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2023 | Sustainability Report

Shaping sustainability, delivering change

Shaping sustainability, delivering change Sustainability and Stewardship Report 2023

Contents 01 Our vision of sustainability 02 Sustainable investing 03 Active stewardship 04 Str engthening sustainability 01.1 Introducing Allianz Global Investors 02.1 Delivering change 03.1 Developing our in our operations 01.2 About this report 02.2 Sustainability research engagement strategy 04.1 Strengthening sustainability 01.3 What sustainability means to us 02.3 Sustainability methodologies 03.2 How we engage in our operations 01.4 A year of achievements and analytics 03.3 Engagement in numbers 04.2 Creating an inclusive and 01.5 Our ambition for 2024 02.4 Climate-related risks 03.4 Engagement outcomes supportive workplace and opportunities 03.5 Collaborative engagements 04.3 Ensuring responsible 02.5 Sustainability risk management 03.6 Industry engagement business conduct 02.6 Sustainable investing categories and commitments 04.4 Managing the environmental 02.7 Looking ahead: sustainable investing 03.7 Escalating engagement concerns impact of our operations 03.8 Exercising our voting rights 04.5 Driving our corporate citizenship 03.9 Transparently managing con昀氀icts 04.6 Looking ahead: strengthening of interest sustainability in our operations 03.10 Looking ahead: active stewardship 05 Appendices 05.1 UK Stewardship Code index 05.2 Engagements 05.3 Sustainability initiatives overview Allianz Global Investors Sustainability and Stewardship Report 2023 01

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01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 01 Our vision of sustainability In 2023, questions arose around the purpose and value of sustainable investing, leading to a welcome reframing of concepts, such as ESG. In this context, we have continued to focus on providing our clients with pragmatic solutions to shape sustainability, aiming for real-world change.” Matt Christensen Global Head of Sustainable and Impact Investing Allianz Global Investors Sustainability and Stewardship Report 2023 02

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01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 01.1 Introducing Allianz Global Investors Principle 1 6 Allianz Global Investors (AllianzGI) is of assets for institutions and individuals with advisory services delivered by our Our shift towards demonstrating tangible an active investment management 昀椀rm across the globe. specialist risklab team. This diversi昀椀ed change and real-world impact is at the and part of Allianz Group. We seek to AllianzGI o昀昀ers a diversi昀椀ed range of o昀昀ering enables us to help clients align core of how we generate value for clients, elevate the investment experience while active investment strategies across four their sustainability values with their which is re昀氀ected in our 2023 reporting. protecting and enhancing our clients’ main pillars – Equities, Fixed Income, investment objectives. This journey echoes the purpose of our assets over the long term. Multi Asset and Private Markets – in Providing value for clients means securing parent company Allianz Group, “We secure We have more than 600 investment Europe, Asia Paci昀椀c and the Americas. and protecting their long-term wealth. your future”, which prioritises tackling professionals and 500 relationship With this footprint, we combine expertise Hence we seek to identify long-term climate change, delivering social impact managers working across 20+ locations across public and private investments growth opportunities that align with our and ensuring sustainable growth. worldwide. We manage EUR 533 billion in developed and emerging markets vision of a sustainable future and our This Sustainability and Stewardship clients’ objectives. We are also committed Report showcases our sustainable 1 Assets under management (AUM): EUR 533 billion to customised client service and global investment and corporate sustainability By asset class By retail/institutional business and local market knowledge and insights. approach and capabilities. It is also We began our sustainable investing intended to renew our admission to the journey 25 years ago and published our UK Stewardship Code, one of the most 17% 昀椀rst Responsible Investing Report in 2018. important external accreditations of our During this period, sustainability has stewardship activities. 32% 31% become an integral part of the AllianzGI Find out more investment philosophy. In addition to Read more about our approach to covering our investment activities and sustainability and explore our latest 23% 69% commitment to active stewardship with research on our website, where you our stakeholders, our sustainability will 昀椀nd key policy documents and reporting incorporates a focus on reports, including our latest Task 28% corporate sustainability. We highlight our Force on Climate-related Financial work to embed environmental, social and Disclosures (TCFD) Report. governance (ESG) practices in AllianzGI’s Fixed Income EUR 70 bn Institutional EUR  bn business operations and how we engage For information on Allianz’s Multi Asset EUR 49 bn Retail EUR  bn with our communities and society. sustainability commitments and Equities EUR 25 bn performance, please refer to the Allianz Private Markets EUR 90 bn Group Sustainability Report 2023. 1 Data as at 31 December 2023. Total assets under management are assets or securities portfolios, valued at current market value, for which Allianz Asset Management companies are responsible vis-à-vis clients for providing discretionary investment management decisions and portfolio management, either directly or via a sub-advisor. This excludes assets for which Allianz Asset Management companies are primarily responsible for administrative services only. Assets under management are managed on behalf of third parties as well as on behalf of the Allianz Group. Any di昀昀erences in totals are due to rounding. Diversi昀椀cation does not guarantee a pro昀椀t or protect against losses. Allianz Global Investors Sustainability and Stewardship Report 2023 03

01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 01.2 About this report Principle 1 5 Our Sustainability and Stewardship Report 2023 comprises four sections, plus appendices, Report scope and boundaries A dedicated Sustainability Governance which re昀氀ect our commitment to sustainable investing, active stewardship and The contents of this report relate to Committee is responsible for overseeing corporate sustainability. all AllianzGI activities and locations. processes, products and methodology. All measures, activities and 昀椀gures The committee ensures processes are Find out how our journey from ESG to sustainability refer to the 2023 昀椀scal year (1 January e昀케cient, consistent and enforced by the Our vision of to impact evolved in 2023 with a focus on delivering 2023 to 31 December 2023) unless our Executive Committee (ExCo) when it sustainability real change. otherwise stated. comes to sustainable activities. (page 02) Robust review and assurance AllianzGI’s ExCo reviewed this Read about how our investment o昀昀ering and active The credibility of our sustainable Sustainability and Stewardship Report Sustainable approach has delivered change across public and approach, as re昀氀ected in our internal 2023. In doing so, the ExCo considers the investing private markets. processes and external reporting, report to provide a fair and balanced view (page 18) is crucial to ensure trust in our company. of our approach to sustainable investing AllianzGI reviews its sustainable policies and stewardship activities, as well as Understand our guiding themes – climate change, at least annually or more frequently if corporate sustainability initiatives. Active planetary boundaries and inclusive capitalism – our priority material changes to the regulatory or Corporate Sustainability Reporting stewardship topics for 2023, and our approach to active ownership. market environment occur that may Directive (CSRD) alignment (page 39) require adjustments in the jurisdictions Our parent company, Allianz Group, Strengthening Learn how we are increasing our e昀昀orts to bene昀椀t in which we operate. As a result of will be required to comply with CSRD sustainability in our employees, communities and the environment, and how this process, in 2023 we developed a regulations by the 昀椀nancial year 2024. operations (page 74) we manage risk and ensure compliance across our business. new biodiversity policy and further As an Allianz entity, AllianzGI has strengthened our proxy voting policy, begun collecting and reporting data including additional sustainability aspects. for the 昀椀nancial year 2023 to Allianz UK Stewardship Code indexing in line with European Sustainability Throughout the report, we mark content that speci昀椀cally Principle 1 Reporting Standards requirements for addresses the Principles of the UK Stewardship Code. selected indicators. A full index is included on pages 95–96. Principles 2 3 Allianz Global Investors Sustainability and Stewardship Report 2023 04

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01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 01.3 What sustainability means to us Principle 1 5 01.3.1 Sustainability across our business Today, when the only constant is change, 1. Generate strong investment returns 2. Sustainable product growth and 3. Foster a ful昀椀lling work our ambition is to consistently deliver while meeting sustainable objectives best-in-class business conduct environment for our employees tangible sustainable outcomes for our clients and other stakeholders. Together with our clients, employees and We have focused on the development of We motivate our people by fostering To drive sustainable growth through other stakeholders, we aim to drive lasting sustainable investment products across a merit-based, values-driven and investing, we believe it is essential change by using our expertise, in昀氀uence all asset classes that we believe can inclusive culture, while also providing that sustainability is embedded and and impact focus across the investment signi昀椀cantly drive increased revenues o昀케ce and hybrid working arrangements institutionalised within AllianzGI. value chain. In doing so, our active and net cash 昀氀ows into the future, in line with the right technology and support. Our success, as both an active investor strategies enable us to approach this goal with our long-term investment outlook. We are striving to enhance the workplace and a responsible business, depends on with a long-term perspective and align Our company values – excellence, experience for our employees in all it. We therefore focus on three dimensions with our clients’ time horizons and market- integrity, respect and passion – describe locations, focusing on shared o昀케ce of sustainability: shaping trends. how we aim to conduct our business. space – where appropriate – and 昀氀exible They underpin our ambition to be workstations to enhance collaboration. sustainable across all of our activities Our most recent annual employee and in our stewardship approach. As an satisfaction survey saw engagement at its example of improved business conduct highest level for eight years. Serving our and reinforced governance, we conducted clients well and motivating our employees an in-depth review of our marketing to excel will position AllianzGI to grow materials to increase transparency and sustainably and deliver strong results over consumer protection for the bene昀椀t of the long term. our clients, in line with regulation, such as the UK Financial Conduct Authority’s Consumer Duty. Allianz Global Investors Sustainability and Stewardship Report 2023 05

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      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations Principle 1 2 01.3 What sustainability means to us 01.3.2 Governance We have established clear lines of related topics, including sustainability In addition to our current governance and resources responsibility for sustainability that frameworks relating to strategy, risk structure, we have several working groups enable e昀昀ective oversight and management and data frameworks. that are dedicated to sustainability Sustainability accountability to take place: The SGC is responsible for the overall for investments, as well as corporate governance structure • The Executive Committee (ExCo) is consistency of frameworks across asset positioning. Topics include reputational In 2023, we evolved our sustainability the central governance and decision- classes. It oversees sustainability and risk, high-quality sustainable investing, governance to further bolster our making body for AllianzGI and its corporate sustainability indicators as stewardship standards, ESG data, operations and resilience, and future- committees, including those focused on targets for AllianzGI. It has reporting sustainable methodologies, net zero and proof the organisation for the fast- sustainability issues and commitments. obligations to the Legal, Compliance decarbonisation across asset classes. changing regulatory environment. The ExCo is responsible for establishing and Risk Committee and the ExCo. These working groups inform and make This included two major developments and deploying AllianzGI’s strategy. • The Investment Executive Committee recommendations to the IEC/SGC –establishing a dedicated Sustainability • The Sustainability Governance (IEC) is the decision-making body and the ExCo to support the decision- Governance Committee and introducing a Committee (SGC) oversees corporate for the management of the firm’s making process. new, independent Governance & Business and product sustainability approaches, investment platform and has The Global Head of Sustainable and Analytics function (see Section 4.3). including the management of responsibility for all sustainability- Impact Investing is a member of the reputational risks. It is responsible related topics within investments. IEC and reports to the Global Head of for all overarching sustainability- • The Global Proxy Voting Committee Investments, who is a member of the ExCo. determines our global voting policy and This anchors sustainable and impact Sustainability governance structure handles conflicts of interest. Any major investing at the top of the organisation. issues or changes are discussed by the AllianzGI consists of several operational 2 entities, and additional lines of Executive Committee (ExCo) Sustainable Investing Working Group and reported to the IEC. responsibility exist at the AllianzGI • The Legal, Compliance and Risk GmbH level. The GmbH Management Investment Executive Legal, Compliance and Risk Committee supports a strong Board is responsible for the overall Committee (IEC) Committee (LCRC) compliance culture and acts as an strategy of AllianzGI GmbH as well as oversight body on behalf of the ExCo its corporate and sustainable investing Global Proxy Sustainability Governance with regards to significant legal and strategy. It reports to the supervisory Voting Committee Committee (SGC) compliance and risk issues relating to all board, which receives regular updates on operating entities. AllianzGI GmbH’s business strategy from the Management Board. This includes a section on strategic updates 2 The Sustainable Investing Working Group ensures that high-quality sustainable investing standards regarding sustainability. are applied across the 昀椀rm and allows for cross-asset class topics to be considered. It is also a forum for sharing best practices. Allianz Global Investors Sustainability and Stewardship Report 2023 06

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 01.3 What sustainability means to us Principle 1 2 The Board of Management at Allianz SE Some AllianzGI functions are also • Sustainability Research and • Sustainability Methodologies & is ultimately responsible for all matters embedding sustainability considerations Stewardship – responsible for providing Analytics – uses ESG data and relating to sustainability and is supported into team and individual goals. For instance, thematic, sector and issuer research, advanced technology to develop by the Group Sustainability Board. the investment platform has implemented as well as driving our active stewardship sustainable investing methodologies Allianz also has a Global Sustainability goals that speci昀椀cally re昀氀ect the way approach and proxy voting across and solutions. function that supports the Sustainability 4 asset classes. sustainability is integrated into each fund 3. Sustainable Investment Advisory – Board in integrating sustainability into the and focus areas of each team. • Impact Investing and Private Markets risklab. This capability provides our clients business. The Sustainability Committee Sustainability resources Impact teams – manage private equity with specialist advice and solutions aimed was created within the Supervisory at AllianzGI and private debt impact offerings and at helping them meet the sustainable Board of Allianz SE to drive sustainability We have more than 45 dedicated blended finance vehicles, and oversee a goals that exist within their overall strategy integration and implementation. sustainability experts across Europe market-leading impact framework that investment strategies. Linking sustainability and Asia, with an average of 12 years’ aims to ensure credible impact delivery with remuneration experience. They drive our approach to in private markets. AllianzGI’s International Management sustainability and help us shape sustainable 2. Sustainability Standards and Group – comprising senior functional pathways for clients. Clearly established Analytics. Part of the Governance & heads from across the 昀椀rm – has lines of responsibility for sustainability Business Analytics function, and reinforces sustainability embedded within its goals within AllianzGI enable e昀昀ective oversight our governance in relation to regulatory through company-wide global solidarity and accountability. and reputational risk and strengthens the 3 segregation of duty, comprising: goals. A speci昀椀c sustainability goal 1. Sustainable and Impact Investing introduced in 2021 targets sustainability team. Part of our investment platform, • Sustainability Standards & Integration achievement, which is measured by the comprising the following teams: – ensures consistent and appropriate delivery of above-median signatory • Sustainability Strategists – participate processes across the firm to meet good scoring for Principles for Responsible in sustainable product strategy, design governance and sustainable finance Investment (PRI) results. Achievement of custom sustainable investing solutions regulation requirements. the global solidarity goals in昀氀uences the for clients, and gather insight on the 昀椀rm-wide remuneration pool. latest sustainability-focused industry and market trends. 3 Solidarity goals are corporate goals speci昀椀c to AllianzGI that include, for example, 昀椀nancial targets, client service metrics and employee engagement targets. 4 For the avoidance of doubt, whenever using the term sustainable product/fund in this publication, AllianzGI refers to a product or fund classi昀椀ed as Article 8 or 9 under the EU Sustainable Finance Disclosure Regulation as a minimum criterion. Allianz Global Investors Sustainability and Stewardship Report 2023 07

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 01.3 What sustainability means to us Principle 2 Expanding our knowledge Resources dedicated to sustainability Members of the Sustainable and Impact Investing team have a diverse range AllianzGI Sustainable and of professional backgrounds, including Impact Investing expertise 昀椀nance, investment, legal, environmental and sustainability. Gender balance is considered as part of the overall design and recruitment of the team, and we Centralised Sustainable Integrated continuously assess sta昀昀 training needs; and Impact Investing team sustainability teams several members have participated in the CFA UK Level 4 Certi昀椀cates in Investing in ESG, as well as Climate and Investing. Additionally, sta昀昀 have helped to develop the content of some of the Impact Investing Sustainability Sustainability Sustainable CFA courses, including most recently the Sustainability Sustainability Sustainability and Private Standards & Methodologies Investment Strategists Stewardship Research Markets Impact Integration & Analytics Advisory course on impact investing. Overall, our teams commitment to learning and development 3 8 7 17 4 6 4 helps to widen the spread of specialised knowledge relating to climate and impact concepts. In turn, this means Figures refer to number of employees in each function. As at 31 December 2023. we can be more e昀昀ective in deploying relevant expertise across activities, such as engagement. Allianz Global Investors Sustainability and Stewardship Report 2023 08

