadership where managers have at least one direct report.

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04.2 Creating an inclusive and supportive workplace

04.2.2 Promoting health andwellbeing in a flexible and hybrid
work environment“We care for tomorrow” is our employee
value proposition – a promise that we
make to our current and future employees.
Our aim is to be the preferred inclusive
home for our industry’s best talent.
We strive to provide a caring and inclusive
work environment where employees havethe support they need to succeed.
Creating a flexible work environment
As a global business, we have many
years of experience using technologyenabled virtual collaboration. Our global
framework for flexible work arrangements
has been in place since 2016. With thedevelopment of new tools and equipment
to support digital collaboration and the
deep experience gained over the past
few years, we continue to build on thisframework. Our focus is on empowering
employees with collaborative and flexible
ways of working.

Our framework allows for flexibility inboth time and place, providing room forindividual work set-ups for the benefit ofa thriving culture. Some may agree within
their team to come in on fixed days whileothers choose to split their time between
morning hours in the office and work fromhome in the afternoon. This flexible model
empowers our colleagues to balance
work, career development and personal
priorities in the way that best suits theirindividual work and life situation. In 2022,
the framework for flexible working was
updated to formally include the option for
eligible roles to work from another country
up to 25 days per calendar year.
The results of the Allianz Engagement
Survey (AES) show that flexible work is astrong driver for employee engagementwith an 83% favourable score for thequestion: “Our company offers flexible
work opportunities that meet my current
needs with regard to where and when I
perform my tasks” (+1 percentage pointfrom 2021).

Allianz Global Investors Sustainability and Stewardship Report 2022

Supporting employee healthand wellbeing
The health and wellbeing of our employees
is a top priority. Our holistic approach
incorporates mental, social and physicalwellbeing. We consider the causes of stressand depression through an intersectional
DEI lens to promote good mental healthand offer advice on topics such as
nutrition, sleep and managing worklife balance.
Our efforts to support employee wellbeing
are paying off with a four percentage point
increase to 74% favourable responses
for the AES question: “Our company
sufficiently looks after the wellbeing andhealth of its employees”.

04.2.3 Encouraging lifelong learning
We recognise that learning anddevelopment is a key differentiatorin the financial services industry,
and contributes to long-term businesssuccess. Performance management
and transparent feedback informs
regular development dialogues, andemployees are provided access to global,
regional and local development offers forlifelong continuous learning.

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04.2 Creating an inclusive and supportive workplace

04.2.4 Listening to our employees
The AES is our formal platform forgathering annual employee feedback. It is
supplemented with regular pulse surveys
which help track our progress against
specific commitments.
In 2022, the AES participation rate was
84% (+1 percentage point from 2021).
After a jump of seven percentage points
in the Employee Engagement Index (EEI)
in 2021, we noted a one percentage point
decline on the EEI in 2022.
Our employees recognised efforts tocreate an inclusive culture and a healthy
work environment:• The Inclusive Meritocracy Index (IMIX),
which reflects our ambition to createa culture and working environment
where people and performance matter,reached 78% favourable answers(+1 percentage point from 2021).
• The Work Well Index+ (WWi+),
which measures the stress level of
employees for work-related strain,
improved to reach 70% favourable
answers (+1 percentage pointfrom 2021).

In-depth analysis and open commentaryfrom our employee listening efforts
provide direction to continuously improvethe employee experience at AllianzGI.
Examples of action taken in responseto their feedback in 2022 include thelaunch of a crowd intelligence sourced
Trend & Technology Radar which provides
employees with an opportunity to shape
future focus areas at AllianzGI.

04.2.5 Respecting employee rights
We ensure that the rights of employees
are protected in all entities. In line with
Allianz’s principles, we are committed tocontinuing to respect and implement thefundamental rights and principles at workof the International Labour Organization(ILO) as well as the principles of UN
Global Compact and the OECD Guidelines
for Multinational Companies.

Looking ahead

Additional facts and figures
Training/upskilling

Safety, health and wellbeing

More than

Average sick days per employee

EUR 2.7m
invested in employee
development in 2022

3 days2021: 2 days

2021: EUR 2.1m
Average length of service

22 hoursof training in average per employee

10 yearsmale / female

2021: 11 years

2021: 15

Find out more in the 2022 Diversity, Equity and Inclusion Report.

In 2023 and beyond, we will further
strengthen our zero-tolerance policy
on discrimination and harassment
by continuing to communicate ourprinciples and offering new training
for all managers and employees.

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04.3 Ensuring responsible business conduct
Our license to operate isbuilt on the trust that ourinvestors, employees andother stakeholders place in our
performance and integrity.
A key component is the personal ethicalbehaviour of all our employees worldwide.
Their actions are guided by global policies
and ethical standards, as well as a robust
and mature internal control framework(Three Lines of Defence) that facilitatesand ensures employees manage businessethically and in compliance with internal
procedures and regulatory requirements.

Principles

04.3.1 Three Lines of
Defence framework
Responsibility for ethical business conduct
and risk management is an integral partof our business processes spanning theentire value chain, from client onboarding
and portfolio risk management toensuring personal information is treatedwith utmost care.
Risks are addressed as part of an
overarching reporting and controlling
framework. This covers qualitative andquantitative risks for each function along
three lines of defence. The distinction
between the different lines of defence
is principle-based and determinedby activity:

100%of employees participated in Global Compliance Training.

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1st

2nd

3rd

3

5

The first line of defence is performed by
the respective business functions throughthe management of day-to-day activities.
The business functions are responsible fordesigning and implementing adequate
controls to manage risks and returns related
to activities assigned to them.
The second line of defence provides
independent oversight of employees’
adherence to the company’s regulatory
requirements and internal policies, as wellas the risk-taking and controls conductedby the first line. The second line of defence
is performed by Legal and Complianceand Risk Management, which oversee andadvise the first line of defence.
The third line of defence is performed
by Internal Audit, which independently
assesses the governance and internal
control systems, processes and compliancewith risk principles, performs quality reviewsof risk processes, and tests adherence tobusiness standards, including the internal
control framework.

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04.3.2 Globally harmonised policies
and standards
Globally applicable policies include, but are
not limited to, the AllianzGI Code of Ethics,
Speak-Up policy and policies governing
Anti-Money Laundering, Anti‑Fraud,Anti‑Trust, Anti‑Bribery, Economic
Sanctions, Personal Account Dealing,
Order Execution, Confidential Information/
Insider Information, and Data Privacy.

The Code of Ethics serves as a foundationfor our compliance culture and regulatory
expectations for all AllianzGI employees.
The code and the accompanying supporting
policies have been revised in 2022 toprovide consistent application of our policies
across jurisdictions worldwide, meet the
expectations of various regulators, andreflect industry best practices.

Our clients expect their personal
information to be treated withthe utmost care and we take this
responsibility seriously. Employees must
adhere to confidentiality in relation toclient information and firm activities.
AllianzGI pursues an effective
management and fair handling of thepotential conflicts of interests that may
arise in the course of providing investment
services. We have embedded robust
business policies and processes governing
ethics and client confidentiality. These aredetailed in the AllianzGI Code of Ethics andecho Allianz Group’s overall standards.

Principles

In 2022, all AllianzGI employees
participated in Global ComplianceTraining covering (amongst other areas)
Anti-Money Laundering, Anti-Fraud andEconomic Sanctions.

04.3.4 Managing risks effectively

The Compliance function is responsible for
implementing and maintaining an effective
compliance programme. This includes
compliance risk analyses as well as theannual compliance self-assessment andcontrol plan. Compliance also develops
and administers guidance for employees,
regular compliance training sessions on the
Code of Ethics and Anti-Money Laundering,
and annual and ad-hoc training on
matters related to other company policies
and procedures.

The independent Risk Management
function is responsible for setting up a
firm-wide auditable, documented risk
management system and risk policies
that are consistent with AllianzGI’s
business strategy. We cluster risks
into four risk categories: investment
risk, operational risk, business risk,
and reputational risk. We consider
sustainability risk, concentration risk
and emerging risk as transversal risks
that may be realised in one or more ofthese categories. Our robust processes
and procedures ensure that we effectively
monitor and manage risks withinthese categories.

This involves the monitoring of proxy voting
and investment guidelines, including thoserelated to sustainability matters suchas exclusion lists. AllianzGI Compliancemonitors portfolios for compliance withinvestment guidelines, both pre- andpost‑trade.

Investment risk includes the risk ofchanges in the value of investment
portfolios that may be perceived asinconsistent with the risk profile of therespective portfolio as communicated tothe investor. This includes the risk that thecompany is exposed to market and credit

04.3.3 Ensuring compliance
Employees are required to act inaccordance with these policies at all times,
whether dealing with clients, external third
parties or other Allianz employees.