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 01.4 A year of achievements Principle 2 4 The ambition to become a “sustainability Key 2023 developments Private markets under the spotlight. shaper” remains our guiding principle, include: Our new SDG Loan Fund successfully and we structure our work around Sustainable investment product range mobilised USD 1.1 billion in investor three pivotal themes – climate change, extension. Our focus on providing capital to advance the United As an active long-term planetary boundaries and guidance on sustainable investment Nations Sustainable Development investor, we believe inclusive capitalism. solutions is part of a wider commitment Goals (UN SDGs) in emerging and positioning sustainability In 2023, our speci昀椀c focus areas included to clients as we look to meet growing frontier markets, using an innovative net zero (climate change), biodiversity client demand and develop strong and “blended 昀椀nance” model. at the core of our (planetary boundaries) and human rights enduring relationships. We now have over Launch of our 昀椀rst social-focused equity business offers significant (inclusive capitalism) amid challenging 200 sustainable funds, classi昀椀ed as Article strategy. Contributing to our inclusive opportunities for our clients, regulations and a volatile market context. 8 or 9 according to the European Union capitalism theme, we have launched a supports the goals of our The “ESG backlash”, largely from the (EU) regulation, and accounting for 61% fund that targets companies with superior US, but also touching on Europe, was of our total mutual fund AUM. performance on social issues, such as other stakeholders and a response to the overpromising of New investment approaches. human capital, supply chain management puts us on a sustainable sustainability over a short-term horizon Capitalising on our successful key and employee rights. footing for the future. and the relative underperformance of performance indicator (KPI) approach Proprietary sustainable investing certain sustainable funds industry-wide. targeting decarbonisation, we introduced data platform. Our in-house digital This year, we have made Our approach is guided by pragmatism two new sustainable investment sustainability platform – the Sustainability progress on all fronts.” and we welcome a renewed focus on the approaches in 2023. Our ESG score Insights Engine (SusIE) – was launched in original function of ESG in identifying approach targets a higher weighted 2022 as an internal tool to enable ESG- Tobias Pross risk materiality. average ESG score in comparison to the informed investment decision-making. Chief Executive O昀케cer benchmark and is applied to emerging In 2023, SusIE added a new module to market strategies. Our KPI sustainable provide engagement activity updates investment share approach directly to our investment teams and highlight leverages our proprietary methodology targeted outcomes for investee holdings to identify sustainable investments, that can add important perspectives to according to the EU’s Sustainable Finance investment decision-making. Disclosure Regulation (SFDR), and meet See page 26 for more information increasing client demand. on SusIE. Allianz Global Investors Sustainability and Stewardship Report 2023 09

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      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 01.4 A year of achievements Principle 2 4 Applying our research. Across our Sub-topics across our three pivotal themes three pivotal themes – climate change, planetary boundaries and inclusive Climate change Inclusive capitalism capitalism – we prioritised our activities around the sub-themes that are most The future How we critical to our clients, and where capital temperature in live equitably allocation is essential for the most urgent which we in a resource issues (see diagram). We utilise these will live constrained world themes to guide targeted engagement Carbon Net-zero Human and Diversity and research and identify the most reduction alignment labour rights and inclusion material risks and opportunities within our investments across asset classes. As part of our thought leadership programme, 17 research and stewardship insight articles, covering priority topics Energy Climate Planetary boundaries Healthcare Education across the three themes, have been e昀케ciency solutions published by our Research team. How we Research resources also focused on New energy sustain ourselves Just the 昀椀rm’s dedicated sustainability blog technologies in higher transition –Sustainability Now. The blog was temperatures launched in March 2023, and by year- Clean end we had published over 25 posts, Biodiversity water providing insights for our clients and other stakeholders. See our sustainability blog here. Resilient food Circular systems economy Sustainable agriculture Allianz Global Investors Sustainability and Stewardship Report 2023 10

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      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 01.4 A year of achievements Principle 2 4 Expanded stewardship activity. Reinforced governance and training. 5 Active stewardship continues to be a Responsible and transparent 2023 key 昀椀gures core action across our product strategies. governance is crucial to enable the 45+ professionals Engaged with In 2023, we engaged with 374 companies creation of sustainable value for all of dedicated to sustainability. 374 companies across 32 locations. We participated our stakeholders. We have therefore and voted in 9,137 in 9,137 shareholder meetings, added further sustainability expertise shareholder representing 95% of all votable meetings. outside our centralised Sustainability EUR 89bn AUM meetings. Demonstrating our focus on active team, with 10 sustainability experts now in risk-focused strategies. ownership and holding management part of the Legal, Compliance and Risk EUR 199bn AUM Greenwich Quality to account, we voted against, withheld function. By June 2023, all AllianzGI in sustainability and impact- Leader or abstained from at least one agenda employees worldwide had passed our new focused strategies combined. for institutional investment item at 71% of all meetings globally, sustainability training, demonstrating our management – 13th and opposed 22% of resolutions. As part commitment to developing sustainability 202 sustainable consecutive year in of our commitment to be more vocal know-how across our organisation. products Germany and sixth year around our engagement strategy, we (2022: 177); converted 20 in continental Europe. started to selectively pre-announce our mutual funds to a sustainable voting intentions, focusing our e昀昀orts in investing approach 100% achievement 2023 on labour rights and greenhouse gas and launched 昀椀ve new of all environmental KPIs for emissions, which is a further step towards sustainable funds. our own business operations our more activist stewardship strategy. (based on 2025 targets). New biodiversity policy. 14% of overall AUM In 2023, we published our biodiversity with a greenhouse gas (GHG) ExCo 50:50 policy statement, making the topic more emissions reduction target gender-balanced structural in bringing together our research committed to the Net Zero and stewardship activities for tackling Asset Managers initiative. biodiversity risks and incorporating the policy into investment strategies. 5 Source: Allianz Global Investors, as at 31 December 2023. Allianz Global Investors Sustainability and Stewardship Report 2023 11

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      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 01.5 Our ambition for 2024 Principle 4 Many of our clients want their The political agenda risks delaying the targets set at the COP 15 biodiversity Furthermore, CSRD, which requires investments to bring a positive di昀昀erence the 昀椀nancing and implementation of conference will help put biodiversity at the large corporates to report as of 2025 to the world, in addition to seeking transition plans that could result in a top of the sustainability agenda. for the 昀椀scal year 2024, stipulates the attractive returns. This is why we expect higher probability of a “delayed transition” There are, however, obstacles to overcome. inclusion of information on biodiversity. to see even more sustainable investing scenario, as described by the Network for Many businesses lack a thorough AllianzGI welcomes the growing 8 alignment between the TNFD and in 2024 and onwards, with the future Greening the Financial System, where understanding of their dependencies on orienting towards impact investments. signi昀椀cant catch-up investment is needed ecosystems – in particular through their CSRD that will help accelerate the to limit warming to below 2°C. supply chains – and how to manage both integration of biodiversity into investment 01.5.1 Our view of the market The climate impacts of a 2°C world could the risks and opportunities. In addition, processes. We expect these trends to Sustainability is an increasingly dominant be volatile in both scale and location, companies that are more advanced and stimulate further client interest and new aspect of investing and it is constantly with implications for economic growth, wish to build their resilience remain restricted product development. evolving. We see three macro trends risk modelling and the 昀椀nance needed to by the lack of data to support standardised shaping the sustainability outlook for 9 metrics for conservation management. achieve a delayed transition. AllianzGI 2024 and beyond: is already providing advisory analysis on Frameworks and regulations will play a 1. The political agenda could pack the potential impact on client portfolios key role in overcoming these challenges a delayed punch in terms of the drag on returns under and helping to integrate biodiversity into With more than two billion voters di昀昀erent climate scenarios re昀氀ecting 昀椀nance. Therefore, AllianzGI joined the in 50 countries heading to the polls increased systemic risk. Task Force on Nature-related Financial – accounting for over 50% of global 2. Biodiversity takes centre stage Disclosures (TNFD) in 2023, endorsing its GDP6 – 2024 is expected to be a While biodiversity has typically attracted ambition to reduce nature-related risks to 7 business and 昀椀nance. signi昀椀cant year for elections. These less attention than climate change as an elections will take place during an environmental concern, 2024 could be the The TNFD framework aims to improve ongoing cost-of-living crisis, precarious year when it gets the attention it deserves. the assessment and data availability geopolitics, the politicisation of climate There is growing recognition of the for biodiversity and is set to become an or “green” agendas and potentially interconnectedness of the two issues, and integral part of the 昀椀nancial system, with record temperatures. the 昀椀rst companies due to report in 2024. 6 Source: Brunswick Group, Eight key elections to watch in 2024, September 2023. 7 Source: WEF, 2024 elections around the world, December 2023. 8 Source: Network for greening the 昀椀nancial system, NGFS Climate Scenarios for central banks and supervisors, June 2021. 9 Source: IMF, Further delaying climate policies will hurt economic growth, October 2022. Allianz Global Investors Sustainability and Stewardship Report 2023 12

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 01.5 Our ambition for 2024 Principle 4 3. From the “transition of regulation” Through investment initiatives, such as strategies in our private markets business. to the “regulation of transition” the Emerging Markets Climate Action Moreover, we are reviewing ways to build 15 Fund (EMCAF) and our involvement in and propose credible transition 昀椀nance The arrival of the UK’s Sustainability 16 the One Planet SWF Network, we have strategies in public markets, using data and 10 Disclosure Requirements (SDR), already been developing transition methodologies developed in recent years. We see an appetite for discussions on the ASEAN Taxonomy,11 and the recent consultation on the EU’s forward-looking climate 12 SFDR have prompted the 昀椀rst stages of measures from the building on core elements of promoting market and are pleased sustainable 昀椀nance. to offer our clients an The concept of transition 昀椀nance13 innovative KPI to assess is steadily being formalised within sustainable investing frameworks. the net-zero transition of We view this as critical, since transitions their investments.” reach across ESG, climate, sustainability and impact investing. Thomas Roulland Furthermore, the notion of moving Head of Sustainability from “brown” to “green” has stronger Standards & Analytics resonance around the world than the opaque concept of simply being “green”. The launch of a consultation on transition 昀椀nance strategies by the Glasgow Financial Alliance for Net Zero (GFANZ) in September 2023 marked a signi昀椀cant development.14 10 Source: FCA, Sustainability disclosure requirements, November 2023. 11 Source: ASEAN, ASEAN taxonomy for sustainable 昀椀nance, December 2023. 12 Source: ESMA, Final report SFDR Delegated Regulation amending RTS, December 2023. 13 Source: OECD, Guidance on transition 昀椀nance, December 2023. 14 Source: GFANZ, GFANZ launches consultation on transition 昀椀nance strategies and measuring the impact on emissions, September 2023. 15 Source: Allianz Global Investors, Emerging Markets Climate Action Fund (EMCAF), December 2023. 16 Source: One Planet SWF Network, December 2023. Allianz Global Investors Sustainability and Stewardship Report 2023 13

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      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 01.5 Our ambition for 2024 Principle 4 6 • Improved climate and physical risk 21 and biodiversity 01.5.2 Our direction of travel climate change, they have been less healthcare services These trends reinforce our commitment e昀昀ective at determining the impact disclosures. Companies are providing risks are rising within the global supply of these increases. It is estimated that high-quality responses to the Climate chain.22 Evolving climate impacts could to sustainability. Regardless of political property losses from natural disasters Disclosure Project climate and water shape policies over the coming years. outcomes in 2024, we will continue to o昀昀er due to climate change could increase questionnaires, and we expect this concrete solutions and tools that support Climate and physical risks are already a by over 60% by 2040.17 There remains to become the norm as investors core element of our engagements, but our clients’ sustainability ambitions, a sizeable insurance protection gap demand this level of detail within play our part in driving the transition we continue to look at ways to develop 18 20 agenda across our industry and prioritise for these events. public disclosures. physical risk data and methodologies building a sustainable business. The most far-reaching physical risk • Increased scrutiny on sovereign within our SusIE digital platform, which Assessing the relates to water. The World Resources financial planning and disclosures. feeds our investment advisory and front most important elements Institute estimates that 44 countries Higher temperatures also place o昀케ce tools. of sustainability face “extremely high” or “high” water additional burdens on already stretched 19 stress levels by 2040, with signi昀椀cant Within sustainable investing itself, we see risk materiality for both populations and Global damage costs from weather-related natural disasters, 1980–2022 (USD billion) the shift to climate impact and “ESG 2.0” business. An increased focus on climate as the two most important current trends. impact could prompt several changes: 350 1. From climate change to • Formalised climate or physical risk 300 climate impact assessment in portfolios. Although it is As weather-related events grow more at a relatively early stage, we expect a 250 frequent and severe, climate concerns are swift evolution and adoption of physical set to shift from a distant 2050 concept risk methodological frameworks 200 to a nearer-term priority. While academic and climate risk-specific data from studies have modelled the increases in external providers. temperature and emissions related to 150 100 17 Source: Columbia Climate School, With Climate Impacts Growing, Insurance Companies Face Big 50 Challenges, November 2022. 0 18 Source: AON, Global Catastrophe Recap, October 2023. 19 Source: Statista, Where water stress will be highest by 2040, March 2023. 980 990 2000 200 2020 20 Source: CDP, Guidance & questionnaires, December 2023. Drought Flood Extreme weather Extreme temperature Landslide Wildfire 21 Source: Allianz Global Investors, Health is wealth, October 2023. 22 Source: Allianz Global Investors, De昀椀ning the rules of engagement to protect biodiversity, June 2023. Source: World in Data, December 2023. Allianz Global Investors Sustainability and Stewardship Report 2023 14

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 01.5 Our ambition for 2024 Principle 4 6 2. ESG 2.0: focus on materiality allow impact and dependency risks to be Sector materiality Sustainability Rating (PSR), which will be ESG has become a highly divisive term. robustly quanti昀椀ed. Our approach to risk Our Sustainability Research team introduced at a later stage. It was 昀椀rst formalised as a risk materiality materiality spans three stages: has developed sustainability sector Company materiality 23 frameworks for 24 broad industry concept in 2004, but then su昀昀ered Thematic materiality We continuously review the best data (in mission creep as it became increasingly At a top-down level, we identify sectors classi昀椀cations in collaboration with our terms of both quality and coverage) to associated with imposing values and that have the highest impact or materiality other research teams and investment assess individual entities. The “ESG pro昀椀le” “doing good”. In addition, ESG scores of on our three core sustainability themes of sector specialists. The frameworks include available in SusIE continues to expand, the main data providers were criticised climate change, planetary boundaries and a proprietary sustainability materiality featuring risk, controversy, sustainability, for being opaque. We believe ESG will inclusive capitalism (see table below). matrix, where materiality – high, carbon, climate and other data, alongside return to its original purpose, where medium or low – is assessed for our four our sector-related scoring system. We also high-quality, innovative data capture will pillars: environmental, social, corporate recognise the “double materiality” drivers governance and business behaviour. of risk, which are explained below and Sectors with high materiality/impact for selected thematic topics This materiality mapping guides our 24 illustrated in relation to biodiversity. We not Net-zero alignment Biodiversity Human rights research and engagement (including only include risks from direct impacts and Automobiles & components Chemicals Aerospace & defence recommended engagement questions). dependencies within our analysis, but also Banks & 昀椀nancial services Consumer durables & apparel Construction, building materials Its sub-factors will be aligned to speci昀椀c systemic risk considerations. Capital goods (including Food & beverages Consumer durables & apparel data and feed AllianzGI’s new Proprietary aerospace & defence) Forest products Electrical equipment & Chemicals Mining machinery The double-materiality of biodiversity-related risks Construction materials Oil & gas Energy Containers & packaging Transportation Food, beverage & tobacco Impacts on biodiversity Dependencies on biodiversity Food & beverage Utilities (electric & water) Information technology Energy Metals & mining Forest products Retail & food retail Physical risks Regulatory and legal risks Real estate Disruption to ecosystems and e昀昀ects on (eg, restrictions on land and resources access, Technology hardware business opportunities (eg, decline in compensation costs, new procedures) Transportation agricultural yields, higher resource costs) Utilities Systemic risks Source: Allianz Global Investors Sustainability Research and Stewardship teams. Reputational risks Impact on the global society leading These mappings are the cornerstone of focused engagement and research, providing a Damage to company brand and loss to additional market failures high conviction on risk and opportunity assessments for sectors and individual companies. of “social licence to operate” (eg, stock (eg, natural disaster, pandemics or market collapse, boycotts linked to activities associated supply chain disruptions) contributing to extinction of species 23 Source: UNEPFI Who cares wins, 2004. or deforestation) 24 Source: Net-zero alignment share (NZAS) is a proprietary AllianzGI KPI, assigning entities with one Source: Allianz Global Investors of 昀椀ve net-zero preparedness assessments. Allianz Global Investors Sustainability and Stewardship Report 2023 15

      2023 | Sustainability Report - Page 16

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 01.5 Our ambition for 2024 Principle 4 6 Overall, we believe our approach to ESG Our track record in sustainable investing is a reminder for clients of the original and the breadth of our resources allows Example 2: purpose of ESG, which is to better assess us to share knowledge and best practices risk materiality across multiple dimensions. with our clients to support them in setting For a German corporate client, we Sustainable investing Data is key, and we are excited about the their sustainability objectives and 昀椀nding assessed the impact of the application has multiple facets. future for new data capture techniques, the most appropriate investment solutions. of a relative carbon intensity approach Our role is to help clients including arti昀椀cial intelligence (AI) This typically means analysing the on its mandate. Following the and machine learning, and the potential sustainability features of their current assessment, the client decided to apply navigate the shifts in for more forward-looking data. portfolios, assessing the impact of the envisaged carbon intensity approach, regulation and other Prioritising innovative di昀昀erent sustainable investing approaches which will lead to a reduced carbon emerging developments, investment solutions and and helping clients to formulate their intensity footprint of the mandate in the client advisory sustainability objectives, with the goal medium term. while offering a range Guiding clients through a rapidly of supporting the implementation of pragmatic and evolving regulatory environment and further enhancement of their AllianzGI’s risklab advisory team is differentiating solutions Our goal is to help clients implement chosen approach. a core part of our overall o昀昀ering to suited to their situation investment solutions that 昀椀t their own institutional investors. With 60 advisers and ambitions.” values framework while adhering to the Example 1: globally, risklab helps our clients meet highest quality standards. This is part of their investment goals through specialist Edouard Jozan our 昀椀duciary duty. We recently supported a French advice and solutions. In 2023, we Head of Distribution Institutional clients have seen rising insurance company in assessing continued to enhance our sustainability- Europe regulatory pressure around the disclosure the climate pro昀椀le and biodiversity speci昀椀c capabilities within risklab, most of sustainable investment activities, footprint of its portfolio. We assisted this notably through new advances in portfolio particularly in the EU. There is also a bigger institutional client in re昀椀ning its exclusion simulation that allow us to quantify the drive to align investment activities with policy and have initiated discussions risks of climate change at a portfolio level speci昀椀c values and long-term sustainability on the incorporation of climate-related See page 19. convictions. Consequently, our clients are forward-looking requirements. looking for a strong partner in capturing opportunities, such as aligning with carbon reduction commitments in anticipation of changing regulatory norms or assessing which activities they may wish to 昀椀nance or divest. Allianz Global Investors Sustainability and Stewardship Report 2023 16

      2023 | Sustainability Report - Page 17

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 01.5 Our ambition for 2024 Principle 6 Our KPI-based approach and carbon and adaptation to climate, planetary and 26 Expanding our KPI-driven approach FMO and Skandia )and the framework While the last two decades were dominated intensity metrics covering climate change social risks. This is where the fast-emerging outlined in the white paper, we continue to by ESG scores, we now see clients seeking set out our direction of travel. The ability impact investing market can play a review how best to develop credible and transparent, measurable and tangible KPIs to o昀昀er more KPIs around biodiversity and signi昀椀cant role. robust public market impact strategies. for sustainability. inclusive capitalism will be critical in a new The rapid growth of impact investing AllianzGI as a Increasingly this will mean addressing era of tailoring solutions to meet evolving re昀氀ects its importance in addressing the corporate citizen client requests for customised solutions. client needs. most important environmental and social Corporate sustainability is a cross- In addition to being easy to understand, The market push towards KPIs will allow challenges of our time, while delivering functional endeavour at AllianzGI. KPIs can align investor and portfolio asset managers to di昀昀erentiate on the on 昀椀nancial returns. Our focus is on It is embedded into functions as diverse manager objectives into a single metric. basis of their sustainability data strategy generating a positive impact through as real estate management, culture With distinctive expertise in sustainability as well as their research capabilities. direct and indirect investments across and engagement, HR, and legal data, we aim to lead the way in This will enable them to evolve data private equity and debt, including blended and compliance. developing and activating innovative capture independent of the current 昀椀nance vehicles. Empowering employees is key to sustainability metrics, for example: reliance on purchased data, drive real- Impact investing is well suited to private operating as a responsible business, • Climate change – launched in 2022. time insights supported by technology, markets, where smaller stakeholder and bringing positive impact to the KPIs may include net-zero transition, and apply a complete risk assessment to groups and project-based investments can communities around us and wider society. share of renewable energy used and an entity’s entire value chain. With this enable speci昀椀c and measurable outcomes. In 2023, we focused on encouraging and non-CO 2 GHG emissions. improved measure of sustainability risks, To contribute to the evolving industry supporting colleagues to become more managers will be able to better diversify debate, we published a white paper active in our sustainability journey through • Planetary boundaries – planned for them through investment. Looking ahead in 2023, re昀氀ecting on our own impact 2024. Thematic, biodiversity-focused to 2024, we think technology-led a corporate citizenship programme 25 KPIs may include deforestation, marine innovation, such as our SusIE digital investing in private markets. that is coordinated, systematic and biodiversity, waste reduction and recycling platform, will create new opportunities for We think some of the long-held concerns strategic. This provides local and global share, water efficiency, sustainable raw competitive advantage. about achieving a market rate of return opportunities to contribute to the material sourcing, and species abundance in impact investing are diminishing as the sustainability of our 昀椀rm in addition to and ecosystem services dependencies. Finding a solution with impact opportunities expand. However, a key the continuous progress achieved across • Inclusive capitalism – planned for 2024. At COP 28, it was encouraging to see the challenge to scaling up impact through our own operations. The consistency and Diversity and inclusion KPIs may include evident interest of many stakeholders in public markets lies in the measurement structure of this programme reinforces gender equality, female empowerment developing and scaling new technologies and evaluation of impact. Through our our commitment to being socially and employee satisfaction and wellbeing. and solutions to accelerate mitigation impact investing experience in private accountable to all stakeholders alongside markets (recently demonstrated through our ambition to be an environmentally 25 Source, Allianz Global Investors, Investing for meaningful impact in private markets, July 2023. the SDG Loan Fund collaboration with sustainable business. 26 Source, Allianz Global Investors, SDG Loan Fund mobilizes USD 1.1 billion of investor capital, November 2023. Allianz Global Investors Sustainability and Stewardship Report 2023 17

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02 Sustainable investing Investing with a sustainability orientation is essential for the future of our industry. In preserving and growing our clients’ assets, we must think and act for a future where a changing world and climate impacts will be important inputs for risk management.” Deborah Zurkow Global Head of Investments Allianz Global Investors Sustainability and Stewardship Report 2023 18

      2023 | Sustainability Report - Page 19

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.1 Delivering change We continue to see clients moving 02.1.1 Guiding and 2023 milestones beyond managing environmental, social supporting clients and governance (ESG) risks and towards with risklab Actively managing Implementing our the expectation that their investments greenhouse gas impact framework are aligned with sustainable outcomes, Risklab is AllianzGI’s advisory and across a range of private such as supporting the pathway to solutions team that supports clients to (GHG) intensity market asset classes. net zero. Some clients have already achieve sustainable investment goals. as a key performance moved one step further towards impact Its capabilities also cover asset allocation, indicator (KPI), along with Further building on our investing and are asking for measurable risk management, private markets, wealth seeking attractive returns, 昀椀rm-wide social or environmental bene昀椀ts management and digital solutions- has now been rolled out to Sustainability from their investments, as well as related objectives. over 40 of our funds. Insights Engine 昀椀nancial returns. We assess our clients’ sustainability Enhancing our (SusIE) with a new As the possibilities expand, our ambition levels by discussing best market engagement module and commitment to sustainability does not practice. As a core feature of our o昀昀er, ESG reporting document library. change, but the way we think about it we help clients gauge the sustainability with more information Strengthening our does. Given the diversity of investors’ pro昀椀le of their portfolios alongside around carbon statistics 昀椀rm-wide objectives and requirements, our 昀椀nancial risk-and-return characteristics. and information covering sustainability sustainable investing products are built This is the basis for our advice on how regulatory-driven parameters, knowledge by rolling around a broad range of approaches to improve the sustainability pro昀椀le of such as taxonomy alignment out mandatory training to that are adaptable to di昀昀erent levels of an investment portfolio and/or achieve 27 ESG incorporation and client preferences. speci昀椀c sustainability goals, such as share and sustainable all employees in 2023. 28 Our capabilities seek to enhance our making progress on a decarbonisation investment share. Publishing our 昀椀rst clients’ investment decisions while helping path or increasing the positive biodiversity policy create bene昀椀ts for wider society. This is environmental or social contributions of statement in all part of our commitment to being a the portfolio. We aim to understand our September 2023. “sustainability shaper”. clients’ goals and then show alternative Our focus on leveraging our capabilities ways of achieving them. to deliver tangible change has continued Throughout, we provide transparency to drive the evolution of our sustainable on the implications of each pathway to investment activity. support well-balanced decisions. 27 Percentage of a fund’s AUM aligned with requirements of the EU taxonomy for sustainable activities. 28 Portfolio commits to a minimum weighted sustainable investment share (as determined by the EU Sustainable Finance Disclosure Regulation) of at least 20% and exposure to issuers not meeting the Do No Signi昀椀cant Harm principle is limited. Allianz Global Investors Sustainability and Stewardship Report 2023 19

      2023 | Sustainability Report - Page 20

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.1 Delivering change We are seeing more climate awareness to take a forward-looking perspective from clients because climate risk can on asset class returns in likely climate Comparing traditional and alternative sustainable now be modelled, and its portfolio scenarios. Because Climate Navigator investment approaches via risklab e昀昀ects quanti昀椀ed, with greater accuracy. encompasses both traditional and We can demonstrate to a client how For example, we can show investors For example, new advances in simulation sustainable investment approaches, di昀昀erent sustainable investing approaches that a carbon intensity reduction can be make it possible to quantify sustainability it can form the basis for a decision on a昀昀ect both the sustainability and 昀椀nancial achieved by adopting an exclusionary risks rather than simply applying a which approach to take to prepare the performance of a portfolio. or a climate transition (but not a Best-in- qualitative rating. This is helping respond portfolio for climate change. We simulate one scenario in which the class) approach and that each approach to the ESG pushback in some markets, Portfolio-level sustainability investment benchmarks incorporate has di昀昀erent implications for the portfolio with risklab’s advances in 2023 helping typically accepted (traditional) exclusions, composition. Throughout, we work with to provide clients with the transparency, More investors are looking to incorporate our Portfolio Management team to clarity and long-term view they need. sustainability considerations at the and one that uses a Best-in-class ensure that both approaches can be portfolio modelling level. We can apply approach to identify issuers that are better implemented in practice. Climate Navigator actionable advice to help them achieve prepared for a climate transition. Risklab’s new Climate Navigator this goal by simulating sustainability- capability o昀昀ers analysis that helps related actions that would impact their investors think about future climate portfolio. For example, we can simulate scenarios and quantify what they mean what it would mean if a sustainable in terms of expected returns, as well as investing approach is changed for an extra 昀椀nancial impacts. We can now whole portfolio approach in terms of the simulate asset class returns for traditional portfolio’s sustainability considerations, and sustainable investment approaches – carbon footprint and controversies, or and therefore expected portfolio returns 昀椀nancial considerations such as yields. –in di昀昀erent Network for Greening the Financial System (NGFS) scenarios, helping clients to position themselves for these scenarios. This allows investors Allianz Global Investors Sustainability and Stewardship Report 2023 20

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.1 Delivering change SARAH modules purposes, we produce monthly reports Two new modules have further enhanced that contain an overview of engagement the capability of SARAH, our Sustainability activities at the portfolio level. Analytics Research and Advisory Hub. These reports include a breakdown by These include implied temperature rise as engagement topic, region and sectors. an analytical and simulation capability, We publish our global proxy voting as well as climate value at risk (CVaR) statistics, including an insightful that can quantify the impact of di昀昀erent assessment of voting trends, on our NGFS climate scenarios on the portfolio website annually. We also provided in terms of physical risk, policy risk and clients with insight on our voting policy, technology opportunities. voting processes and decisions, as well 02.1.2 Supporting clients as an outlook on the upcoming annual general meeting (AGM). During these Every year, our engagement activities conversations, we collected feedback on are further embedded within AllianzGI where our processes and transparency through stronger collaboration between could be enhanced. Feedback was used to dedicated stewardship and investment inform our proxy voting policy review. professionals. During regular client For several consecutive years, AllianzGI meetings, we discuss stewardship has been recognised for its excellent activities and gain important insight service quality in institutional investment into the engagement themes clients management by Coalition Greenwich. would like us to prioritise. For certain We repeated this achievement in portfolios, we hold dedicated feedback 2023, when we were named as Quality meetings to discuss the decarbonisation Leader in both Continental Europe and pathway of the portfolio and the Germany, showcasing our institutional outcomes of engagement and voting. clients’ satisfaction with our service The climate strategies of companies are quality. This includes our relationship a particular focus of these meetings, management capabilities, ability to as well as deep-dive conversations on understand clients’ goals and investment our approach to biodiversity or human and risk management skills, as well as our rights. For transparency and information credibility and the quality of our reporting. Allianz Global Investors Sustainability and Stewardship Report 2023 21

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.2 Sustainability research Principle 7 Sustainability research is a cornerstone In 2023, we published 10 in-depth of our active investment approach. research papers, a selection of which The team conducts proprietary is below: research to monitor ongoing and identify Renewable energy: the 2050 remix emerging sustainability issues, and translates 昀椀ndings into investor-relevant Deforestation: getting to the root of insights to share with our investment the problem professionals. The Sustainability Liquid capital: how investors should Research team looks at three tackle the water crisis interconnecting perspectives – thematic, sector and issuer research – all with a Power of 3: why Scope 3 joined-up approach. emissions matter 02.2.1 Thematic research Human rights – the weakest link in Thematic research is organised across supply chains? (in collaboration with our three pivotal themes: climate the Stewardship team) change, planetary boundaries and We extended our knowledge-sharing inclusive capitalism. channels through the new AllianzGI This research informs our experts’ blog: Sustainability Now. This new consideration of investments in channel allows for more timely insights these themes by providing a clear into evolving developments on single understanding of underlying sustainability strategic themes or across themes with topics. The Research team shares insights close interdependence. Examples of internally and externally through papers blog posts include: and publications. Biodiversity: essential to people and planet Health is wealth? Allianz Global Investors Sustainability and Stewardship Report 2023 22