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3

5

risk in the portfolio via implicit or explicit
performance promises. Investment risk
also includes liquidity risk, which depends
on asset liquidity and flows on the liability
side, as well as constraints imposed byregulators. For investment risk oversight,
the Risk Management function defines
which risk models and analytics are used
to ensure compliance with regulatory
requirements and, for selected topics
or if contractually agreed, that further
independent risk analyses and supervision
is conducted beyond what is requiredby regulation.
Operational risk is defined as the risk ofloss inherent in our internal organisation,
processes and controls resulting frompotential failure to deliver our products
or services in the required time andquality, and in line with all regulations.
Each function is responsible for ensuring
an appropriate control framework to
govern its key processes and mitigate
operational risks. The Risk Management
function has established an integrated
framework to oversee operational risk
management by the business.

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04.3 Ensuring responsible business conduct

Business risk is defined as the risk ofnot being able to reach the financial
objectives in a given competitive market
or regulatory environment. To monitor
business risks, the Risk Management
function uses key risk indicators that coverbusiness and investment performance ofthe management company, among others.
Ad-hoc and regular meetings are held
between the Risk Management function
and stakeholders in other functions to
discuss the current business situation andforward-looking developments.
Reputational risks are defined as risksof activities undertaken within the firm orby employees outside the firm that may
result in unintended material negative
impacts on stakeholder perceptions
that could potentially impact AllianzGI’s
ability to do business. These stakeholders
include clients, investors, the media,
the public, regulators, and employees ofAllianzGI and/or Allianz Group companies.
Prudent management of reputationalrisk is deemed essential in the overallrisk framework.

04.3.5 Fostering security andbusiness resilience
Data privacy and cybersecurity
The Global Data Privacy function ispart of Legal and Compliance andincludes regional Data Privacy Officers
and a Global Data Privacy Officer.
The function informs, advises, and makes
recommendations on compliance withapplicable data privacy laws andregulations, the Allianz Privacy Standard(APS) and other internal and legal
standards as well as guidelines. It works
closely with the respective Information
Security Officers to ensure that adequate
data protection-related technical andorganisational measures are taken.
Strong cybersecurity is essential
for protecting systems, data andcommunications from intended andunintended misuse. Our cybersecurity
programme is fundamental to thesustainability of our business. We focus on
designing, operating and monitoring anappropriate level of preventive, detective
and responsive security controls. This is apriority as increasingly sophisticated attack
methods affect organisations around theAllianz Global Investors Sustainability and Stewardship Report 2022

05 Appendix

Principles

world. At the same time, our digital assets
are evolving and expanding, and we are
implementing new technologies to meetgrowing business demand.
To manage cyber risks, we select bestpractices from leading cybersecurity
frameworks such as the International
Organization for Standardization (ISO) or
the National Institute of Standards andTechnology (NIST). These frameworks set
standards for processes, controls, security
testing and reporting.
Since there can never be 100% protection
against cyberattacks, we also implement
controls and training to ensure effective
recovery from a successful attack to
reduce the potential impact and durationof business disruptions.
Business resilience
Business resilience incorporates business
continuity and disaster recovery and is an
integral part of our service commitment
to our clients. The importance of businessresilience was evident during the Covid-19
pandemic when our Business Resilienceteam constantly monitored the frequent

3

5changes to government requirements
around the world. This coordination
ensured that employees could moveefficiently and safely between remote
working and office locations to support
the firm and its clients.
Our business resilience framework is amulti-tiered risk defence model supported
by input from steering groups, a corporate
resilience organisation and every function
within the firm. The programme is subject
to oversight by Allianz Asset Management(AAM). Annual self-assessments are
submitted to AAM in accordance withgroup requirements, and the programme
is subject to regular audit reviews.
The Business Resilience team is
responsible for managing the programmeand ensuring that all business functions
comply with the framework and policies.
Business recovery plans are establishedfor each major function. This ensures key
business processes can be resumed in theevent of a severe business interruption.
Plans cover the most important risk
scenarios for the loss of employees,
facilities, technology, and thirdparty support.

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04.3 Ensuring responsible business conduct

As part of a continuous improvement
programme, we collect and analyse
feedback to improve the effectivenessof the business resilience framework.
A recent major global crisis management
exercise demonstrated that our Global
Crisis Unit is capable of successfully
managing a ransomware attack andminimising potential damage to thefirm and its clients.

04.3.6 Being transparent about tax
Our ambition is to support the fairness,transparency, and balance of all tax
systems at national and international
levels in dialogue with key stakeholders,
and to transparently communicate ourtax positions.
The taxes we pay are an important partof our contribution to the economic andsustainable development of the countries
in which we operate. Fair, effective,
and stable tax systems are beneficial
for governments, companies, and thewider society.

Our tax strategy is closely aligned to ourbusiness strategy and our sustainability
strategy, and requires full compliancewith tax regulations and tax laws in all
countries in which we operate. Allianz iscommitted to acting transparently andresponsibly in all tax matters and to
working closely with the tax authorities
to ensure we pay our fair share of taxes.
Our processes and internal governanceare implemented in line with our tax
strategy to ensure full compliance in every
jurisdiction where we operate.
See the Allianz Group Tax Transparency
Report 2022 and AllianzGI’s UK tax
strategy for more information.

04.3.7 Strengthening internal controls
We continuously enhance our internal
control framework, processes andprocedures to ensure they remain robustand effective in sustaining clients’,
employees’ and stakeholders’ trust.
Two important enhancements during 2022
were the strengthening of controls aroundclient communication and a number ofenhancements to the independent Risk
Management function (implementationof some of these measures continues
into 2023).

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Responsible communication with clients
AllianzGI has always been committed
to client communications that are fair,
not misleading, accurate and up-todate in all material respects. We strive
to meet the highest standards for client
communications in accordance withregulatory requirements under local laws.
Furthermore, in 2022, we launched agroup-wide project to improve processes
and controls related to the review of all
types of client communication. We havereviewed and strengthened our processes
for client communications where
necessary to ensure information is subject
to rigorous quality, accuracy, consistency
and governance checks before it is shared.
Clarifying roles and responsibilities forclient communication is a key objectiveof this initiative.
As part of the overall enhancements toour client communications review
process, a new and dedicated client
communications policy, together with
online training and a detailed client
communications handbook was publishedat the beginning of 2023.

3

5

Looking ahead
We are enhancing capabilities in
the independent Risk Management
function that apply to all AllianzGI
entities. Examples include:• Building out the function’s systems
infrastructure to enable more
flexible and specific coverage ofinvestment risks.
• Enhanced market risk capabilities
such as stress-testing, risk analytics,
best-practices of modellingcapabilities and review of market
risk models.
• A stronger governance frameworkfor our private markets business,with Risk Management
representation at investmentcommittees and more involvementin the valuation process.
• Refined management reportingthat includes investment riskoriented dashboards and provides
an overview of ex-ante risks, basedon risk statistics for each asset class.

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04.4 Managing the environmental impact of our operations

Our efforts contribute to the operational
environmental goals of Allianz Group,
which include reducing GHG emissions inover 70 markets where the Group has apresence to net zero by 2030, earlier than
2050 as originally targeted, and reducing
GHG emissions per employee by 50%
versus 2019 by 2025.
Read more about the Allianz Group
Climate Change Strategy.
Our environmental management system
For the reporting, monitoring andmanagement of our environmental
performance and footprint, we apply theenvironmental management system (EMS)
of Allianz Group. It guides the monitoringand management of our carbon footprint,
use of energy and natural resources suchas water, and efforts to reduce waste.
The EMS provides all Allianz entities withclear standards and controls, supports
environmental data collection, promotes

transparent reporting of environmental
impacts, and improves environmental
management governance practices.
These practices and processes are oriented
towards ISO14001. Implementation andcompliance with the EMS are monitored
by Allianz Group through the Group
Environmental Officer (part of the Global
Sustainability team) and supported by the
Board of Management of Allianz.
Reducing GHG emissions
In line with the latest climate science,
AllianzGI has decided to advance its
climate targets based on the science
underpinning the Paris Agreement climate
goal. We are committed to reducing
our GHG emissions per employee by
52% by 2025 (against a 2019 baseline),further elevating our previous target ofdecreasing GHG emissions per employee
by 38%.
Our carbon reduction strategy focuses on
reducing GHG emissions from material
sources across Scope 1, Scope 2, andselected parts of Scope 3 (with a focus on
business travel and energy consumption),against a 2019 baseline. To reflect
infrastructure changes as our way ofworking continues to evolve, we now

Allianz Global Investors Sustainability and Stewardship Report 2022

include GHG emissions from flexible
working as well as certain cloud-based
systems in our footprint.
Our strategy focuses on a variety of
initiatives including energy-efficientplanning, construction and operationof buildings, sourcing green electricity,using carbon-efficient means of transport,
as well as reducing air travel. We achieved
a 59% reduction in GHG emissions per

employee in 2022 against the 2019 baseline(2021: 77%).
The decrease against the 2019 baseline
is a result of progressive efforts andinvestments in the efficiency of ouroperations and improved energy
management in a time of post-pandemic
return to offices. Changes in our businessstructure also led to the ceasing of ourbusiness activity in the US market.