      2023 | Sustainability Report - Page 23

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.2 Sustainability research Principle 7 02.2.2 Sector research Structural improvements to the sector 02.2.3 Issuer research 02.2.4 Connecting top-down We view sector research as the glue frameworks in 2023 Our issuer analyses focus on the most with bottom-up between thematic and company • For all 24 sectors, we improved the impactful investee issuers in terms of The interconnectedness of the thematic, research, and we continue to develop granularity of material emissions data holdings, the highest-pro昀椀le issuers in a sector and issuer research layers provides our proprietary sustainability sector and introduced our proprietary net-zero sector, those most relevant to our core us with conviction and consistency frameworks for 24 sectors. The sector alignment share KPI. themes, and controversies or where data in our views and helps identify the frameworks summarise key sustainability • Among the 16 factors, we introduced providers disagree. Each issuer review cause-and-e昀昀ect links to policy, data, metrics that are common to all sectors, specific flags on the highest human is structured along the pillars of human methodologies and engagement – see and include in-house views on materiality rights-related risks. rights, environment, social, corporate page 24. Beside fostering collaboration, for 16 factors and a thorough analysis by • Some high materiality factors within governance and business behaviour, it ensures we can capture changing our sustainability analysts. This framework several high-profile sectors require a comprising qualitative research and a data and emerging new trends in supports investment decisions, drives deeper dive. In 2023, we developed proprietary scoring system. We have rapidly evolving market segments, engagement dialogues with companies new deep-dive sections for six sectors adapted approaches for the two types of including regulatory, scienti昀椀c and and provides inputs to our proprietary (eg, pollution and waste management issuers: corporates and a second group technological advancements. sustainability rating system. for the paper and plastic packaging comprising sub-sovereigns, supranationals This approach also informs our sector) and continue to roll out these and agencies. The Research team runs stewardship initiatives and is critical in sections in 2024. They focus on a ad-hoc issuer reviews triggered by articulating a transparent and coherent specific topic, explain the materiality emerging developments, controversies rationale for investment professionals and in more detail, outline leading and or diverging signals from external our client o昀昀ering. lagging practices and provide detailed assessments. We completed over 250 engagement guidance. issuer sustainability analyses in 2023. In collaboration with the Sustainability, Methodologies & Analytics (SMA) team, we have streamlined the data and metrics used in issuer analyses, aligning to the “ESG Pro昀椀le” in SusIE. In addition, the team has reinforced its own internal systematic monitoring of controversies, resulting in a more comprehensive and granular dashboard. This provides invaluable guidance on where to direct our research and engagement focus. Allianz Global Investors Sustainability and Stewardship Report 2023 23

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.2 Sustainability research Principle 7 The Research team strategy and roadmap Example of how we collaborate on biodiversity are built around the interconnections between the Sustainability teams and across the investment platform. This is Example: biodiversity driven by a collaborative approach to Triggers/drivers: priority topics, as illustrated by the • Biodiversity COP 15 outputs from our focus on biodiversity • Emerging nature disclosure standards shown on the right. Fully scoping sustainability themes enables us to identify and assess speci昀椀c impact and relevance to di昀昀erent industries. Framing and prioritisation of biodiversity topic Detailed thematic understanding has been critical in our classi昀椀cation of the materiality of sustainability factors for Cross-team synergies and collaborations each sector. This process also provides an e昀케cient way to focus on the most relevant factors for our issuer assessments. At the same time, our issuer research helps us to monitor evolving practices in Tools & Thematic Sector Issuer Investment di昀昀erent sectors, allowing us to frame Methodologies Research Research Research Engagement Policies leading and lagging standards in our sector frameworks, which can inform our understanding of standards at a thematic level. Determine relevant Joint research paper KPIs identi昀椀ed are Engagement Stewardship team Allianz Global biodiversity KPIs with with Stewardship included into the output integrated focuses on targeted Investors Biodiversity SMA team team to share sector frameworks for into company engagement for seven Policy Statement our engagement seven highly a昀昀ected assessments most a昀昀ected sectors published in approach industry sectors collaboration with SSI team Key: SMA – Sustainability, Methodologies & Analytics team SSI – Sustainability, Standards & Integration team Allianz Global Investors Sustainability and Stewardship Report 2023 24

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.3 Sustainability methodologies and analytics Principle 4 5 8 Throughout 2023, we continued re昀椀ning 02.3.1 Leveraging ESG data our methodologies to better manage We believe ESG data is critical in achieving How we select and monitor data providers risks for our clients in a time of rapid strong conviction across all styles of change within the data, market and sustainable investing. Our selection process for third-party They might alert users to sudden regulatory landscape. Sustainability is a data providers highlights data capture, coverage drops or data inconsistencies complex topic; fortunately, proprietary We use multiple third-party providers raw data points, data coverage, data compared with expected values (eg, tools such as SusIE are helping our and complement this with internal transparency, and quantitative and where the carbon footprint data is clients to bene昀椀t from the ongoing information derived from our own qualitative methodologies. We also inconsistent with the actual reported enhancements in identifying and investment and sustainability research assess how the data is documented and data of the corporate). These issues can measuring portfolio risks. We recognise processes. The long-term plan is for our the resources available for client support. then be examined and resolved. change will continue to be a constant in proprietary tools and research to be sustainability, which is why we continue the primary driver of our ESG insights Selected data is sourced from providers With the support of our Data & our long-term commitment to invest in a and investment decision-making. directly into our internal cloud-based Technology team, we monitor how robust infrastructure to support clients in For instance, the materiality assessment “data lake” managed by our Data & the data quality evolves over time meeting their investment goals. from our sustainability research is a core Technology team. Each dataset has (eg, coverage, expected values, format Our Sustainability Methodologies & input for our proprietary sustainability an “identity card” and is subject to a of deliveries) to capture any potential Analytics (SMA) team is responsible rating system. mandatory quality control process prior integrity issues. for our sustainability data strategy, Another key challenge during the year to onboarding. We continuously monitor the quality the proprietary sustainability rating has been responding to highly tailored This information is collected by internal of key service providers through robust methodology used in the SRI Best-in- client requests, such as multi-provider stakeholders identi昀椀ed as data owners service level agreements or operating class approach (see page 34) and the sustainability exclusions or biodiversity risk and data stewards. They oversee, memoranda, as well as frequent development of the analytics dataset for exposure assessments. At the same time, implement and document the controls meetings. In addition, our independent climate change, planetary boundaries this is an opportunity to work with new applied on data 昀氀ows and deliveries. risk management function reviews and inclusive capitalism. They also providers, themes and methodologies. the monitoring procedures of these focus on KPI target-setting and SDG Indeed, we accelerated our work on key service provider relationships and measurement. Ultimately, the team biodiversity and are now working on ensures alignment with our key vendor empowers sustainable investment aligning with standards around natural and outsourcing provider policies. decisions through data-driven insights capital data availability, such as the with SusIE. Taskforce on Nature-related Financial Disclosures (TNFD). Allianz Global Investors Sustainability and Stewardship Report 2023 25

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.3 Sustainability methodologies and analytics Principle 4 5 8 Reinforcing our focus on the application to ensure we advertise our products 02.3.3 SusIE empowering SusIE is also the main portal for accessing of high-quality, actionable ESG data, Matt responsibly and in line with regulation. analytics proprietary sustainability scores with Christensen became a board member of the Net-zero focus Introduced in 2022, SusIE is a key transparent and granular indicators. GRESB Foundation in 2023. The foundation The topic of climate provides another enabler of active investment decisions In 2023, SusIE will also distribute in-house is an independent, not-for-pro昀椀t concrete example where we see a growing on sustainability across asset classes, research – thematic, sector and company organisation that sets global standards demand for risk management approaches feeding front o昀케ce tools and interfaces research – from our sustainability research for assessing the ESG performance of real targeting decarbonisation or net-zero with consistent ESG data. Today, SusIE is and stewardship analysts. External and estate, infrastructure and other assets. aligned strategies. As such, one of our the global sustainability tool for AllianzGI, internal insights contribute to the real key developments was to successfully used by investment experts, product integration of sustainability in our active 02.3.2 Value added through roll out an innovative net-zero alignment investment decisions. sustainable methodologies specialists, risk management and other share methodology aimed at increasing stakeholders. This contributes to our Regulatory needs investments in companies that are already market di昀昀erentiation on how we tackle Regulation continues to evolve and has net-zero aligned or aligning towards a net- sustainability, leveraging our expertise been a key driver of our sustainability risk zero pathway. This methodology, based via a powerful proprietary engine that management. During the last year, we have on the net-zero Investment Framework delivers added value for our clients. created additional KPIs for pre- and post- from the Institutional Investors Group on Wide range of external ESG datasets trade checks, but with a standardised Climate Change (IIGCC), is also leveraging complemented by in-house research and automated approach. This means we recognised and accepted standards. Our multi-provider-based strategy for ESG can meet the client and market demands Supporting sustainability disclosures data ensures that we bene昀椀t from a broad for accurate and consistent proof points, This was the 昀椀rst year in which we disclosed spectrum of data inputs. SusIE processes, coupled with the respective methodology an SFDR Principal Adverse Impact (PAI) computes and transforms data from supporting them. We supported clients in 29 understanding the EU taxonomy sustainable statement. While challenging to achieve, more than 10 third-party vendors into investment share requirement and ESG risk this marked an important transparency standardised datasets using cloud data monitoring in Asia. milestone, given its focus on our evaluation storage. This includes automated checks of the PAIs of our investment decisions on of pre- and post-data processing to ensure We review methodologies at least annually sustainability factors. In 2024, we will focus high-quality standards and data integrity and, as more information is disclosed, we on aligning with the coming Corporate across the value chain. are strengthening our ability to precisely Sustainability Reporting Directive, as classify what is, or is not, a sustainable well as with market practices that are still activity, as determined by the EU taxonomy, evolving for a number of the PAIs. 29 Allianz Global Investors Principal Adverse Impact Statement, 2023. Allianz Global Investors Sustainability and Stewardship Report 2023 26

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.3 Sustainability methodologies and analytics Principle 4 New engagement module Exclusions and regulatory analytics with these EU guidelines – from their policy module to provide comprehensive We continued to enhance and develop under the spotlight investment universe, but also to consider transparency for our investment experts SusIE, adding two new modules: an SusIE supports the analysis and any breach of governance principles and/ on companies that do not comply with engagement module to promote and implementation of EU taxonomy and EU or harming risks. international standards, international strengthen our stewardship activities and sustainable investment shares. It allows Negative screening is commonly used regulations, clients’ guidelines and/or a document library, which is a central hub our portfolio managers to select the best- for ESG integration by clients, and we AllianzGI sustainable convictions. for sustainability-related documents such performing companies – in accordance have designed a dedicated exclusion as research publications, methodologies Centralised access to engagement information via SusIE and policies. Leveraging SusIE’s new engagement module allows stewardship analysts, Stewardship analysts Equity analysts portfolio managers and investment analysts from each asset class to centralise the recording of sustainability engagement information and stewardship activities. Information, such as general context, corporate executives contacted, topics discussed with the companies and documents related to the engagement, is all made available for each engagement discussion. The ability to link di昀昀erent engagements and follow-up discussions allows better tracking. In addition, SusIE o昀昀ers internal report functionality for our portfolio managers, displaying metrics related to engaged investee companies and enabling users to 昀椀lter between themes discussed and dates. Portfolio managers Fixed Income analysts Allianz Global Investors Sustainability and Stewardship Report 2023 27

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.4 Climate-related risks and opportunities Principle 4 Climate change is anticipated to have a Integrating climate risks and Climate strategy and clients 3. In addition, risklab’ s Climate Navigator signi昀椀cant impact on worldwide economies opportunities in investment processes As a member of the Net Zero Asset provides a forward-looking approach and the various areas in which AllianzGI We continue to build our expertise in Managers initiative (NZAMi), in managing for measuring the impact on expected operates. We have identi昀椀ed a wide identifying, de昀椀ning and measuring our clients’ assets, we are shaping the future asset class returns, based on range of transitional and physical risks these climate-related opportunities pathway towards net-zero GHG emissions macro as well as company-speci昀椀c and opportunities associated with and risks. This is critical to our ability to by 2050 in line with global e昀昀orts to limit changes across NGFS climate climate change across short, medium and help guide our clients on the possible warming to 1.5°C as outlined in the Paris change scenarios. long-term timeframes. We base our 30 outcomes of individual investments, Agreement. In so doing, we enable 4. W e develop tailored climate-related approach to climate-related risks and portfolios or even broader asset classes. our clients to re昀氀ect climate risks and investment solutions, answering opportunities on the understanding that A high level of connectivity between opportunities in their holdings: speci昀椀c institutional client needs to they could have signi昀椀cant 昀椀nancial policy, data, research and stewardship, 1. A longside mainstream strategies, align their portfolios while considering implications, thereby in昀氀uencing our and collaboration with Investments, we o昀昀er climate thematic and impact- coal exclusions, transition exposure corporate, operational and investment Distribution, Legal and Compliance and driven opportunities, such as green and/or emissions reduction. endeavours. We recognise that these other functions, provides the platform for: bonds, climate transition equity and climate-related factors may increasingly • Offering climate investment solutions to private markets renewable energy a昀昀ect the value of our portfolios as clients supported by thorough research investments. These specialised time progresses. and methodologies. assets can help to align an asset As an asset manager, we deeply integrate • Ensuring policies are robust and current, owner’s portfolio with climate sustainability considerations, especially such as our Coal Exclusion Policy. transition targets. concerning climate change, into every 2. Risklab o昀昀 ers comprehensive portfolio aspect of our investment approach, • Collaborating with investment analyses, which include GHG emissions, processes, product development and teams and asset owner clients to transition scores, physical risks, implied business operations. decarbonise portfolios. temperature rise and exposure to • Engaging with companies to establish fossil fuels. interim targets and facilitate progress towards driving real economy transition. For more information see: Climate Policy Framework and annual TCFD report on our website. 30 Source: United Nations Climate Change, The Paris Agreement, December 2015. Allianz Global Investors Sustainability and Stewardship Report 2023 28

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.4 Climate-related risks and opportunities Principle 4 Decarbonisation targets We will continue to increase the scope of We want to be as transparent as possible our assets and set intermediate targets for regarding our climate-related pro昀椀le, our third-party client assets. We will also including investment-related climate actively engage with institutional clients metrics. We submitted our 昀椀rst NZAMi and distributors to integrate net-zero interim targets at the beginning of 2022, objectives in their investments and into covering listed equity, corporate debt, our mutual funds. We aim to review our infrastructure equity and infrastructure targets and progress annually. debt. These targets re昀氀ect those set by We use a variety of indicators across Allianz in 2021 for its proprietary assets as di昀昀erent lines of business to monitor, a member of the UN-convened Net-Zero assess and steer climate-related Asset Owner Alliance (NZAOA). aspects of the economy. Our measured See the Allianz Group Sustainability investment-related carbon footprints Report 2023. (Scopes 1 and 2) are based on the For AllianzGI, assets in scope of the issuers’ carbon emissions data from targets represent 14% of overall assets data providers. under management: • 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 end of 2025 (baseline year: 2020). • Infrastructure debt – our target is to grow the share of low-emitting and EU taxonomy-eligible assets. Allianz Global Investors Sustainability and Stewardship Report 2023 29

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations Principle 4 7 02.5 Sustainability risk management At AllianzGI, we believe sustainability • Sustainability factors: environmental, Additionally, through active risks have the potential to negatively social and employee matters, respect stewardship, such as targeted corporate in昀氀uence the investment performance for human rights, anti-corruption and engagement and proxy voting, our of portfolios. Therefore, we consider anti-bribery matters. investment professionals aim to sustainability risks in our investment • Sustainability risks: environmental, mitigate and improve the sustainability processes across all of the assets we social or governance risk factors that, risks of listed corporates. manage globally. All of our investment if they occur, could cause an actual or • For private markets asset classes, ESG strategies are ESG risk-assessed, so a potential material negative impact risks are considered throughout the that investment teams can monitor ESG on the value of the investment. investment process and ongoing asset risks as part of the investment process, management activities. In many cases, although they do not necessarily actively In line with European regulation, we they are specifically screened along incorporate ESG risks and opportunities consider the sustainability risks and PAIs sustainability risk guidelines or by using into their investment decisions. of prospective and active investments. minimum exclusion lists, as defined by We apply portfolio and individual security • For publicly-listed asset classes, Allianz’s ESG Risk Framework. level analysis across all assets to ensure we have implemented a dedicated Further detail is given in our transparency on ESG risks and Principal tool to systematically monitor and Sustainability Risk Management Adverse Impacts (PAIs). Sustainability risk assess sustainability risks: portfolio Policy Statement and Principal factors can materialise along any of managers receive a warning Adverse Impact Statement. the three dimensions of ESG investing. message from the trading system We consider sustainability risks to be when investing in a security from potential drivers of 昀椀nancial risk factors an issuer with a sustainability risk, in investments, such as market price risk, so that they are aware of potential credit risk, liquidity risk and operational sustainability risks ahead of making risk, but they can also be drivers of the investment decision. Furthermore, market-wide and/or systemic risks (eg, we perform a regular portfolio climate change). We follow the EU SFDR screening of sustainability risks, de昀椀nition of sustainability factors and providing transparency to portfolio sustainability risks: managers on the sustainability risk profile of their respective portfolios. Allianz Global Investors Sustainability and Stewardship Report 2023 30

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.6 Sustainable investing categories Principle 4 7 31 We provide investment solutions AllianzGI’s product o昀昀ering with di昀昀ering levels of sustainability incorporation. Our product range caters to clients’ sustainability objectives and preferences. These categories also provide transparency on the Conventional ESG risk-focused Sustainability-focused Impact-focused SFDR characteristics of our products Objectives EUR 89bn EUR 199bn combined (which will evolve as the direction of Financial returns and active the SFDR is clari昀椀ed). risk management Objectives Objectives Objectives Financial returns and material E, Financial returns and Financial returns S and G risk considerations sustainability objectives and measurable and values sustainable outcomes Qualifying approach Qualifying approaches Qualifying approaches Integrated ESG SRI Best-in-class Impact (Art.9) KPI-based approach SDG-aligned: Multi Asset sustainability blend Fixed Income | Multi Asset | ESG score approach Private Markets (Art.9) SDG-aligned: Equity (Art.8) Classi昀椀ed as not sustainable Classi昀椀ed as sustainable Classi昀椀ed as Article Article 6* only Article 8* 8 or 9* Firm-wide exclusions Sustainable minimum exclusions Source: Allianz Global Investors, November 2023. ESG: Environmental, Social and Governance. SRI: Sustainable and Responsible ESG risk assessment: identi昀椀cation and consideration of sustainability risks and adverse impacts Investing. KPI: Key Performance Indicator. For illustrative purposes only. Exclusions apply to direct investments. ESG risk-focused category (also known as the integrated ESG investment approach) is not considered sustainable according Active stewardship: company engagement and proxy voting to EU Sustainable Finance Disclosure Regulation. Sustainable or impact investing private markets strategies apply the Allianz ESG Integration Framework exclusions. Allianz Global Investors supports the UN Sustainable Development Goals 31 Note that “sustainability-focused” and “impact-focused” are Allianz GIobal Investors product categories. Reference to a fund being within them does not (UN SDGs). *According to EU SFDR regulation. indicate that fund has a “Sustainability Focus” or “Sustainability Impact” label under the United Kingdom’s Sustainability Disclosure Requirements (SDR). Allianz Global Investors Sustainability and Stewardship Report 2023 31

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.6 Sustainable investing categories Principle 4 7 Increasing the transparency of • The second binding element consists approach that adds another risk analysis SFDR Article 8 funds of one of our qualifying approaches dimension to existing investment Fund naming guidelines While SFDR is a key pillar of the EU for our sustainability-focused or impact- processes and can be applied to any At the end of 2023, the European Securities sustainable 昀椀nance agenda, there are focused product categories. asset class. and Markets Authority (ESMA) outlined diverging perceptions among asset See chart on page 33 on our The portfolio manager is free to either new guidelines for fund names using ESG managers and regulators as to what “two binding elements” approach. divest or continue to hold “risky ESG” or sustainability-related terms. The aim is triggers the classi昀椀cation of Article 8. We apply the two binding elements to our companies in a portfolio, if the expected to ensure that speci昀椀c minimum standards We seek to go beyond the minimum sustainability-focused and impact-focused return justi昀椀es the risk. Active stewardship are adhered to when using terms such as regulatory requirements for our Article funds. They ensure credible sustainability activities (dialogue with investee “sustainable” or “sustainability”; in particular, 8 classi昀椀ed product range as part of delivery, which we take seriously in our companies and proxy voting) may products require a speci昀椀c link to sustainable our commitment to o昀昀ering investors a role as a sustainability shaper. This also also be considered to mitigate risks. investments. While we have taken action high standard of sustainable investment means the materiality of our harmonised Our investment professionals managing to ensure our products are in line with the products. The investment strategies we approach is in line with regulatory these strategies have access to an supervisory brie昀椀ng, the terms “sustainable” classify as Article 8 that are distributed objectives, and allows measurability increasing depth and breadth of ESG or “sustainability” encompass a broad range to retail clients will generally have and reportability for a high level risk perspectives for investee companies of funds across the industry with various two binding elements: our sustainable of transparency. through SusIE to identify and o昀昀er degrees of ambition level. Ahead of the minimum exclusion policy and one of our opinions on possible idiosyncratic risks. introduction of these guidelines, we have sustainable investment approaches. 02.6.1 ESG risk-focused32 initiated a strategic project to review our Each binding element is measurable ESG in private markets fund names. Within our ESG risk-focused category, we ESG is an increasing factor in all of our and reportable, providing transparency o昀昀er strategies that apply the integrated clients’ decisions. In private markets, our and clarity to our clients. We believe this ESG investment approach.This integrates focus remains on further enhancing our approach reduces the gap between what material ESG risk considerations into ESG practices in this area. Our Private sustainable products can achieve and the mainstream investment analysis, without Markets teams have delivered ESG expectations of clients. constraining the investment universe, and frameworks that set out their approach • The first binding element enforces requires the portfolio manager to provide to integrating ESG, and they continue to exclusion criteria related to weapons, a rationale for holding companies that make use of the tools provided by the coal, international norms and standards have been 昀氀agged for possible material Sustainability team, including sector (including the UN Global Compact) E, S and G risks. It is viewed across the frameworks. We also supported industry and tobacco. industry as an enhanced risk management initiatives to improve ESG standards. 32 ESG risk-focused category (also known as the integrated ESG investment approach) is not considered sustainable according to EU Sustainable Finance Disclosure Regulation. Allianz Global Investors Sustainability and Stewardship Report 2023 32

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.6 Sustainable investing categories Principle 4 7 AllianzGI applies two binding elements to its sustainability-focused and impact-focused funds 1st binding element 2nd binding element Sustainable minimum exclusion list One of the following approaches Two binding elements ensure credible sustainability Sustainability-focused Impact-focused delivery, which we take Article 8 Article 8 or Article 9 seriously in our role as a Private Markets SDG-aligned sustainability shaper SRI Best-in-class (ie, blended 昀椀nance) Weapons Coal Materiality of KPI – GHG intensity Private Markets impact our harmonised approach is in line with regulatory objectives Multi Asset sustainability blend Public Markets impact (ie, green bond) International Tobacco Measurability and standards KPI – SI share SDG-aligned reportability for high level of transparency and clarity ESG score approach Source: Allianz Global Investors, November 2023. For illustrative purposes only. Exclusions apply to direct investments. SRI: Sustainable and Responsible Investing. KPI: Key Performance Indicator. GHG: Greenhouse Gas Intensity. SI: Sustainable Investment. ESG: Environmental, Social and Governance. AllianzGI supports the United Nations Sustainable Development Goals (SDGs). Allianz Global Investors Sustainability and Stewardship Report 2023 33

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.6 Sustainable investing categories Principle 4 7 33 The general philosophy and process of • Social: We review the extent of issuers’ KPI-based approach 02.6.2 Sustainability-focused Our sustainability-focused product applying the SRI Best-in-class approach workplace health and safety, dialogue Our KPI-based approach targets o昀昀ering aims to achieve 昀椀nancial returns are identical across listed asset classes with employees and relationships with measurable, monitored and reported for clients while following sustainability globally. Portfolios use our proprietary suppliers. We consider general social KPIs to track ESG results that are objectives and values. Strategies in this ESG ratings to identify outperformers policy when assessing sovereigns, with signi昀椀cant enough to drive sustainability category apply a dual-layer approach: in each industry with regards to a focus on topics such as healthcare within the investment process of a a set of sustainable minimum exclusions, ESG performance. Our proprietary and education. portfolio. This approach can quantify the plus one of the following approaches: sustainability rating methodology spans • Business behaviour: We assess the sustainability feature of a portfolio and the di昀昀erent asset classes and is based relationships between issuers and regularly report outcomes. It allows us Sustainable and Responsible on four pillars: their supply chains, customers and to choose between two objectives. First, Investing (SRI) Best-in-class • Corporate governance: We assess communities along with the impact of to outperform a reference investment Our SRI Best-in-class approach extends corporate issuers’ internal structure their products and services on society universe or benchmark, or a de昀椀ned mainstream fundamental research by and governance to improve risk and respect for market regulations and threshold on at least one environmental analysing 昀椀nancially material and non- management, analyse audit and control fair business practices. These criteria do or social KPI. And second, to achieve material ESG factors. “Best-in-class” is a term mechanisms to prevent abuse and not apply to sovereign bond issuers. an ongoing year-on-year improvement used where investors select from the remaining mitigate risks, and analyse shareholder Speci昀椀c processes are introduced to consider against a chosen environmental or investment universe those corporate issuers rights and anti-takeover measures. For asset class speci昀椀cities. For instance, a social KPI. that perform better within their sector sovereign bond issuers, we evaluate tailored process for certain 昀椀xed income After implementing a GHG intensity with respect to ESG aspects. The portfolio systems used to prevent and fight products assesses sovereign bond issuers KPI, we introduced a sustainable construction is geared towards a superior ESG corruption and government capacity based on a proprietary emerging-markets investment share KPI according to EU quality by applying sustainable minimum to introduce necessary reforms. ESG framework that screens out the SFDR. This requires that products exhibit exclusions (negative screening) and best- • Environment: We assess issuers’ direct bottom 10% of countries on the E, S and a certain and meaningful share of in-class considerations (positive screening) and indirect environmental impacts, G pillars. Multi Asset products can be split sustainable investments while limiting the using scores on the investment universe. risks, approach to environmental into two categories: sustainable advanced exposure to issuers that signi昀椀cantly harm These ESG screens guide security selection responsibility and development (where more than 70% of assets need to environmental and/or social objectives. towards companies with best-in-class or of environmental solutions. We be sustainable) and sustainable complete Our goal is to continuously expand the list improving ESG quality compared with their assess sovereigns’ ability to address (where more than 90% of assets need to of available KPIs. peers, while excluding companies linked to, environmental issues based on their be sustainable). See Section 01.5. for example, coal, tobacco, weapons and political and legal frameworks. controversies that may bring signi昀椀cant 昀椀nancial and/or reputational risks. 33 Note that “sustainability-focused” and “impact-focused” are Allianz GIobal Investors product categories. Reference to a fund being within them does not indicate that fund has a “Sustainability Focus” or “Sustainability Impact” label under the United Kingdom’s Sustainability Disclosure Requirements (SDR). Allianz Global Investors Sustainability and Stewardship Report 2023 34

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.6 Sustainable investing categories Principle 4 7 34 • Measurement and management: a set of sustainable minimum exclusions, what we believe to be the most promising 02.6.3 Impact-focused Increasing numbers of investors are setting The impact will be measured and as well as the E, S and G factors of companies within a topic. SDG-aligned their sights beyond pure 昀椀nancial returns managed on a “best efforts basis” and investee companies being analysed. investing funnels capital towards – and even beyond ESG screening-based reported to validate each strategy. In addition, PAIs are analysed to avoid companies that we call “key enablers” – approaches, including risk management. AllianzGI’s impact investments can be companies with poor ESG practices and companies that are providing solutions We support investors who want to see a accessed through private markets (eg, those that cause signi昀椀cant harm. to the world’s greatest challenges. positive change for the planet and society private equity impact fund of funds) or AllianzGI applies a proprietary SDG In addition, we prefer to allocate to – measured against speci昀椀c goals, public markets (eg, green bonds). Impact- framework that maps company activities companies that provide goods or services such as the UN Sustainable Development focused strategies extend to our blended to speci昀椀c SDGs and checks for good that allow others to reduce or minimise Goals (UN SDGs) – while generating 昀椀nance approaches, where capital from governance and alignment with their footprint and therefore have a a 昀椀nancial return. commercial investors is combined with environmental and social objectives. multiplier e昀昀ect. They not only manage development capital and public sector AllianzGI’s SDG-aligned funds often follow their own footprints, but have a potentially Impact investing strategies funds to generate environmental and our thematic investment approach, built on much larger positive e昀昀ect on others. Our impact-focused strategies across social outcomes, especially in emerging a solid understanding of secular drivers and Green bonds public and private asset classes enable markets where commercial investors the ability to identify companies with long- As de昀椀ned by the International Capital clients to maximise their exposure bene昀椀t from de-risking. term potential. We believe these companies Markets Association, green bonds are to positive environmental and social have greater growth potential, are more any type of bond instrument where the outcomes de昀椀ned by three core beliefs: Impact-focused resilient to macroeconomic and political proceeds will be exclusively applied to • Intentionality: The intention of a investing in public markets volatility and bene昀椀t from regulatory 昀椀nance or re-昀椀nance, in part or in full, new strategy and its investments is to UN SDGs tailwinds. In 2023, we launched our 昀椀rst and/or existing eligible green projects, contribute to measurable positive social UN SDG-aligned strategies often adopt a systematic SDG-aligned global equity which are aligned with the four core and/or environmental value while thematic investment approach. We invest strategy, which provides our investors with components of the Green Bond Principles. delivering financial returns. in companies that exhibit a certain level the bene昀椀ts of broad diversi昀椀cation while Green bonds can support the pathway to • Evidence-based: Impact investing of contribution towards one or more addressing multiple SDGs. a more sustainable future by mobilising needs to use evidence and data, where of the UN SDGs. Our assessment is Seeking out key enablers of the SDGs capital markets to deliver environmental available, to drive intelligent investment both quantitative and qualitative, and We actively select companies based on bene昀椀ts. On a worldwide scale, green design, thereby increasing confidence a quarterly report highlighting SDG a combination of fundamental research bonds have proven to be a multifaceted that the investment would contribute to contributions on an individual strategy and the analysis of the contribution of model for success, attracting a growing social and environmental benefits. level is available. Our approach applies each company to the SDGs, seeking out number of investors seeking sustainable, low carbon investment opportunities. 34 Note that “sustainability-focused” and “impact-focused” are Allianz GIobal Investors product categories. Reference to a fund being within them does not indicate that fund has a “Sustainability Focus” or “Sustainability Impact” label under the United Kingdom’s Sustainability Disclosure Requirements (SDR). Allianz Global Investors Sustainability and Stewardship Report 2023 35