GHG emissions – breakdown by source and proportions in tons (t) of CO2
equivalents per employee
3.8

1.8

t CO2e/employee

We strive to be a role modelin achieving our own targets
on climate change andenvironmental impact
alongside the targets we set
for our investments.

0.03

2.0
1.6

2.1

1.5

0.9
0.5
0.01
0.4

0.02
0.5

2019
baseline
Travel

Paper

2020

2021

0.7
0.01

GHG target
by 2025:
1.8 t CO2e
per employee

0.8

2022

Energy (total)

Target: -52% reduction by 2025 (against 2019 baseline).
Actual: -59% reduction 2019–2022.

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04.4 Managing the environmental impact of our operations

Reducing energy consumption
Our 2025 target is to reduce energy
consumption in our office buildings by
9% per employee against a 2019 baseline.
Our energy consumption goal wasamended (previously -10%) due to an
adjustment of the calculation methodology
by Allianz Group, resulting in a higher
baseline and absolute targets for energy
consumption.4 In 2022, we achieved a 13%
decrease per employee in our internalenergy consumption from office buildings(2021: 25%).
Apart from the major effects of officeclosures in the US, decreases in energy
consumption across the offices wereachieved through the continued sourcingof renewable electricity globally andinvestments in the efficiency of ouroperations. The latter involves improved
energy management, including centralised
regulation of heating and cooling,decreased use of air conditioning postpandemic, as well as refurbishments andoffice moves to more sustainable buildings.

Energy consumption from oﬃce buildings in gigajoules (GJ) per employee4, 5
19.2
17.0

16.6
14.4

GJ/employee

The reduced workforce and office closuresbrought about a decline in emissions
and resource consumption. Global travel
restrictions until mid-2022 and strict travel
policies also prevented a surge above thetarget in business travel emissions in 2022.
As outlined in the next sections, we have
put further initiatives in place to prevent a
future rise in emissions, and developmentsof GHG emission will be closely monitored
in 2023.

Energyconsumption
target by 2025:
17.5 GJ per
employee

Looking ahead
The expansion of our energy
saving initiatives with a focus on
rethinking ways of working, use of
office spaces and investment in moresustainable IT and energy-efficientequipment will facilitate
a long-term decrease in our energy
consumption in 2023 and beyond.
Energy accounts for 46% of AllianzGI’s
total GHG emissions in 2022. 82% of
all our energy-related emissions are
generated through our office buildings.
Where heating and cooling is not
powered by renewable electricity,
we are working to introduce moresustainable energy solutions.

2019baseline

2020

2021

2022

Target: -9% reduction by 2025 (against 2019 baseline).
Actual: -13% reduction 2019–2022.

100%
Since 2021,of the electricity used in offices and local
data centres comes from renewable sources.

4 The adjustment of the energy consumption calculation methodology led to a restatement of the energy baseline for 2019, and the actual numbers for 2020 and 2021. The energy
used by local data centres is now excluded from our energy consumption target per employee. Emissions associated with energy consumed by local data centres are integrated in
our total GHG footprint along with emissions caused by flexible and hybrid working arrangements and selected cloud-based systems.
5 All office buildings procure 100% renewable electricity.

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04.4 Managing the environmental impact of our operations

Increasing use of renewable electricity
As a signatory of the RE100 initiative, andin line with the specific ambitions of thisinitiative, Allianz Group has committed
to source 100% renewable electricity (RE)for its group-wide operations by 2023.
Since 2021, AllianzGI is RE100 compliant.
Since 2021, 100% of the electricity usedby AllianzGI in its offices and local data
centres has come from renewable sources.
This was achieved through agreementswith suppliers on ”green tariffs” andthe continuous sourcing of unbundled
Energy Attribute Certificates (EACs)6 forrenewable electricity.

Reducing emissions from business travel
Business travel accounted for 53% of
GHG emissions from our operations in
2022 (2021: 40%). By the end of 2022,
emissions associated with travel had
increased to 0.8 tonnes per employee(2021: 0.4 tonnes). Overall, we achieved
a 60% reduction of travel emissions per
employee against our baseline emissions
in 2019.

The purchase of credible unbundled EACs
plays an important role in delivering
temporary solutions to meet our goals inthe short- to medium-term, especially incountries where renewable power cannot
yet be readily sourced through green
tariffs. This is a temporary solution while
the markets transition to meet demandwith real-world solutions.

Our new Global Travel Policy prioritises
client-facing business travel over travel forinternal reasons. Combined with cloudbased working and Covid-19-related
travel restrictions until mid-year 2022,
this played a material role in preventing
a surge in business travel activities andemissions back to 2019 baseline levels.
We are also supporting employees tocommute to work via low carbon means oftravelling. In 2022, 84% of our headcountworldwide had access to offices with agreen commuting plan and infrastructure
in place to support it.

Looking ahead
With business travel being our highest
source of emissions, we have raised
our target to a 41% reduction of
GHG per employee from businesstravel activities by 2025 against
the 2019 baseline (previously 20%).
Our ambitious target, investment inmore sustainable ways of travelling
and the continued enforcement of the
Global Travel Policy will contribute tokeeping our footprint small.

Evolving our carbon reporting
Our current emissions arise primarily
from business travel (2022: 53%)and energy consumption (2022: 46%)across Scope 1 and 2, with selectedparts of Scope 3. Capturing the fullscope of the impact of our operations,particularly by looking at theemissions along the entire value
chain of the company, will beequally important.
We have started by capturing
the footprint arising from flexible
working and some cloud-based
systems and will gradually extend
our measurement of emissions to
upstream and downstream activities
that we identify as material.
Additionally, our growth across themarkets and offices in the APAC
region will be reflected in the scopeof our future reporting to ensure
global performance and progress is
captured, tracked and enhanced.

6 EACs are an instrument to document and track the production, distribution, and consumption ofrenewable energy. EACs do not represent the electricity itself (as they are unbundled from theproduction) but allow us to prove that the energy we use is directly attached to electricity produced at a
specific renewable energy site which can be identified.

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04.4 Managing the environmental impact of our operations

Reducing paper use
By the end of 2022, AllianzGI had
achieved a reduction of 74% in paper used
per employee against a 2019 baseline(2021: 68%). So far, we have exceeded the
reduction target set at 20% by 2025.
Paper consumption represents less than
1% of our global carbon footprint fromoperations. We use paper mainly forexternal communications with clients,
with a smaller amount used for internal

office printing. Our ongoing efforts include
sourcing sustainably certified paper forinternal and external use (2022: 66%) andreducing paper consumption. The latter isunderpinned by increasing digitalisation,
including of subscriptions, and paperlessoffice concepts such as the closing ofcorporate print centres.
Reducing water use
Minimising our water consumption isa key principle of the Allianz Group
Environmental Guideline. For office-based

operations, we concentrate on using water
efficiently and considering the impacts ofclimate change. We have committed toreduce water use in AllianzGI offices per
employee by 15% by 2025 against a 2019baseline. By the end of 2022, we achieved
a 56% reduction (2021: 4%).
During 2022, the scope of our reporting
was adapted for operational reasons.
Considering this, the actual water
reduction achieved across all entities is

35.4
Paper
consumption
target by 2025:
22kg peremployee

19.4

9.4

2020

2021

7.0

2022

Target: -20% reduction by 2025 (against 2019 baseline).
Actual: -74% reduction 2019–2022.

Allianz Global Investors Sustainability and Stewardship Report 2022

m3/employee

27.4

kg/employee

The reductions we have achieved are
the result of reduced operation of airconditioning systems post-pandemic
and the impact of office closures,space reductions and moves to moresustainable buildings. We have invested inwater-saving solutions in our facilities andkitchens and adapted cleaning measuresacross our canteens.

Water consumption in cubic metre (m3) per employee

Paper consumption in kilograms (kg) per employee

2019baselineestimated to be still below the target -15%
by 2025 against our 2019 baseline.

26.0

24.9

11.4

2019
baseline

2020

2021

Water
consumption
target by 2025:
22m3 peremployee

2022

Target: -15% reduction by 2025 (against 2019 baseline).
Actual: -56% reduction 2019–2022.