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.6 Sustainable investing categories Principle 4 7 Our green bonds strategy follows a than USD 1.1 trillion, according to the we expect investments to generate. outlining to the market how we de昀椀ne sustainable investment objective to Global Impact Investing Network.35 The typologies are outlined in our impact investing. mobilise capital to support the transition Our Private Markets Impact team aims to July 2023 white paper. We hope that, We align our approach to measuring and to a low carbon society, preserve natural deliver tangible real-world impact through by clearly de昀椀ning our expectations for managing impact with industry-leading capital and adapt to climate change. direct and indirect private equity and debt impact under each typology, we are both principles and standards. This approach favours the reallocation investments and blended 昀椀nance vehicles. shaping expectations for clients and of investments through a less carbon- In 2023, Matt Christensen and Diane Mak, intensive economy. Head of Impact Strategy, were named Key elements of the AllianzGI impact framework Read more about the Green Bond in New Private Markets’ inaugural list of Principles here. the top 50 global in昀氀uencers, who are s 2 . e A v s Our investment in green bonds unlocks i s shaping the future of sustainable private t e c s e j s b i i o n m t key enablers of energy and climate t e markets investing. c g p r a a a t c p e t i transition. For example, we invest in m n s i t i o g Measuring and managing impact h s d n companies that develop large o昀昀shore i e i l c 昀椀 b i c As capital is increasingly allocated to a s a i wind farms, implement solutions to lower t o n s n c E - e impact investing in private markets, m the impact of carbon-intensive freight . 1 a a measuring and managing impact in k n activity or promote the circular economy in d through recycling. a robust and credible way is essential. g De昀椀ned frameworks for doing so can Impact-focused be built into the investment process. investing in private markets The AllianzGI impact framework 4 . facilitates the due diligence and C Increased frequency of major selection of investments that contribute ont ent environmental events and social m inu em movements has raised awareness that to signi昀椀cant positive impact, as well as ar ous sur nt capital can – and should – play a role the measurement and management of ket lea ea me impact over the investment lifecycle. -bu rni g m ge in addressing environmental and social ildi ng an goin ana ng d 3. On m issues. As a 昀椀eld, impact investing has In 2023, we added sustainability and grown steadily in the past decade, with typologies, which complement the the total market size estimated at more existing impact framework by providing AllianzGI impact scoring system clarity around the types of impact that • Enterprise impact • Investor contribution 35 Global Impact Investing Network, Sizing the Impact Investing Market 2022, October 2022. Allianz Global Investors Sustainability and Stewardship Report 2023 36

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.6 Sustainable investing categories Principle 4 7 How impact investing strategy, due diligence, measurement and risk-return pro昀椀le for all stakeholders by on 昀椀nancing companies active in climate delivers change management. This enables co-creation blending public and development capital mitigation, climate adaptation and In developed markets, we direct 昀椀nancing across a speci昀椀c asset class, its portfolio together with commercial capital into risk- environmental sustainability-related towards companies and products whose managers and the Impact Investing team. tiered structures. sectors in Asia. core business is focused on providing Together with a third-party provider, Blended debt We are developing a pipeline of impact solutions to society’s most challenging we set up an impact data management During 2023, we announced a strategies in both private debt and equity, problems, while delivering targeted system to improve the collation, analysis USD 1.1 billion SDG Loan Fund. One of and across developed and emerging returns to investors. We leverage our and monitoring of the impact KPI data the largest blended funds in the market to markets. In 2024, we are launching an impact framework to identify, measure that we collect from underlying investees. date, it was jointly conceived by AllianzGI impact private credit strategy focused and manage impacts. The system helps inform engagement and FMO, the Dutch Development Bank. on developed markets, which will be In emerging markets, we use blended with underlying portfolio companies The fund bene昀椀ts from multiple layers of one of the few pureplay impact debt 昀椀nance to mobilise large-scale capital and fund managers in terms of impact de-risking, including a guarantee from the strategies. It will fully leverage our towards investments that are in line performance and enhances impact MacArthur Foundation, which enables us impact framework and we aim for it to be with the SDGs. This enables institutional reporting to clients. to mobilise large-scale institutional capital classi昀椀ed as EU SFDR Article 9. A result of investors to access emerging markets As investors are increasingly focused into the structure. the co-creation across our Private Credit through risk-tiered structures, many of on non-昀椀nancial returns and KPIs, our and Impact Investing teams, it will have which will have 昀椀rst loss protection to capabilities and strengths enable us to Blended equity both an environmental and social focus. deliver a potentially attractive risk-return embed impact considerations across The Emerging Market Climate Action Fund In addition, we are in the process and sustainability proposition. the investment cycle. (EMCAF) held its third closing at the end of developing an impact private equity We have progressed from being a 昀椀rst of 2023, with new commitments by the co-investment strategy that also focuses mover in blended 昀椀nance to delivering Increasing opportunity with German Federal Ministry for Economic on developed markets. a broader pipeline of credible impact blended 昀椀nance A昀昀airs and Climate Action represented We continue to build our blended 昀椀nance strategies across both emerging Blended 昀椀nance is a technique used to by German bank, KfW. A fourth closing o昀昀ering with a Paris-aligned debt fund and developed markets and across attract large-scale commercial capital is expected in March 2024, onboarding focused on emerging markets. We will asset classes. to emerging markets, with a focus on the UK government as an investor in the continue to engage with the broader sectors that contribute towards social and junior equity tranche of the fund and impact investing ecosystem, which Building our capability economic growth, such as infrastructure, bringing the EMCAF total commitment includes contributing to the development During 2023, we built up our impact energy and agribusiness. size to around EUR 385 million. We expect of the CFA UK Level 4 Certi昀椀cate in Impact investing personnel, adding private Blended 昀椀nance generally includes the 昀椀nal closing for this fund, which has Investing, alongside industry impact credit and private equity professionals a combination of commercial (or already made multiple investments, in convergence e昀昀orts. speci昀椀cally dedicated to impact private) capital in a senior position and Q4 2024. A recent investment is GEF strategies. We additionally have impact development (or public) capital in a junior South Asia Growth Fund III, a mid-market specialists with expertise in impact position. The goal is to achieve an attractive private equity growth strategy focused Allianz Global Investors Sustainability and Stewardship Report 2023 37

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 02.7 Looking ahead: sustainable investing Looking ahead: sustainable investing Research and data Product development Guiding clients Our priorities for the coming year are to: • Continue prioritising and framing • Extend the newly introduced KPI-based • Build out our risklab biodiversity focus topics in alignment with our approach by implementing additional analysis and advisory and expand 2024 outlook for key sustainability sustainability-related KPIs, such as risklab international engagement in investment themes. net-zero alignment. Japan, Taiwan, the Middle East and • Further evolve our issuer research to • Explore innovative climate transition South America. reinforce the interconnectivity with concepts across asset classes to address • Add more research to risklab’s Climate other teams. our clients’ preferences for tackling Navigator to measure asset class • Deepen the collaboration between climate change. volatility in different climate scenarios. the Research and Stewardship teams • Launch an impact private credit • Work on a framework to systematically to explore obtaining engagement strategy and an impact private advise investors on how to achieve insights from mainstream issuer equity co-investment strategy, net-zero and decarbonisation goals research more efficiently. both leveraging our impact framework, holistically across the asset allocation. • Expand the coverage of full which clearly identifies investment • Provide custom sustainable investment sustainability profiles in our data targets that contribute to measurable, solutions that look to address a platform, SusIE, and start an update positive impact. client’s specific investment issues, cycle for those published in 2022. • Engage with the broader impact for example by working to resolve • Further enhance our impact and ecosystem to contribute towards conflicts between financial and ESG reporting to our clients. industry standards. sustainability performance. • Continue to establish credible and more scalable ESG standards across our private market strategies. • Further evolve our sustainability- focused investment product offering. Allianz Global Investors Sustainability and Stewardship Report 2023 38

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations Principle 7 03 Active stewardship Promoting robust standards and strategic conviction through stewardship is key to our mission of addressing some of the world’s existing and emerging challenges. In 2023, we raised the number of targeted, thematic engagements, strengthened our engagement reporting infrastructure within our sustainability insights engine, and widened our escalation activities by pre-announcing our voting intentions.” Antje Stobbe, Head of Stewardship Allianz Global Investors Sustainability and Stewardship Report 2023 39

      2023 | Sustainability Report - Page 40

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.1 Developing our engagement strategy Principle 2 7 9 As part of our ambition to be a Thematic engagement: In 2023, we Collaborative engagement: 2023 highlights sustainability shaper, our engagement deepened and broadened our thematic During the year, we continued to work strategy takes an active ownership engagement approach aligned to our across our three sustainability themes and 481 active approach and follows an activist three sustainability themes – climate signi昀椀cantly stepped up our collaborative engagements sustainability orientation. In 2023, change, planetary boundaries and work. We joined or co-founded targeted (2022: 438) we signi昀椀cantly built out our thematic inclusive capitalism. The focus of our collaborative engagement initiatives that and collaborative engagement and thematic engagements was driven by resonate with our thematic focus and Engaged in 32 increased our engagement activity across topics where we observe particular expanded our activities within existing locations globally all listed asset classes, with a particular interest from our clients or increased initiatives. In 2023, Marie-Sybille Connan, focus on corporate credit. We also regulatory requirements, in particular Senior Stewardship Analyst, co-chaired (2022: 28) maintained our risk-based approach to net-zero alignment, biodiversity and the 30% Club Investor Group in France. 374 companies engagement for large holdings. human rights. We also co-founded the 30% Club Investor With our investee companies, we address For example, our climate change work Group Germany, which is co-chaired by engaged material topics of particular importance to included a sectoral net-zero focus on Antje Stobbe, Head of Stewardship, in its (2022: 355) us as a 昀椀rm. We de昀椀ne clear engagement large oil companies, utilities and inception year. We intensi昀椀ed our work objectives and then assess whether 昀椀nancials. Within the planetary with the Institutional Investors Group companies have implemented our boundaries theme, we developed our on Climate Change (IIGCC) Net Zero Source: Allianz Global Investors, as at requirements. When necessary, we escalate proprietary biodiversity engagement Engagement Initiative (NZEI), as well as 31 December 2023. the Principles for Responsible Investment concerns, for example by collaborating framework (BEF) and engaged with (PRI) Advance Coalition on Human Rights. with other investors, and now also by pre- 22 companies across di昀昀erent sectors. We are also a co-founding member of announcing votes and co-昀椀ling shareholder Under the umbrella of our inclusive Nature Action 100 (see page 58 for the resolutions at annual general meetings capitalism theme, our engagement focus complete list). (AGMs). We recognise the importance was on human rights in the supply chain, of co-昀椀ling to advance sustainability as well as gender diversity. Within these To scale our engagement and be more standards, despite declining levels of thematic focus areas, we prioritised e昀昀ective in the major markets in which support for shareholder resolutions in the engagements based on the size of our we have holdings, we introduced a tool US over the last two years. During the year, holdings per market or portfolio, and the to assess the legal framework for broader we therefore stepped up our activity and priorities of speci昀椀c clients or funds. collaborative engagement in 2023. have set out an internal process to facilitate See section 03.4 to read more about See section 03.5. co-昀椀ling. We expect to be able to report on our thematic engagements. concrete company engagement next year. Allianz Global Investors Sustainability and Stewardship Report 2023 40

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.1 Developing our engagement strategy Principle 2 7 9 Engagement across all listed asset We seek to communicate our stewardship general meetings and sustainability issues classes: The bedrock of our engagement approach externally to our clients that we identify as below market practice. activities comes from our heritage as and investee companies, for example, Engagements can also be triggered by an active equity manager. However, by publishing our convictions and controversies connected to sustainability in recent years we have increased our stewardship outcomes in thought or governance. 昀椀xed income engagement, facilitating leadership pieces or blog posts. This approach allows us to strike a good dedicated dialogues for our corporate Policy engagement complements balance between environmental, social credit strategies. our approach where we believe that and governance (ESG) risk reduction in In 2023, we worked intensively with our improved regulatory conditions and our portfolios and leading clients and 昀椀xed income engagement ambassador market standards could bene昀椀t our active companies on an inclusive and sustainable group, meeting regularly with portfolio stewardship work. The legal framework pathway to change. It also allows us to managers and credit analysts to for collaborative engagement in Germany set clear engagement objectives from the discuss and align on engagements is an example. outset. While our preference is to engage and coordinate engagement activity. See sections 03.5 and 03.6. investee companies con昀椀dentially, we are Our strategy includes enhancing the Risk-based engagement: Our risk- prepared to escalate to engage publicly engagement-speci昀椀c skills of our based approach remains the basis of our if we conclude that the con昀椀dential investment professionals through engagement strategy and focuses on the approach has gone as far as it can without dedicated training, which equips material sustainability or governance delivering progress and our objective them to work on more engagement issues that we identify. A larger share of would be best served by escalation. themselves. In 2023, this training reached these engagement meetings is dedicated See section 03.6. approximately 80% of our equity to preparing our voting decision at investment professionals. general meetings where our Global See section 03.2.1. Corporate Governance Guidelines guide Looking ahead our engagements. Targeting is closely In 2023, we worked on an enhanced related to the size of our exposure, strategy aimed at involving more portfolio whether per market or fund, or managers and analysts in engagement, considering the total value of investment. and integrating stewardship more broadly The focus of engagements is determined into investment strategy and positioning. by considerations such as signi昀椀cant votes We will roll out this strategy in 2024. against company management at past Allianz Global Investors Sustainability and Stewardship Report 2023 41

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.2 How we engage Principle 7 9 We apply a broad range of tools to our In 2023, we continued to work on data While our stewardship professionals relevant AllianzGI Investment team engagements, including one-to-one, clari昀椀cation requests with companies often lead engagements, members of members alongside members of the group or collaborative meetings with in line with regulatory requirements. the Research and Stewardship teams Research and Stewardship teams to make chairpersons, board members, senior This involved discussing sustainable frequently discuss material sector- engagement meetings as impactful and management, company secretaries and investment share and principle adverse speci昀椀c issues, thematic focus topics and productive as possible by combining heads of speci昀椀c functions, as well as impact/Do No Signi昀椀cant Harm in the analytical frameworks, eg, to evaluate insights from all critical parts of our written correspondence. context of the EU sustainability regulation. climate votes. We frequently include investment platform. We di昀昀erentiate between normal research In some cases, these interactions were and monitoring meetings as an active the starting point for a more thorough Collaborating across the investment platform to increase engagement impact manager, and engagements where engagement process. However, we do we actively seek to make an impact or not classify them as such; nor do we Engagement proposal initiated by Research or Stewardship analyst or portfolio manager target a speci昀椀c outcome. The latter are, include them in our engagement count, by default, classi昀椀ed and reported as underlining our conservative approach engagement meetings. Our overall impact to engagement reporting. Research form a view Stewardship discuss and align Portfolio is much broader than is re昀氀ected by the In 2023, our Research and Stewardship analyst analyst manager numbers reported as we also actively teams cooperated closely on our thematic engage through industry bodies and areas of climate change, planetary by conveying our stewardship stance to boundaries and inclusive capitalism, larger audiences at industry events. working alongside the Sustainability We continuously review our engagement Methodologies & Analytics team. Proxy Engagement typically Investment approach – both in terms of topics to be This level of collaboration enables us to Research voting via meetings/calls with decision engaged and the form of engagement have a more in-depth thematic or sectoral board members, C-suite – to re昀氀ect client demand, economic analysis and knowledge, which translates or experts and geopolitical trends and regulatory into e昀昀ective engagement. In particular, developments. Mounting climate change it allows us to compare company risks and our commitment to the Net Zero performance more rigorously across a informs Evaluation of the informs Asset Managers initiative (NZAMi) led us peer group and identify best practices and engagement: Outcome to step up our collaborative engagement laggards. Collaborative engagements are activities, for example with the IIGCC Net also helping to strengthen our capability Source: Allianz Global Investors. Zero Engagement initiative (NZEI). where it is needed. Allianz Global Investors Sustainability and Stewardship Report 2023 42

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.2 How we engage Principle 7 9 Our investment views are in昀氀uenced 03.2.1 Fixed income In addition to internal collaboration, we to develop credible transition plans, by the outcomes of engagements and engagement have continued to work with external accelerate transition activities, provide outcomes are linked to the proxy voting Our engagement activities apply to all organisations, such as the European appropriate climate-related disclosure process, forming a consistent stewardship public market activities, comprising equity Leveraged Finance Association and adequately respond to climate approach. All engagement results are and 昀椀xed income strategies globally. (ELFA), where we are members of its change risks. In 2023, we contributed shared via our collaborative research ESG Committee and have had board to the IIGCC Bondholder Stewardship and investment platform and can be In 2023, we expanded our engagement representation since 2023. Guidance, which provides corporate accessed by our teams globally. In 2023, activity for, and within, our Corporate We also continued to seek improvements bondholders with a foundational we developed and launched a dedicated Credit teams. Close to 5% of our in market practice, in particular around framework to enhance their climate engagement template within our data 37 engagements were recorded by 昀椀xed collaboration among investors within stewardship practices. tool, SusIE, which is accessible to all 36 income investment professionals. these asset classes. We participated For more information see: investment professionals. This built on the In several other cases, we combined the in working groups, looking at how IIGCC Net Zero Bondholder framework introduced in 2022 and allows expertise of the Stewardship, Equity and collaborative climate initiatives could Stewardship Guidance. more comprehensive recording of our Fixed Income teams in joint engagement increase focus on high-emitting private As an outcome of our work, we engagement activity, including outcomes meetings and shared the outcomes via companies, and sought to understand continued to strengthen our approach and evaluation. It also facilitates our collaborative investment platform. how ELFA could support future to engagements in 昀椀xed income and quantitative and qualitative reporting for The coordination of engagement activities engagement activity. collaboration across asset classes. At the our clients. This engagement template in 昀椀xed income is overseen by our 昀椀xed To shape change in market practice same time, we remain mindful that there is a cornerstone for the roll-out of our income engagement ambassador group. around 昀椀xed income engagement, should be a more nuanced approach to enhanced engagement strategy in 2024. Building on the engagement training for we joined the IIGCC Bondholder embedding sustainability in stewardship Our engagement approach is tailored 昀椀xed income held in Q4 2022, this group Stewardship Working Group in 2022. processes within 昀椀xed income, for example to di昀昀erent funds, asset classes also discusses speci昀椀c engagement Members work together to improve by taking into account time horizons, the and geographies. topics, as well as outcomes and potential bondholder stewardship practices in a nature of the underlying instrument and escalation strategies. way that encourages high-emitting issuers portfolio size. 36 Source: Allianz Global Investors, as at 31 December 2023. 37 Bondholders are not requested to take any speci昀椀c actions based on this framework. Allianz Global Investors Sustainability and Stewardship Report 2023 43

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.2 How we engage Principle 7 9 03.2.2 Emerging ESG outcomes in a speci昀椀c sovereign. We believe that EM sovereign In 2023, our ESG-related contacts with EM market sovereigns Over time, we have found that the EM engagement must adopt a long-term sovereign delegations included country Our Emerging Markets (EM) Fixed Income ESG framework helps us engage in more approach. Raising issues and monitoring visits to Central and Latin America, where team follows a speci昀椀c engagement tailored and deeper discussions with change or, at a minimum, establishing a we travelled to Guatemala, Panama, approach that uses an integrated the EM sovereigns in which we invest. rapport over ESG issues with sovereigns Costa Rica and El Salvador, and held calls risk factor modelling framework to Centring these discussions around reliable are worthwhile endeavours and in line with Uruguay and Jamaica. In the Middle assess non-昀椀nancial risks that may public data from reputable institutions with our 昀椀duciary duty towards our clients. East, we travelled to Saudi Arabia, Dubai, impair counterparty creditworthiness. helps us to conduct more meaningful For example, in areas such as 昀椀scal and Sharjah, Oman, Bahrain and Kuwait. Engagement with EM sovereigns is a key and objective engagement discussions. debt transparency, we often engage with We also held London-based roadshows and pillar of our investment process. Our EM In emerging markets, these discussions 昀椀nance ministries to better assess the virtual meetings with 昀椀nance ministries, debt Fixed Income (EMFI) investment process can otherwise be fraught with political 昀椀scal balance risks. management o昀케ces and central banks. fully integrates ESG considerations and economic uncertainties and lack of as set out in our EM ESG sovereign data access. It also allows us to raise ESG framework. This uses 20 publicly available issues that our clients care about and to Case study: Meeting with Brazil’s Sustainable Government team indicators across the three E, S and G clarify the standards that we consider essential for investing in a certain issuer In September 2023, we hosted Brazil’s government, since the Lula administration pillars from a variety of international in our sustainability-focused portfolios. Sustainable Government team. The Brazilian took o昀케ce. The target is zero illegal institutions and think tanks, including Finally, engagement also helps us, as team presented an ambitious transformation deforestation by the end of the decade. the World Development Indicators, investors, to gain insight into both the plan towards higher ESG standards Key measures to achieve this include World Resources Institute, United Nations, mechanics and the incentives systems at following the election of President Lula da 昀椀ning corporations that carry out illegal UNESCO, World Bank, Freedom House play in speci昀椀c sovereign policy areas. Silva. Its six pillars are sustainable 昀椀nance, activities, destroying equipment used and Transparency International, to We 昀椀nd that a collective and long-term research and development, bioeconomy, for deforestation and increasing the quantitively assess EM sovereigns. This is approach to EM sovereign engagement energy transition, circular economy and number of law enforcement personnel. complemented by qualitative analysis. is both important and rewarding. This has adaptation. Delegates also discussed the The government is also working on an Our EM ESG framework is public, with been our second year as a member of creation of a carbon-regulated market bill, agenda to improve living conditions updates periodically shared on our the Emerging Markets Investors Alliance which is expected to be approved in 2024. for indigenous populations who live in website. It is maintained and updated (EMIA), a pro-bono industry association During a discussion about Amazonian the Amazon. In November 2023, Brazil every six months by our Sustainability that gathers EM investors, NGOs and deforestation, the Brazilian launched its 昀椀rst sustainability-linked Methodologies & Analytics (SMA) team. think tanks to advocate for better ESG representatives stated that illegal bond. AllianzGI took part in the initial The EMFI team meets regularly with outcomes in the EM sovereign and deforestation had been reduced by bond tender. sovereign issuers and raises ESG corporate issuers that we invest in. more than 50%, relative to the previous topics for engagement, which helps us to understand the factors driving Allianz Global Investors Sustainability and Stewardship Report 2023 44

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.2 How we engage Principle 7 8 9 03.2.3 Selecting and engaging While we are not allowed to compel retail with fund managers fund managers to use our engagement In the context of engagement and fund- guidelines, we do ask for details on of-fund approaches, the research and proxy voting, the engagement process selection of fund managers is a major and portfolio composition. Our detailed focus for our Multi Asset team. Over the questionnaire looks at whether there is a last two decades, we have developed and proxy voting policy in place, its guidelines, enhanced our fund research capabilities whether proxy voting is done internally to independently and systematically select or delegated to an external provider, the most promising managers. We follow and how the engagement process a stringent process and collate 昀椀ndings in works. We request examples of previous a central shared database called MARS. engagement e昀昀orts. We continuously enhance our research For exchange traded fund (ETF) and selection process to adapt to changes strategies, we meet with providers on a in the regulatory environment and ful昀椀l quarterly basis and discuss the provider’s our clients’ requirements. As part of this, sustainable products and policies. This can we undertake deep and comprehensive be done by o昀昀ering input on the evolution due diligence that encompasses fund of sustainable screens and KPIs, and manager interviews and an exhaustive providing advice on which markets are questionnaire. Important considerations well served by sustainable products. such as investment philosophy, team The funds we recommend for investment and research capabilities, portfolio are regularly screened for compliance construction, and sustainability e昀昀orts with our standards, including are evaluated and compared to sustainability aspects. We continue competitive strategies. to improve and enhance this process Assessing sustainability capabilities by updating our questionnaire at and processes in a systematic way is least annually, or whenever there are crucial. When analysing a sustainable changes in the regulatory environment, strategy, we look at factors such as to o昀昀er our clients the most promising the engagement approach, including sustainable strategies. proxy voting, engagement reporting and transparency. Allianz Global Investors Sustainability and Stewardship Report 2023 45

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.3 Engagement in numbers Principle 7 9 In 2023, we engaged with 374 companies In 2023, we completed 85 climate on 481 occasions, mostly via virtual engagements related to our former Climate 38 engagement meetings. This is an almost Engagement with Outcome programme. 10% increase in engagements compared These engagements entailed speci昀椀c to 2022, on top of an approximate questions relating to the companies’ 50% increase from 2021 to 2022, climate strategy, incorporating governance, and re昀氀ects our continuous ambition planetary and social oversights. A total of to integrate stewardship outcomes into 25 of these were conducted through calls, the investment process. and the rest through detailed responses See case studies starting on page 50. with follow-ups, where necessary. They are Engagements covered 1,055 topics included within our engagement statistics. (2022: 996). We often engaged on more In addition, we signed or sent around than one topic per company, and the year- 240 engagement letters via collaborative on-year increase is driven by our continued engagement initiatives that we joined or reporting of more granular sub-topics. co-founded. They are not included within our engagement 昀椀gures. Continued expansion of our engagement activities in 2023 481 Engagements 438 299 374 Companies 355 engaged 238 51 Stewardship 38 outcomes 28 2023 2022 2021 Source: Allianz Global Investors, as at 31 December 2023. 38 Our Climate Engagement with Outcome (CEWO) was decommissioned in early 2023 as we evolved our approach to climate transition encompassing data and measurability using KPIs. Allianz Global Investors Sustainability and Stewardship Report 2023 46

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.3 Engagement in numbers Principle 7 9 Percentage of engagements per location Europe and UK Asia Paci昀椀c Americas Germany France Europe other Switzerland China and Hong Kong Japan USA 11% 10% 8% 10% 15% 11% 12% UK 10% Spain Italy Sweden 3% 2% 2% Taiwan Asia Paci昀椀c 4% other Denmark 2% Americas other 1% 2% Other 2% Source: Allianz Global Investors, as at 31 December 2023. Engagement by geography In Europe, we engaged most frequently The locations of engagements re昀氀ect with companies in Germany, France and the main markets we invest in and the size the UK. In Asia, we continued to expand Sustainable investing is evolving across the Asia Pacific of individual holdings in those markets our engagements, with a particular – both assets under management and focus on China, Hong Kong, Japan and region. Our strong presence here includes dedicated relative share of the holding. As such, Taiwan. We have a signi昀椀cant number sustainability expertise, enabling us to think both we target issuers globally, with a focus of portfolio managers in Asia and globally and locally in supporting our clients for a on Europe, the US and our major dedicated stewardship resources, and more sustainable future.” markets in Asia. We engaged in 32 have broadened and deepened our locations globally in 2023 (2022: 28). engagement approach in this region. Desmond Ng Head of Asia Paci昀椀c Allianz Global Investors Sustainability and Stewardship Report 2023 47

      2023 | Sustainability Report - Page 48

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.3 Engagement in numbers Principle 7 9 Engagement by topic Our engagement priorities per topic Engagement activities in 2023 covered a broad range of topics. In 36% of Social risks & opportunities Environmental risks cases, we spoke to companies about • Employee engagement, 18% 31% & opportunities corporate governance, business conduct diversity & inclusion • Climate change & GHG emissions and transparency issues – a similar • Human rights & community relations • Physical impacts of climate change percentage to 2022. Our increased focus • Labour practices, gender/ethnic 1,055 Topics • Biodiversity, deforestation & on environmental and social topics in line pay gap 1,540 Sub-topics water management with our three guiding themes continued • Employee health & safety • Environmental incidents to be evident, with 73% of engagements touching on either topic (up from 69% in 2022). Where we did not see su昀케cient Corporate governance Strategy & business model progress, or wanted to follow up on • Executive compensation 29% 10% • Supply chain management recent developments, we engaged more • Board composition/independence • Corporate strategy/purpose than once. This occurred with 21% of the • Corporate governance practices 12% • Product design, lifecycle companies engaged, slightly up from management & circular economy 19% in 2022. Other • Materials sourcing & efficiency Outcomes recorded • Transparency and disclosure We registered 51 stewardship outcomes • Capital management where companies took steps that we had • Business ethics explicitly referenced during engagements (2022: 38). Some cases involved multi-year List of sub-topics is not comprehensive. engagement. Executive remuneration Source: Allianz Global Investors, as at 31 December 2023. and governance issues were the focus in around 70% of these cases. Allianz Global Investors Sustainability and Stewardship Report 2023 48

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.4 Engagement outcomes Principle 7 9 In 2023, we deepened our work on thematic engagement across our three sustainability themes. We have been developing “engagement frameworks” based on thematic research to form the analytical approach for our engagement in areas such as biodiversity and human rights. They include questions for use in conversations with companies and enable comparisons and benchmarking across companies. The projects described on the following pages highlight a selection of our engagement work, which has been complemented by thematic engagement projects on plastics, transition metals and gender diversity, as well as additional net-zero oriented engagement work. Allianz Global Investors Sustainability and Stewardship Report 2023 49

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.4 Engagement outcomes Principle 7 9 03.4.1 Thematic engagement: Case study: Engaging Case study: Assessing climate change with utilities the climate preparedness As a member of the NZAMi, we have We engaged with eight utility companies of large banks committed to decarbonising our using Climate Action 100+ benchmark As we acknowledge the sector’s central investment portfolios, while making sure criteria, with the objective of being role in the transition, we continued our that investee companies are playing an comfortable with their transition work to assess the climate preparedness active role in energy decarbonisation pathways. This 昀椀rst year of engagement of large banks. The banking sector is and aiming to thrive in this transition. provided several important insights. First, much more exposed to climate change Companies’ transition pathways are there is no “one size 昀椀ts all” approach risks through its 昀椀nancial activities than therefore a particular focus of our for utilities due to the diversity of their its operations, and has much to gain from thematic engagement, which also re昀氀ects business models, which span power 昀椀nancing a green transition that supports the increasing importance clients place generators, municipals, pure network, an economic transition. As scrutiny on portfolio companies’ decarbonisation pure renewable energy and integrated around climate transition strategies targets. In 2023, we had 211 direct players. Second, politics and regulations increases, structured engagement We published a research paper to conversations with companies about have a critical in昀氀uence on the direction has a pivotal role to play in assessing explain our approach to climate climate change (2022: 217). of travel, something that was notable banks’ readiness to meet this challenge. action in the banking sector, and Within our climate thematic engagement given the focus in 2023 on energy We updated our bespoke research to share our insights more widely stream, we continued our engagement security and a昀昀ordability. Finally, all framework for analysing banks’ climate with other banks. projects on oil and gas majors and companies highlighted the importance strategies and guided our voting to 昀椀nancials. This activity also informs of scaling up investments in the grid to provide a broader assessment of climate Climate change: our climate-related votes at general achieve net-zero plans – the lack of grid performance. Combining proprietary banking on a greener future? meetings. We also started a new thematic connections is a growing bottleneck for sustainability research with engagement engagement project on the utilities sector, the development of renewables. has given us higher levels of conviction which we consider key to the energy In the future, we will continue to monitor with respect to the climate preparedness transition. This project targeted equity and whether investee companies are on of banks and related voting decisions. 昀椀xed income holdings and bene昀椀ted from the right path by 2030 and can provide the contributions of our Equity Portfolio evidence of their complex, long-term Management and Credit Research teams. transition plans. We will also continue to monitor their coal exit plans. Allianz Global Investors Sustainability and Stewardship Report 2023 50