117

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02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

04.4 Managing the environmental impact of our operations

Driving down waste
We aim to minimise waste and reuse andrecycle materials. Our operations mostly
generate household-type waste, and ourtarget is to drive down waste by 14% by2025 against a 2019 baseline.
By the end of 2022, we achieved a 45%
reduction per employee against the 2019baseline (2021: 49%). This was driven byinitiatives focused on waste centralisationand separation, increased use ofrecyclable packaging, avoidance of plastic
and reduced paper consumption.
We adopted the global Allianz Group bestpractices for removing single-use plastic fromour operations across all our offices. 87% of
our headcount is in an office with a dedicatedplan to sustainably eliminate the presenceof single-use plastic. These initiatives include
reusable takeaway boxes in our canteensand providing only reusable, refillable, or
recyclable supplies in kitchens.

Waste output in kilograms (kg) per employee

kg/employee

149.0

89.7
75.3

2019
baseline

2020

2021

82.3

2022

Target: -14% reduction by 2025 (against 2019 baseline).
Actual: -45% reduction 2019–2022.

Allianz Global Investors Sustainability and Stewardship Report 2022

Waste output
target by 2025:
128kg peremployeePrinciple

Going forward, we will continue driving
the global roll-out of these initiatives andwork with colleagues to encourage waste
reduction behaviours.
Managing sustainable procurement
Our commercial relationships with
suppliers and partners around the globe
enable us to encourage the adoption of
innovative sustainable business practices,and to adopt them ourselves.
One role of our procurement team is toconsolidate the supply base towards
preferred suppliers that meet our businessand compliance requirements as wellas our expectations with respect tosustainability standards. The AllianzGI
Global Procurement Policy has been
updated to harmonise and align with theAllianz Group Vendor Code of Conduct.
We are also enhancing procurement
processes to ensure sustainability is
considered throughout each phase of
the procurement lifecycle. We expect our
suppliers to embed sound sustainability
practices within their organisation and topromote similar practices within their own
supply chain. We do this by embedding
requirements into sourcing projects andwhen onboarding suppliers into our systems.

8

Looking ahead
We plan to include additional
environmental, social, andgovernance-related clauses into
our contracts with suppliers.
Procurement will continue to combine
tools and data to further equip
AllianzGI with meaningful insights on
the supply base to be able to steer
it in the direction of our corporate
sustainability strategy.

We expect our
suppliers to embedsound sustainability
practices within
their organisations.

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02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

04.5 Driving our corporate citizenship
While the acute impacts of
Covid-19 have receded, many
communities are grapplingwith the rising cost of living
and the impacts of climatechange. It is important for us tocontinue our work for positivesocial impact and contributeto the achievement of the UN
Sustainable Development
Goals (SDGs).
Our approach to corporate citizenship
Our ambition is defined by our businessstrategy and brought to life throughour employees and the local efforts ofour global entities. Our longstanding
commitment to shaping a more resilient
society continues to motivate our corporate
citizenship efforts in our offices aroundthe world.
Our activities prioritise SDG 8, Decent
Work and Economic Growth, which aims
to “promote sustained, inclusive, andsustainable economic growth, full andproductive employment, and decent
work for all.” Our actions to deliver

SDG 8 are also closely linked with
SDG 13, Climate Action and SDG 17,
Partnerships for the Goals. In line with
the Allianz Group corporate citizenshipstrategy, future generations are a key
focus of our approach.
Our corporate volunteeringand donations
In 2022, over 700 corporate volunteering
hours were recorded within AllianzGI,
with colleagues around the globe
engaged in actively supporting numerous
local community initiatives aimed atcreating positive long-term impact.
We continued with our tradition of end-ofyear donations across the globe to causesthat are important to our employees.
Our donations of around EUR 620,000
in 2022 focused on supporting local
communities to deal with the rising costof living, promoting financial literacy andeducation among the next generations,
supporting child safety and basic
needs, and protecting the environment.
Beneficiaries included UNICEF for their
Humanitarian Action for Children appeal
and food banks in Frankfurt, Hong Kong,
London, Munich and Singapore.

Allianz Global Investors Sustainability and Stewardship Report 2022

At present, there are more children inneed of humanitarian assistance thanat any other time since the Second
World War. Across the globe, they arefacing a confluence of crises – fromviolence and displacement to infectious
disease outbreaks, soaring rates ofmalnutrition and growing up in extreme
poverty. Meanwhile, climate change
is compounding the severity of thesecrises and unleashing new ones. But thesituation is not hopeless. Together withsupporters like AllianzGI we have risen
to the challenge. From Afghanistan toSomalia, from the Sahel to Yemen –UNICEF is on the ground in countries
around the world, providing children
with lifesaving assistance during
humanitarian emergencies. Our work
continues – thank you very much foryour support!”
Christian Schneider,
CEO of UNICEF Germany

Promoting financial literacy andeducation for next generations
Our aim is to support future generations
to overcome the economic and social
impacts of the pandemic and othersystematic social risks. Examples include:• In collaboration with IW Junior in
Germany, 15 AllianzGI employees
provided financial literacy education
for students nationwide throughonline training and school class visits.
More than 300 corporate volunteering
hours were contributed by our Frankfurt
office in 2022.
• Also in Germany, our long-standing
collaboration with “BVI Hoch im Kurs”
is educating young people on topics
such as “the financial crisis and its
implications” and “How to save money
efficiently” since 2008.
• In Taiwan, our employees worked with
Help Rainbow Family Life Education
Association since 2020 to organise andcreate financial education courses.
A total of 546 students took part in thecourses in 2022.

© UNICEF/UN0606725/Etges

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02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

04.5 Driving our corporate citizenshipSupporting vulnerable communities
We support communities where we live
and work, especially in times of need.
We leverage our expertise, resources andassets to align with local priorities andmaximise our impact. Examples include:• In the UK, we partner with
St Luke’s Community Centre throughinitiatives like the Job Club – whichhelps unemployed people find jobs,
volunteering roles and training – andSteps to Success, a job inspiration
day for local primary schools.
AllianzGI employees contributed
over 65 hours of their time to join the
Telephone Befriending scheme which
supports residents who need a listeneror guidance for further help.
• Our Taiwan office has supported
the Christmas Shoebox project since2008. In 2022, the office raised nearly
EUR 20,000 and provided 20 young
children, over 750 school students and217 senior people with the essentials forschooling and learning and the basic
needs in their daily life.

Protecting local environments
World Cleanup Day is a global movement
which unites 191 countries for a cleaner
planet through local waste and littercollection efforts. Allianz entities aroundthe world take part and we encourage
employees, customers, agents andpartners to join this global concerted
effort for our planet. In 2022, the day
took place in September and ouractivities included:

AllianzGI colleagues supporting the World Cleanup Day.

• In Italy, over 30kg of waste wascollected at the mouth of the Sturlariver by a team of AllianzGI employees
from our Milan office, Allianz Tradein Italy and Allianz Partners Italy andother volunteers from Legambiente
and AzzeroCO2.
• In Indonesia, our Jakarta team met on
a Sunday and collected 16kg of waste.
An educational booth was also set up to
bring more awareness to the topic.
• Our Taiwan office teamed up with social
enterprises and non-profits to launch a
Green Tour project, where they planted
trees and cleaned up the beach in thearea, collecting over 86kg of waste.

130kg
AllianzGI colleagues helped to collect overof waste in Italy, Indonesia
and Taiwan.

Allianz Global Investors Sustainability and Stewardship Report 2022

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02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

04.5 Driving our corporate citizenshipSupporting innovation among
future generations
AllianzGI is committed to engaging with
communities to exchange ideas andsolutions that address the multifaceted
challenges of a sustainable future.
To encourage the next generation,
we have entered a three-year partnershipwith the International Green Gown
Awards. These are administered by EAUC
– the Alliance for Sustainability Leadershipin Education – and supported by the UN
Environment Programme to recognise
exceptional sustainability initiatives
being undertaken by universities andcolleges across the globe. In the first yearof partnership, AllianzGI was part of the
judging panel to exchange suggestions
and feedback between the academic andcorporate worlds.
Read more about the International
Green Gown Awards here.

3,400
Over

We need to inspire and empower our
young people to visualise a better future,and to do all that we can to ensure every
career becomes a sustainable career.
We need to turn feelings of anger andanxiety into hope and action. This is a
decisive decade for our very own future.
In our partnership with AllianzGI weshow that education plays a crucial role
for a just and fair transition towards amore sustainable world.”
Fiona Goodwin,
Deputy CEO at EAUC
and Green Gown
Awards Secretariat

artworks submitted by more than 2,300
illustrators from over 100 locations.

Engaging the community through art
AllianzGI sponsors illustrators across theglobe to create artworks relating to climatechange to provide a platform for theexchange of ideas and inspire meaningfulchange. The Art on Climate International
Illustration Competition was launched in
2019. Over 3,400 artworks were submitted
by more than 2,300 illustrators from over
100 locations in 2022. The top 53 artworks
were featured in a 3D virtual exhibition
and the winner chose Earthwatch Europe
to receive a donation from AllianzGI of
EUR 10,000 to support the Teach Earth
In The Field project. Through this project,teachers are empowered to support thenext generation to understand the effects
of climate change and inspire action.
See more on Art on Climate.

Looking ahead
Many of our activities have beensuccessfully led by our local charity
groups and employees across thefirm to date. To ensure we continue
to make meaningful social impact,
we are taking steps to evolve ourcorporate citizenship approach
to further drive co-ordinatedengagement and activity acrossAllianzGI by utilising our global
structure to support such locally led
efforts. A refreshed, global corporate
citizenship programme will be rolled
out at AllianzGI in 2023 and we will
provide further details on this in next
year’s report.

Read more about Earthwatch Europe.

Allianz Global Investors Sustainability and Stewardship Report 2022

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02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

05
Appendix

Supporting
information

Allianz Global Investors Sustainability and Stewardship Report 2022

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01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

05.1 UK Stewardship Code index
This report should be read in its entirety to obtain a comprehensive picture of our stewardship activities during 2022. The table below provides links to the specific sections within thisreport that demonstrate how Allianz Global Investors (AllianzGI) applies the principles of the 2020 UK Stewardship Code.
2020 United Kingdom Stewardship Code Principle

Section1

Signatories’ purpose, investment beliefs, strategy, and culture enable stewardship thatcreates long-term value for clients and beneficiaries leading to sustainable benefits forthe economy, the environment and society.

2Signatories’ governance, resources and incentives support stewardship.

3

Signatories manage conflicts of interest to put the best interests of clients andbeneficiaries first.

4

Signatories identify and respond to market-wide and systemic risks to promote awell‑functioning financial system.

5

Signatories review their policies, assure their processes and assess the effectiveness of
their activities.

Leadership insights on our journey
About Allianz Global Investors
Evolving our strategic approach
Strengthening sustainability governance
Evolving our approach to sustainable investing
Strengthening our corporate sustainability strategy
Strengthening sustainability governance
Linking sustainability with remuneration
Investing in our teamAllianzGI Sustainability Insights Engine (SusIE)
How we engage
Ensuring a robust voting process
Transparently managing conflicts of interest
Ensuring responsible business conduct
Our approach to sustainable investing
Focusing on the material sustainability themes of today and tomorrow
How active asset management supports the transition to a better future
Sustainability methodologies and analytics
Climate-related risks and opportunities
Sustainability risk management
ESG risk-focused
Industry engagement and commitments & Sustainability initiatives overview
Robust review and assurance
Strengthening voting policy and process
Ensuring responsible business conduct

Allianz Global Investors Sustainability and Stewardship Report 2022

Page
06 – 08
09 – 11
12 – 17
18 – 22
32 – 33
100 – 102
18 – 20
21
21 – 22
41 – 4264 – 6587
95 – 96
110 – 113
14 – 1616
17
39 – 42
43 – 4445
46, 4997 – 98; 132 – 139
22
88
110 – 113123

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

05.1 UK Stewardship Code index

2020 United Kingdom Stewardship Code Principle
6

7

8

9

10
11
12

Signatories take account of client and beneficiary needs and communicate the activities
and outcomes of their stewardship and investment to them.

Section

Provide excellent client service
How active asset management supports the transition to a better future
Guiding clients on sustainable investment solutions
Signatories systematically integrate stewardship and investment, including material
Sustainability research
environmental, social and governance issues, and climate change, to fulfil their responsibilities. Sustainability risk management
Sustainable investing categories
Active stewardship
Signatories monitor and hold to account managers and/or service providers.
How we select and monitor data providers
Selecting and engaging with fund managers
Ensuring a robust voting process
Managing sustainable procurement
Signatories engage with issuers to maintain or enhance the value of assets.
What sustainability means to us
Developing our engagement strategy
How we engage
AllianzGI’s engagement in numbers
Engagement outcomes
Signatories, where necessary, participate in collaborative engagement to influence issuers.
Collaborative engagements
Industry engagement and commitments & Sustainability initiatives overview
Signatories, where necessary, escalate stewardship activities to influence issuers.
Escalating engagement concerns
Exercising our voting rights
Signatories actively exercise their rights and responsibilities.
Exercising our voting rights
Exercising our rights and responsibilities beyond equities

Allianz Global Investors Sustainability and Stewardship Report 2022

Page
10
17
23 – 30
34 – 3845
46 – 60
61 – 98
39
68
87
118
13 – 1662 – 63
64 – 68
69 – 71
72 – 81
82 – 83
97 – 98; 132 – 139
84 – 85
86 – 94
86 – 9493124

01 Our sustainability approach

02 Sustainable investing

03 Active stewardship05.2 Engagements

05 Appendix

Key
E Environmental

Company

04 Corporate sustainability

E

S

G

ABB Ltd
AbCellera Biologics Inc
Activision Blizzard Inc
ADEKA Corp
adidas AG
Advanced Energy Solution Holding Co Ltd
Advanced Micro-Fabrication Equipment Inc China
Air Liquide SA
Akamai Technologies Inc
Alcoa Corp
Alibaba Group Holding Ltd
Alpha Services and Holdings SA
Aluminum Corp of China Ltd
Amazon.com Inc
America Movil SAB de CV
American Airlines Group Inc
ANA Holdings Inc
Angel Yeast Co Ltd
Anheuser-Busch InBev SA/NV
Anhui Conch Cement Co Ltd
Anjoy Foods Group Co Ltd
ANTA Sports Products Ltd
APERAM SA
Applied Materials Inc
ArcelorMittal SA
Archer-Daniels-Midland Co
Arkema SA
Asahi Intecc Co LtdCOS Social

G Governance

CompanyCC limate engagement

E

O Other engagements1

S

G

C

O

Asia Vital Components Co Ltd
ASML Holding NV
Assa Abloy AB
Assicurazioni Generali SpA
AT&T Inc
Atlas Copco AB
Aurubis AG
Auto Trader Group PLC
Avantor Inc
AXA SA
Ball Corp
Baltic Classifieds Group PLC
Banco Bilbao Vizcaya Argentaria SA
Banco Santander SA
Barclays PLC
Bayer AG
Befesa SA
BHP Group Ltd
BioGaia AB
BOC Hong Kong Holdings Ltd
Boliden AB
Bombardier Inc
BP PLC
Brenntag SE
British American Tobacco PLC
Broadcom Inc
BT Group PLC
CANCOM SE

1 Other engagements include engagements on strategy, risk management, transparency etc.

Allianz Global Investors Sustainability and Stewardship Report 2022

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02 Sustainable investing

03 Active stewardship05.2 Engagements

05 Appendix

Key
E Environmental

Company

04 Corporate sustainability

E

S

G

Carrefour SA
Cathay Financial Holding Co Ltd
Chengdu XGimi Technology Co Ltd
Chevron Corp
China Construction Bank Corp
China Hongqiao Group Ltd
China Mengniu Dairy Co Ltd
China Merchants Bank Co Ltd
China National Building Material Co Ltd
China Pacific Insurance Group Co Ltd
China Petroleum & Chemical Corp
China Railway Group Ltd
China Resources Cement Holdings Ltd
China State Construction Engineering Corp Ltd
China Tourism Group Duty Free Corp Ltd
Chubu Electric Power Co Inc
Cie de Saint-Gobain
Cie Generale des Etablissements Michelin SCA
Cloudflare Inc
CMOC Group Ltd
CNOOC Ltd
Coca-Cola HBC AG
Commerzbank AG
Concentric AB
COSCO SHIPPING Holdings Co Ltd
Coty Inc
CRH PLCCTBC Financial Holding Co LtdCOS Social

Company

G GovernanceCC limate engagement

E

O Other engagements1

S

G

C

O

CTT Systems AB
Daikin Industries Ltd
Danone SA
Deere & Co
Deutsche Boerse AG
Deutsche Post AG
Deutsche Telekom AG
DFS Furniture PLC
Diploma PLC
Doximity Inc
DR Horton Inc
Drax Group PLC
DSV A/S
Duke Royalty Ltd
Ecolab Inc
Edenred
Eli Lilly & Co
eMemory Technology Inc
Empresaria Group PLC
Enel SpAEngie SAEpiroc AB
Equinor ASA
Equitrans Midstream CorpeRex Co Ltd
Evotec SE
EXOR NV
Exxon Mobil Corp

1 Other engagements include engagements on strategy, risk management, transparency etc.

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02 Sustainable investing

03 Active stewardship05.2 Engagements

F5 IncFielmann AG
First Quantum Minerals Ltd
Fiverr International Ltd
FLEXium Interconnect Inc
Ford Motor Co
Formosa Plastics Corp
Fortum Oyj
Freenet AG
Fresenius SE & Co KGaA
Fuji Electric Co Ltd
Fujikura Ltd
Fuyo General Lease Co Ltd
Ganfeng Lithium Group Co Ltd
Geberit AG
Georg Fischer AG
Glencore PLC
Globalwafers Co Ltd
Goldman Sachs Group Inc/The
Grafton Group PLC
Granges AB
Gree Electric Appliances Inc of Zhuhai
Grifols SA
GSK PLC
Han’s Laser Technology Industry Group Co Ltd
Harland & Wolff Group Holdings
HCA Healthcare Inc
HeidelbergCement AG

05 Appendix

Key
E Environmental

Company

04 Corporate sustainability

E

S

G

1

C

O

S Social

G Governance

CompanyCC limate engagement

E

O Other engagements1

S

G

C

O

Heineken NV
Henan Liliang Diamond Co Ltd
Hengli Petrochemical Co Ltd
Hexagon AB
Hexpol AB
HIS Co Ltd
Hitachi Ltd
Holcim AG
HomeServe PLC
Horizon Therapeutics Plc
Hornbach Holding AG & Co KGaA
Howden Joinery Group PLC
HSBC Holdings PLC
Huntsman Corp
Iberdrola SA
IG Group Holdings PLC
Imperial Brands PLC
Industria de Diseno Textil SA
INEOS Ltd
Inner Mongolia Yili Industrial Group Co Ltd
Inpex Corp
Intel Corp
Intermediate Capital Group PLC
Interroll Holding AG
Intertek Group PLC
Isuzu Motors Ltd
J Sainsbury PLC
JCR Pharmaceuticals Co Ltd

1 Other engagements include engagements on strategy, risk management, transparency etc.

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02 Sustainable investing

03 Active stewardship05.2 Engagements

05 Appendix

Key
E Environmental

Company

04 Corporate sustainability

E

S

G

JD.com Inc
Jenoptik AG
Jiangsu Dingsheng New Energy Materials Co Ltd
Jiangsu Eastern Shenghong Co Ltd
Jinko Solar Co Ltd
JOST Werke AG
JPMorgan Chase & Co
K+S AG
Kakaku.com Inc
Kering SA
Kerry Group PLC
Keywords Studios PLC
Kingspan Group PLC
KNOW IT AB
KnowBe4 Inc
Kohoku Kogyo Co Ltd
Kokuyo Co Ltd
Korian SA
KT Corp
KWS Saat SE & Co KGaA
Lam Research Corp
LANXESS AG
LEG Immobilien SE
Legrand SA
Li Ning Co Ltd
Linde PLC
Lloyds Banking Group PLC
L’Oreal SACOS Social

G GovernanceCC limate engagement

CompanyE

O Other engagements1

S

G

C

O

LVMH Moet Hennessy Louis Vuitton SE
LyondellBasell Industries NV
Makalot Industrial Co Ltd
McKesson Corp
Medios AG
Melrose Industries PLC
Mercedes-Benz Group AG
Merck KGaA
Micron Technology Inc
Mitsubishi Corp
Modern Times Group MTG AB
Moneysupermarket.com Group PLC
Montage Technology Co Ltd
Moonpig Group PLC
Morgan Stanley
MTU Aero Engines AG
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen
Muyuan Foods Co Ltd
Nabors Industries Ltd
Nasdaq Inc
NatWest Group PLC
NEC Corp
Neste Oyj
Nestle SA
NH Hotel Group SA
Nine Dragons Paper Holdings Ltd
NIO Inc
Nippon Telegraph & Telephone Corp

1 Other engagements include engagements on strategy, risk management, transparency etc.

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02 Sustainable investing

03 Active stewardship05.2 Engagements

05 Appendix

Key
E Environmental

Company

04 Corporate sustainability

E

S

G

Nippon Yusen KK
Nissin Foods Holdings Co Ltd
Norma Group SE
Norsk Hydro ASA
Nutrien Ltd
OCI NV
Okta IncOMV AGOMV Petrom SA
ON Semiconductor Corp
Oracle Corp
Orange SA
Orsted AS
Ovintiv Inc
Owens Corning
Palace Capital PLC
Panasonic Holdings Corp
Paradigm Biopharmaceuticals Ltd
Partners Group Holding AG
Paycom Software Inc
PBF Energy Inc
Pennon Group PLC
Persimmon PLC
Petroleo Brasileiro SA
Ping An Insurance Group Co of China Ltd
Plug Power Inc
Powszechny Zaklad Ubezpieczen SA
Proya Cosmetics Co LtdCOS Social

G Governance

CompanyCC limate engagement

E

O Other engagements1

S

G

C

O

Qantas Airways Ltd
Reckitt Benckiser Group PLC
Renault SA
Repsol SA
Rio Tinto PLC
RLJ Lodging Trust
ROBLOX Corp
Rotork PLC
Ryanair Holdings PLC
Safran SA
SAIC Motor Corp Ltd
Samsung Electronics Co Ltd
Sankyu Inc
Sanyo Special Steel Co Ltd
SAP SE
Satellite Chemical Co Ltd
Schneider Electric SE
SCOR SE
Scout24 SE
SF Holding Co Ltd
Shanghai Milkground Food Tech Co Ltd
Shell PLC
Shenzhen Dynanonic Co Ltd
Shibaura Machine Co Ltd
Shimamura Co Ltd
Shin Nippon Biomedical Laboratories Ltd
Shop Apotheke Europe NV
Siemens AG

1 Other engagements include engagements on strategy, risk management, transparency etc.

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02 Sustainable investing

03 Active stewardship05.2 Engagements

05 Appendix

Key
E Environmental

Company

04 Corporate sustainability

E

S

G

Signify NV
Sika AGSK Hynix Inc
Societe Generale SA
SOITEC
Sojitz Corp
Sompo Holdings Inc
Sony Group Corp
Spirax-Sarco Engineering PLC
SSE PLCSt James’s Place PLC
SThree PLC
Stora Enso Oyj
Stroeer SE & Co KGaA
Suez Group
Sumitomo Mitsui Financial Group Inc
Suzuki Motor Corp
Symrise AG
Taiheiyo Cement Corp
Taiwan Mask Corp
Taiyo Yuden Co Ltd
Targa Resources Corp
Tate & Lyle PLC
TechMatrix Corp
Telefonica Deutschland Holding AG
Teleperformance
Temenos AG
TEN Entertainment Group PLC

CO

S Social

Company

G GovernanceCC limate engagement

E

O Other engagements1

S

G

C

O

Tencent Holdings Ltd
TerraForm Power Inc
Tess Holdings Co Ltd
Tetra Tech Inc
Thule Group AB
thyssenkrupp AG
Tobii ABTokyo Gas Co Ltd
Tokyu Fudosan Holdings Corp
TotalEnergies SE
Toyota Motor Corp
Trelleborg AB
Trip.com Group Ltd
TUI AGUBS Group AG
UniCredit SpA
Unilever PLC
Unimicron Technology Corp
United Airlines Holdings Inc
United Internet AG
UPM-Kymmene Oyj
Veolia Environnement SA
Verallia SA
Verisure Holding AB
Vinci SA
Visa Inc
Viscofan SA
Volkswagen AG

1 Other engagements include engagements on strategy, risk management, transparency etc.

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02 Sustainable investing

03 Active stewardship05.2 Engagements

05 Appendix

Key
E Environmental

Company

04 Corporate sustainability

E

S

G

Volvo AB
Vonovia SE
Wienerberger AG
Wingtech Technology Co Ltd
Wintershall Dea GmbH
Wizz Air Holdings Plc
Worldline SA/France
WuXi AppTec Co Ltd
Wuxi Lead Intelligent Equipment Co Ltd
Yageo Corp
Yakult Honsha Co Ltd
Yantai Jereh Oilfield Services Group Co Ltd
Yonyou Network Technology Co Ltd
Yum China Holdings Inc
Yunnan Energy New Material Co Ltd
Zalando SE
Zijin Mining Group Co Ltd
Zoetis IncCOS Social

G GovernanceCC limate engagement

O Other engagements1

Source: AllianzGI, as of 31 December 2022. The lists above exhibit the companies which AllianzGI
engaged in dialogue in 2022. The above information is used for the purpose to demonstrate AllianzGI’s
ESG engagement activities, it is not a recommendation or investment advice to buy or sell any particular
securities and should not be considered investment advice/recommendation. Past performance is no
guarantee of future results. There is no assurance that any companies/securities discussed are/will be held
in any fund/portfolio at managed by AllianzGI.

1 Other engagements include engagements on strategy, risk management, transparency etc.

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02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

05.3 Sustainability initiatives overview

Principles

4

Initiative

Allianz Global
Investors‘ Position

Description

Date –
present

TopicsRegion/locationof scope

30% Club France

Member2021

Inclusion andDiversity (I&D)

FranceAssociation Française
de la Gestion
Financière (AFG)

Member

The purpose of the 30% Club France Investor Group is to engage with SBF120
companies on gender diversity to drive systemic change on company boards andwithin senior management teams and to develop best practices and recommendations
to make SBF120 companies more inclusive, diverse and sustainable.
AFG is the French Asset Management Industry Association.

since
inception
since
inception

ESG, Corporate
GovernanceFranceClimate

Asia

Nutrition

GlobalMember Corporate
Governance Committee
Member TechnicalCommittee Responsible
Investment

Asian Investor Groupon Climate Change(AIGCC)

MemberMember Engagement andPolicy Working Group

Member Paris Aligned
Investment Working Group
Access to Nutrition
Initiative (ATNI)*Member*

The Corporate Governance Committee of the AFG aims to promote best governancepractices in the French marketplace, improve practices at French issuers and discuss
proxy-related issues such as the role of proxy advisors and shareholder activism.
This committee organises the working groups on different topics such as the SRI label,
the ESR indicators or the energy transition law and others. The committee aims to
be a place for sharing information on current regulations, initiatives, promotion andresponsible investment.
AIGCC is an initiative to create awareness among Asia’s asset owners and financial
institutions about the risks and opportunities associated with climate change and low
carbon investing.
The work this group undertakes on engagement is complementary and in parallelwith company engagement as part of Climate Action 100+. The focus of this working
group enables investors to understand how their increasingly important role in policy
advocacy can also help drive more ambitious corporate climate action.
The group focuses on developing investor solutions for facilitating the transition to a
net zero emissions economy in Asia, and to track global progress. The group oversees
AIGCC’s second annual low carbon investment survey.
ATNI focuses on developing tools and initiatives that track and drive the contribution madeby the food and beverage sector to address the world’s global nutrition challenges.

10

2019

2018

2021

2021

2022

New this year.

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02 Sustainable investing

03 Active stewardship04 Corporate sustainability

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05.3 Sustainability initiatives overview

Principles

410

Initiative

Allianz Global
Investors‘ Position

Description

Date –
present

TopicsRegion/locationof scope

Bundesverband
Investment und AssetManagement (BVI)

MemberMember Committee
Sustainability

BVI is the German Investment Funds Association.
The committee deals with strategic and technical issues related to sustainable
investing, including corporate governance. It accompanies regulatory and political
initiatives in the field of sustainable finance, especially at the European level,
and evaluates their practical effects.
The working group prepares the association’s position on responsible investing.

2011
2020

ESG

Germany

The working group prepares the association’s position on current legislative projects
relating to corporate governance at national and European level and develops the BVI
analysis guidelines for general meetings.
The working group prepares the association’s position on sustainability risks in the risk
management processes of fund portfolios and on the management company level.
International non-profit organisation that promotes carbon reporting by requesting
information from leading companies about their GHG emissions and otherenvironmental impacts.
International, investor-focused not-for-profit. It’s the only organization in theworld working solely on mobilizing the USD 100 trillion bond market for climatechange solutions.
CFLI aims to unlock climate finance in emerging markets, thereby mobilizing private
capital in order to help finance the transition towards a more sustainable tomorrow.

2015

2015

ClimateGlobal2015

ClimateGlobal2019

ClimateEmerging Markets

The Council of Institutional Investors is the leading corporate governance network in
the US, advocating effective corporate governance practices for US companies andstrong shareowner rights and protections.
The Corporate Governance Advisory Council provides input to the board and staff
about CII activities that promote effective corporate governance and ways to enhancethe value of membership.
The Climate Action 100+ is an investor-led initiative to ensure the world’s largest
corporate greenhouse gas emitters take necessary action on climate change.

2017

Corporate
GovernanceUS

ClimateGlobalMember Working Group
Responsible Investing
Member Working Group
Corporate Governance

Carbon Disclosure
Project (CDP)

Member Working GroupESG Risk Management
Investor Member

Climate Bonds
Initiative

Partner

Climate Finance
Leadership Initiative(CFLI)
Council of
Institutional
Investors (CII)

Founding Member

Climate Action 100+*

MemberMember Corporate
Governance Advisory
Council*
Participant

2011

2020

2022

2017

New this year.

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05.3 Sustainability initiatives overview

Initiative

Allianz Global
Investors‘ Position

The Conference Board Member

Co-Chair Corporate
Governance Council

Deutsche Vereinigung
für Finanzanalyse(DVFA)

Board Member/ Sponsor
Member Kommission
Sustainable Investing
Member Fachausschuss
Governance & Stewardship

European Fund andAsset Management
Association (EFAMA)

Member Stewardship,
Market Integrity,
ESG Investment
Standing Committee

Chair of theDistribution Committee**

Principles

4

Description

Date –
present

TopicsRegion/locationof scope

The Conference Board connects businesses across geographies and provides themwith insights that enable them to anticipate what is ahead, improve their performanceand better serve society.
The Council was founded in Europe in recognition of the growing importanceattached by investors to the effectiveness of the corporate board. The Council isdedicated to executives with governance interest and responsibility, based in Europe,
including corporate secretaries, legal counsel, and institutional investors responsible
for corporate governance policies.
DVFA is a professional association of investment professionals in Germany. DVFA setsGerman Industry Standards.
The DVFA Kommission Sustainable Investing addresses how to better integrate
Sustainability in analysis and how to address policy and regulation in the Germanmarket with a focus on education and formation of analysts.
The DVFA Kommission Corporate Governance has set itself the goal of promoting bestpractice for corporate governance in listed companies. The Commission’s activities
include addressing current aspects of corporate governance, developing standards
and helping to shape relevant regulatory processes.
The Committee’s areas of focus are the stewardship role of asset managers, market integrity
and ESG and Sustainable Investment topics. In particular, the Committee addresses the
topics of Shareholders Rights and Obligations, Relationships between asset managers andinvestee companies (Stewardship), Responsible Investment, ESG Labels, Market Abuse
and Sanctions. The membership includes participation in the subgroup for Sustainable
Finance Disclosure Regulation (SFDR).
This Committee focuses on fund distribution and disclosures to investors. These include
investor protection and disclosure issues arising from the evolving Packaged Retail andInsurance-based Investment Products (PRIIPs) and Markets in Financial Instruments
Directive (MiFID) frameworks, the shift towards digital distribution tools, and the continued
integration of ESG considerations into fund products. It includes the membership in thesubgroup MiFID sustainability preferences.

2019

Corporate
Governance

GlobalESG

Germany

ESG

Europe

10

2019

2005
2018

2015

2015

2022

New this year.

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02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

05.3 Sustainability initiatives overview

Principles

4

Initiative

Allianz Global
Investors‘ Position

Description

Date –
present

TopicsRegion/locationof scope

European Leveraged
Finance Association(ELFA)

MemberELFA is the European Leveraged Finance Association, which derived from a former
European High Yield Association. The foundation of the association is to have a buysidegroup which helps push for improved reporting and governance in the European
leveraged finance arena. About topics on ESG, it covers primarily governance, but theassociation helps educate and promote asset management engagement with issuerson ESG.
The ESG Committee is working to improve disclosure on ESG topics in the leveraged
finance market and to develop best practice guidance on ESG disclosures for subinvestment grade corporate borrowers in collaboration with the PRI.
FAIR unifies different stakeholders of social impact finance in France and is the French
centre of expertise in this field at an international level. FAIR also manages a label,
the Finansol label, which distinguishes social savings products from other savings
products for the general-public.
FAIRR is an investor network raising awareness of ESG risks and opportunities inintensive animal agriculture and helping build a more sustainable food system.
French Sustainable Investment Forum – membership based organisation addressing
policy and other ESG topics specific to the French market. Organises regular events,
seminars, workshops, co-ordinates responses to consultations, etc.
Italian Sustainable Investment Forum is a membership based organisation addressing
policy and other ESG topics specific to the Italian market. Organises regular events,
seminars, workshops, co-ordinates responses to consultations, etc.
German Sustainable Investment Forum – membership based organisation addressing
policy and other ESG topics specific to the German market. Organises regular events,
seminars, workshops, co-ordinates responses to consultations, etc.
French association representing private equity (PE) and private debt professionals
active in France. France Invest promotes the growth of PE among entrepreneurs,
global savings managers, French and European public authorities and opinion leaders.
The Commission meets regularly with its members to discuss the issues faced by impact
investing players. The Commission assists its members with regulatory issues, financing
issues and best practices.

2020

ESG, Corporate
GovernanceEurope2021

Social impact

France2019

ESG

Global2009

ESG

France

2011

ESG

Italy

2013

ESG

Germany

2021

Impact InvestingFranceMember of ESG Committee

FAIR

Member

FAIRR Initiative

MemberForum pourI’Investissement
Responsable (FIR)
Forum per la Finanza
Sostenibile

MemberForum Nachhaltige
Geldanlagen (FNG)

MemberFrance Invest

MemberParticipant

Member of Impact
Commission

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02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

05.3 Sustainability initiatives overview

Principles

4

Initiative

Allianz Global
Investors‘ Position

Description

Date –
present

TopicsRegion/locationof scope

Green Bond
Principles (GBP)

Member

The GBP are intended for broad use by the market: they provide issuers guidance on
the key components involved in launching a credible Green Bond; they aid investors by
ensuring availability of information necessary to evaluate the environmental impact of
their Green Bond investments.
The role of the Advisory Council is to advise the Executive Committee, to increase its
market awareness and outreach, and to enable further engagement with specificmembership categories and observers.
The Global Impact Investing Network is a non-profit organisation dedicated to increasing
the scale and effectiveness of impact investing around the world. They do this bybuilding critical infrastructure and developing activities, education, and research.
GPCA aims to connect and influence key market participants, and to promote thesectors, strategies and deals driving investment returns and meeting societal needs.

2015

Environment

Global2018

Impact Investing

Global2021

Impact Investing

GlobalThe aim and mission of the HKGFA is to gather industry experts and provide policy
suggestions to the Hong Kong special administrative region (HKSAR) Governmentand other regulators in developing green finance in the city.
The ESG Disclosure and Integration Working Group aims to foster green financedevelopment in Hong Kong through promoting and enhancing ESG disclosure andintegration with working plans on research, policy consultation, capacity building
and cooperation.
The Policy Research and Dissemination Working Group targets to offer policy
recommendation to the HKSAR Government to strengthen Hong Kong’s green financemarket and the ESG ecosystem.
The HKIFA represents the fund management industry of Hong Kong. It aims to foster
the development of the fund management industry in Hong Kong.
The ESG working group brings together fund managers to discuss current ESG topics in
the industry, thereby shaping the development of sustainable investment in Hong Kong.
IA is a trade body for the UK’s asset management industry.

2022

ESG

Hong Kong

ESG

Hong Kong

ESG

UK

Global Impact
Investing Network(GIIN)
Global Private
Capital Association(GPCA)
Hong Kong Green
Finance Association(HKGFA)

Member Advisory
Council Green Bonds
and Social Bonds
MemberMemberMember*Member ESG Disclosure andIntegration Working Group

Hong Kong
Investment Funds
Association (HKIFA)The Investment
Association (IA)*Member Policy Researchand Dissemination
Working Group
MemberMember ESG
Working Group
Member

10

2019

2022

2022

2004
2021
2015

New this year.

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02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

05.3 Sustainability initiatives overview

Principles

4

Initiative

Allianz Global
Investors‘ Position

Description

Date –
present

TopicsRegion/locationof scope

International
Corporate
GovernanceNetwork (ICGN)
Initiative Climat
International
IFRS Sustainability
Alliance (SASB
Standards)

MemberAims to inspire effective standards of corporate governance to advance efficient
markets world-wide. This is achieved through the ICGN Global Governance Principles.

2015

Corporate
Governance

GlobalMember

The iCI represents a collective commitment to understand and reduce carbon emissionsof private equity based companies and secure sustainable investment performance.
The IFRS Sustainability Alliance is a global membership programme for sustainability
standards, integrated reporting and integrated thinking.
The IAG comprises leading asset owners and asset managers who are committed to
improving the quality and comparability of sustainability-related disclosure to investors.
IIGCC provides investors with a collaborative platform to encourage public policies,
investment practices, and corporate behaviour that address long-term risks andopportunities associated with climate change.
The group contributes to the PAII by addressing analytical gaps where further
development of methodologies and approaches is required to support implementationof the Framework.

2021

ClimateGlobal2020

ESG

GlobalClimateGlobalA dedicated working group to develop best practice and support members to increase
investment in climate solutions.

2020

This working group aims to provide a forum to help investors view how best to operationalise“net zero stewardship” and develop key tools to enable progress and work with proxyadvisors to ensure they are ready to support investors.
An investment industry body set up to facilitate dialogue between UK corporates andtheir investors.
The Investor Mining & Tailings Safety Initiative is an investor led engagement convening
institutional investors active in extractive industries including major asset owners andasset managers.

2021

2015

ESG

UK

2019

ESG

GlobalInstitutional Investors
Group on Climate
Change (IIGCC)

Member IFRS
Sustainability Alliance
Member SASB Investor
Advisory Group
Member(Under Paris Aligned
Investor initiative)
Net Zero Technical
Working Group(Under Paris Aligned
Investor initiative)
Climate Solutions
Working GroupNet Zero Stewardship
Working GroupUK Investor Forum

Underwriting Signatory

The Investor
Mining & Tailings
Safety Initiative

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2016

2021

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05 Appendix

05.3 Sustainability initiatives overview

Principles

4

Initiative

Allianz Global
Investors‘ Position

Description

Date –
present

TopicsRegion/locationof scope

Nasdaq Sustainable
Bond Network

Member of the Advisory
Board of the Nasdaq
Sustainable Bond Network
MemberNasdaq Sustainable Bond Network (NSBN) is a global platform that aims to increasetransparency and accessibility to environmental, social and sustainability bonds.

2019

ClimateGlobalNZAMI is an international group of asset managers committed to supporting the goalof net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts tolimit warming to 1.5 degrees Celsius.
OPAM was launched to support the members of the One Planet Sovereign WealthFund (OPSWF) in their implementation of the OPSWF Framework. The goal is toaccelerate the understanding and integration of the implications of climate-relatedrisks and opportunities within long-term investment portfolios through sharing ofinvestment practices and expertise.
The steering committee brings together technical leadership and commitment by its
participants aiming to further support the implementation of the OPSWF framework.
Thereby this group contributes to actively shaping the future of the initiative.
Global industry wide initiative to mobilise greater integration of ESG factors in day-today investment decisions and processes.
The aim of the group is to inform and strengthen PRI’s and its signatories’ public policy
engagement on responsible investment topics, as well as to encourage alignment
between its signatories’ responsible investment commitments and public policy efforts.
The aim of this group is to drive ESG integration in private debt.

2021

ClimateGlobal2021

ClimateGlobalESG

GlobalNet Zero AssetManagers Initiative(NZAMI)One Planet AssetManager Initiative(OPAM)

MemberMember of Steering
Committee
UN Principles
for Responsible
Investment (PRI)

Signatory
Member Global Policy
Reference Group
Member Private Debt
Advisory Committee*
Member “Advance”
Stewardship Initiative*

Spanish Sustainable
Investment Forum*

Member

10

2021

2007
2018

2022

The overall objective of the Initiative is to advance human rights and positive outcomes 2022
for people through investor stewardship. The Initiative will primarily seek change
through investors’ use of influence with portfolio companies. The following three
expectations will be set for engagement focus companies: (1) Fully implement the
UNGPs – the guardrail of corporate conduct on human rights, (2) Align their politicalengagement with their responsibility to respect human rights, (3) Deepen progress on
the most severe human rights issues in their operations and across their value.
Spanish Sustainable Investment Forum – membership-based organisation addressing 2018
policy and other ESG topics specific to the Spanish market. The forum organises
regular events, seminars, workshops, etc.

Human Rights

ESG

Spain

New this year.

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02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

05.3 Sustainability initiatives overview

Principles

4

Initiative

Allianz Global
Investors‘ Position

Description

Date –
present

TopicsRegion/locationof scope

Swiss Sustainable
Finance

Member

2021

ESG

Switzerland

Taskforce on Climaterelated Financial
Disclosures (TCFD)
World Benchmarking
Alliance (WBA)Supporter

Swiss Sustainable Finance aims to strengthen Switzerland’s position as a leading
voice and actor in sustainable finance, thereby contributing to a sustainable andprosperous economy.
TCFD seeks to develop recommendations for voluntary climate-related financial
disclosures that are consistent, comparable, reliable, clear, and efficient, and provide
decision-useful information to lenders, insurers, and investors.
WBA seeks to generate a movement around increasing the private sector’s impact
towards a sustainable future for all.

2019

ClimateGlobal2019

ESG

GlobalSupporter

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02 Sustainable investing

03 Active stewardship04 Corporate sustainability

05 Appendix

05.4 UN Sustainable Development Goals key

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Imprint

Project responsibility

Copyright © Allianz Global Investors 2023

Tatijana Kulas, Corporate Sustainability Officer

Publisher

Nina Hodzic, Head of Sustainable Investment Office

Allianz Global Investors GmbH
Bockenheimer Landstr. 42–44
60323 Frankfurt
Germany

Alexa Christie, Content Lead Sustainability

allianzgi.com/sustainability

Editor-in-chief
Matt Christensen, Global Head of Sustainable
and Impact Investing

John Bolton, Head of Content Management

Design, concept and production
Radley Yeldar, London, U.K.
ry.com

We would like to thank all of our colleagues andpartners who have helped us to create this report.
Date of publication: May 2023

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