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.4 Engagement outcomes Principle 7 9 03.4.2 Thematic engagement: Case study: Biodiversity Case study: Engaging with a biodiversity at a US agrifood company telecom company on legacy Pressure on the private sector to We engaged a major US agrifood lead-sheathed cables accelerate the protection of nature and company to discuss its approach to We engaged a US telecom company biodiversity has increased since the biodiversity. We had previously engaged following press coverage alleging that COP 15 Global Biodiversity Framework with the company on climate and lead-sheathed underground cables dating 39 (GBF) agreement. As an investor with believe that addressing biodiversity back to the origins of the industry had high awareness of biodiversity loss, will help its climate strategy to be more been causing lead contamination in sites AllianzGI believes engagements with comprehensive. The company recognises and among workers. The engagement companies is essential to scope the risks the importance of biodiversity and has was initiated and led by the Fixed Income and opportunities and drive change. started to assess it in all of its locations, Research team, who consider this issue We started our biodiversity engagement as well as along its supply chain. We also to be potentially material to investment. in 2022 and built out our proprietary discussed deforestation and regenerative The engagement allowed the team to engagement framework in 2023. agriculture in depth to understand how form an initial assessment on the extent We summarised our biodiversity The sector-speci昀椀c nature of biodiversity the company takes action to manage of potential 昀椀nancial implications and the engagement framework and means there is no formulaic approach. biodiversity. We will follow up on the need for follow-up. expectations of companies in our Investors will need to understand the progress of its biodiversity assessment, thematic paper. biodiversity issues associated with di昀昀erent as well as its approach to deforestation business activities to be able to assess the and use of regenerative agriculture. De昀椀ning the rules of engagement performance of investee companies. To this to protect biodiversity. end, we identi昀椀ed priority biodiversity issues to discuss with investee companies during engagements, as set out in our biodiversity engagement framework. 39 Convention on Biological Diversity, Global Biodiversity Framework Agreement, 2022. Allianz Global Investors Sustainability and Stewardship Report 2023 51

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.4 Engagement outcomes Principle 7 9 Priority biodiversity issues and Biodiversity engagement framework relevant KPIs Priority Relevant sectors KPIs for assessment Biodiversity loss driver addressed The engagement framework illustrates issues our expectations of investees in 昀椀ve Regenerative Agriculture & food, food retailers • Target and capital allocation Habitat loss/land use change; areas: sound governance, thorough agriculture • Metrics to measure regenerative agriculture climate; pollution assessments and metrics, strong • Percentage of the supply chain/goods sourced from commitment, comprehensive actions and regenerative agriculture transparent disclosure. • Incentives for farmers to adopt regenerative agriculture We discussed biodiversity in engagements Deforestation Companies with agricultural • No-deforestation commitment Habitat loss/land use with over 50 companies in sectors that commodities sourcing • Percentage of sustainably sourced commodities change; climate have a high impact or dependency on (eg, wood, palm oil, soy, • Percentage of supply chain or commodities sourced cocoa, rubber, beef) that are covered by a traceability system biodiversity, including agrifood, paper and • Suppliers with no-deforestation commitment forestry, utilities, energy, chemicals, metals • Engagement with suppliers and mining. Water Food & beverage, metal & • Water risk assessment Resource depletion; pollution mining, textile, chemicals, • Percentage of operations in water stress areas water utility • Water consumption reduction targets • Speci昀椀c water management in water stress area Chemical Chemical, packaging, • Reporting pollutants Resource depletion; pollution and plastics construction, retail, • Reduction targets for pollutants pollution consumer goods • Recycling and reducing plastics with targets Land Metals & mining, energy, utilities, • Measure of biodiversity impact around land Habitat loss/land use change footprint construction engineering under operations • Location and areas of land disturbed • Resource depletion; pollution • Location and areas of land restored and conserved Source: Allianz Global Investors, 2023. Allianz Global Investors Sustainability and Stewardship Report 2023 52

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.4 Engagement outcomes Principle 7 9 03.4.3 Thematic engagement: 1. Human rights policy: a clear 5. Communication and reporting: human rights commitment regarding the respect a full disclosure on human A combination of global crises, high-pro昀椀le of human rights at the company and rights due diligence, including worker rights violations and regulatory across the supply chain, with a clear results of audits and remediation change has put companies in the spotlight governance structure. measures implemented. in relation to ensuring workers are protected 2. Risk assessment: a detailed and For each of these 昀椀ve pillars, we throughout the supply chain. In 2023, quanti昀椀ed risk assessment by country, developed relevant questions that all we made human rights a particular focus organisation, activity and product. companies should be able to answer. topic of our engagement and will continue 3. Prevention, mitigation and remediation They create a framework through to prioritise it in 2024. measures: these measures should be which companies can demonstrate Our proprietary framework for engaging clearly identi昀椀ed in the risk assessment. the materiality of human rights in their with companies on human rights in supply 4. Performance tracking and monitoring: supply chains. chains draws from the OECD due diligence periodic audits of human rights guidance for responsible business performance using speci昀椀c KPIs. We summarised our engagement conduct and is based on the 昀椀ve pillars approach and expectations of of human rights action that we look for companies on human rights in companies: issues in supply chains in our thematic paper. Sample questions from our human rights engagement framework Human rights – the weakest link Human rights policy Risk assessment Prevention, Performance tracking Communication in supply chains? mitigation and and monitoring and reporting remediation measures What does the company Has the company Has the company Has the company To what extent is the say publicly about its identi昀椀ed and disclosed integrated human implemented company transparent commitment with respect its actual and potential rights issues into its risk mandatory audits regarding its human to human rights? human rights risks by management and within for all new suppliers? rights objectives type and correspondent suppliers’ contracts? and outcomes? risk level? Source: Allianz Global Investors, 2023. Allianz Global Investors Sustainability and Stewardship Report 2023 53

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.4 Engagement outcomes Principle 7 9 Case study: Labour issues in Case study: Assessing the electronics supply chain labour practices in China’s In response to controversies concerning Xinjiang region forced labour issues in its supply chain, Following allegations that some we engaged with a Japanese electronics European car-makers were linked with company on its governance and policies forced labour in China’s Xinjiang region, around the 昀椀rst three pillars of our we engaged with one of the companies. human rights framework. During our The goal of the engagement was to discussion, we asked the company to encourage the company to carry out an formalise the review of its human rights independent audit of its Xinjiang plant, policy and to provide more disclosure to credibly demonstrate that it was not around its risk assessments. Although this employing forced labour. Several months engagement demonstrated that the after the engagement, the car-maker company had su昀케cient processes disclosed that its independent audit in place, we took the view that they had found no evidence of forced labour. were not su昀케ciently formalised and We appreciated the company’s progress, highlighted this. We will monitor despite the limited scope, and asked it the company’s progress in a follow- to repeat the assessment more regularly up conversation. in the future. This dialogue was of particular bene昀椀t to our 昀椀xed income holdings, and the credit analyst and portfolio manager were closely involved in the engagement. Allianz Global Investors Sustainability and Stewardship Report 2023 54

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.4 Engagement outcomes Principle 7 9 03.4.4 Increasing • We focus on both ESG risk-based engagement in Asia engagements and thematic In 2023, we saw growing interest from engagements, such as biodiversity in the clients in our active stewardship practices food and agriculture sector or climate in Asia, where companies play a growing engagements with banks. role in global supply chains and evolving • Our deep coverage of major Asian regional regulation is embedding locations includes mainland China/ sustainability in corporate policies and Hong Kong, Japan, Taiwan, South Korea practices. With a strategic focus on Asian and South-East Asian countries. markets, our Stewardship team works • We engage bilaterally with investee with local investment teams to further companies and collaboratively through strengthen engagement with our core global initiatives such as CA100+ or the holdings, pursuing multi-year dialogues PRI Advance coalition on human rights. that target tangible outcomes: • We actively track policy and regulatory developments to strive for targeted and time-bound outcomes. Allianz Global Investors Sustainability and Stewardship Report 2023 55

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.4 Engagement outcomes Principle 7 9 Case study: Social risks at a Chinese metals and mining company Case study: Assessing Case study: Nature-related a bank’s portfolio performance at a Chinese Owning and operating several mine sites and actively implement third-party social decarbonisation strategy dairy company globally, a Chinese metals and mining audits. By the year-end, the company had Given their materiality and impacts, We have been engaging with a company is highly exposed to social risks. established a dedicated board committee, the portfolio decarbonisation strategies leading Chinese dairy company on We engaged with it on several occasions led by the chairman, and was overseeing of major banks have been a focus in nature-related topics since mid-2022 during the past two years, in the form sustainability with a priority on human Asia. We have been tracking the climate because of its in昀氀uence on the industry, of bilateral engagements, collaborative rights and community issues. It developed strategies of one Japanese bank since upstream suppliers and downstream engagements, on-site visits, and by nine social-related policies and is making 2022, and after it was subject to a customers. During several discussions, hosting company board members at good process with completing social audits climate-related shareholder resolution at we conveyed global best practices our o昀케ces. at more than 昀椀ve mine sites globally, with a its AGM, we engaged with the company and asked the company to improve on We conveyed our expectations and advised commitment to transparency. to assess its progress and to inform our company-wide policies and sustainable on how to establish top-down governance voting decision. We noted that the bank sourcing, as well as the disclosure of on social risks, introduce targeted policies had made progress in several areas: biodiversity topics. It is encouraging to new sustainability KPIs linked to board 昀椀nd that the company has established a members’ compensation are on track; dedicated forest protection policy with it is committed to publishing mid-term 2030 deforestation-free commitments decarbonisation targets on eight key and committed to publishing a TCFD- 昀椀nanced sectors, as recommended by aligned biodiversity report and joining the Net Zero Banking Alliance (NZBA), the Roundtable on Sustainable Palm Oil by October 2024; and it also plans to (RSPO). This progress has been re昀氀ected increase its sustainable 昀椀nance targets. in an external ESG rating upgrade that We appreciated the bank’s climate makes the company one of the best progress, robust implementation and performers in China. We will continue our demanding ambitions. We therefore dialogue and monitor outcomes in the supported the management’s coming year. recommendation to vote against a shareholder resolution at its AGM, and will follow it up in the coming year. Allianz Global Investors Sustainability and Stewardship Report 2023 56

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.5 Collaborative engagements Principle 7 10 Collaborative engagement with other 30% Club Germany Investor Group The 30% Club France Investor Group Nature Action 100 investors increases our impact when We stepped up our engagement activities We continued our work on the 30% Club Launched in September 2023, Nature shaping pathways to a more sustainable on gender diversity. Part of this was France Investor Group as co-chair. In this Action 100 (NA100) is a global investor future. In some cases, it is the most our co-founding in October 2023 of capacity, we engaged with the human engagement initiative that drives e昀昀ective way for AllianzGI to achieve the 30% Club Germany Investor Group, resources o昀케cer of a materials company, corporate action to reverse nature loss engagement objectives for our clients. together with 昀椀ve other asset managers. who is also a member of the executive in line with the UN Global Biodiversity It allows us to reach a larger set of our The Group aims to increase gender committee, to understand whether the Framework. We joined NA100 as a portfolio companies by joining forces with diversity on management boards and company’s gender diversity strategy will founding participant and use it to other investors, and is also important among senior executives, as well as ensure equal career pathways for men enlarge our biodiversity engagement where we have major concerns, but only improve the pipeline of female talent. and women. In a sector where women outreach and collaborate with our peers small holdings in investee companies. We consider this an important initiative form just 23% of the workforce, we learned to advance biodiversity-related practices While we still led the majority of our for our home market, as German that the company has embedded gender and reporting with investee companies. engagements ourselves in 2023, we companies signi昀椀cantly lag their wider diversity in its strategy, and that the We have signed engagement letters for signi昀椀cantly expanded our collaborative European peers when it comes to female concept is both embraced by leadership 93 companies, re昀氀ecting our equity and engagement activities during the year representation at executive level. We are and “lived” by the workforce. 昀椀xed income holdings across the 100 and led or participated in 22 collaborative co-chairing the initiative in its 昀椀rst year. We welcome the fact that the company target companies. We are part of the engagement meetings. We increased As a 昀椀rst step, the Group sent letters to all supports female managers as potential engagement teams for three companies our memberships in various initiatives to DAX 40 and MDAX40 companies to raise candidates to join the boards of that will be engaged with in 2024. increase our impact in line with our pivotal awareness of the engagement agenda. subsidiaries and builds a pipeline of As with Climate Action 100+, NA100 sustainability themes. This involved co- Engagement meetings will be scheduled female executives. We will continue plans to publish a benchmark analysis founding and joining new engagement in 2024. engaging with the company to monitor of target companies. We have provided initiatives, intensifying our work in others progress and compliance with the feedback on the consultation for the and forming ad-hoc coalitions, as needed. Rixain Law, which sets quotas for female NA100 benchmarking methodology Some initiatives that we co-founded or representation in leadership positions based on insights from our own research expanded are as follows: at large corporations. This remains a and engagements. challenge given the current composition of the company’s workforce. 40 The DAX 40 is a stock market index consisting of the 40 major German blue chip companies trading on the Frankfurt Stock Exchange. MDAX includes the 50 Prime Standard shares that rank in size immediately below the companies included in the DAX index. Allianz Global Investors Sustainability and Stewardship Report 2023 57

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.5 Collaborative engagements Principle 7 10 IIGCC Net Zero Engagement Initiative (NZEI) Legal framework and policy We joined the IIGCC NZEI to broaden engagement in Germany our reach with respect to our climate In our home market of Germany, engagement activities. The NZEI initiative collaborative engagement is still in extends the scope of engagement targets an emerging state due to a regulatory beyond Climate Action 100+ companies. environment that is not clearly de昀椀ned We supported around 60 letters sent in relation to the implications of jointly with other investors to our portfolio “acting in concert”. This means there companies. In addition, we participated is a certain degree of uncertainty in three engagement groups with other among asset managers and owners investors to challenge companies on their as to the conditions under which they progress towards net-zero targets. may cooperate in engagements. Full list of collaborative engagement We continued policy work to seek initiatives in which AllianzGI is active: clarity on this topic in 2023 via the • 30% Club France Investor Group Ministry of Finance’s Working Group on Sustainable Finance. • 30% Club Germany Investor Group • AIGCC • Climate Action 100+ • Ceres Food Emissions 50 • Emerging Markets Investors Alliance • FAIRR • IIGCC • The Investor Forum • Nature Action 100 • PRI Advance coalition on human rights Allianz Global Investors Sustainability and Stewardship Report 2023 58

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.6 Industry engagement and commitments Principle 4 7 10 Recent years have seen a continued EU Platform on Sustainable Finance Industry consultations and other Taskforce on Nature-related increase in both sustainable 昀椀nance Together with Allianz, we are a member of policy engagement activities Financial Disclosures (TNFD) regulation and the number of industry- the EU Platform on Sustainable Finance, We engaged with national and In 2023, we took several steps to reinforce wide sustainability initiatives. an advisory body to the European international regulators, policy-makers our commitment to protecting biodiversity. This further underlines the recognition Commission since 2021. The platform and politicians on topics ranging from In May, we became a member of the that market and systemic sustainability assists the Commission in developing stewardship and net-zero commitments TNFD Forum, re昀氀ecting our conviction risks need to be addressed. We support its sustainable 昀椀nance policies, notably to regulatory framework consistency, that it can become a central framework for this development, working to proactively the development of the EU Taxonomy implementation timelines and ESG ratings. biodiversity. As part of our membership, shape industry initiatives and sustainability Framework. We particularly contribute Through these engagements, it is our we collaborate with other TNFD members standards. Our advisory roles in relation to the work of the new Subgroup 1 on aim to promote continued improvement to support systemic progress on planetary to sustainable 昀椀nance regulation usability and data, which advises the EU of the functioning of 昀椀nancial markets, boundaries and biodiversity concerns – for exemplify our commitment. We have Commission on (i) the usability of the EU with a special attention to sustainability. example, by shaping new developments embraced new industry initiatives that Taxonomy, (ii) the usability of the wider For example, we are active in the Eurosif around nature-related 昀椀nancial are critical to our endeavours while sustainable 昀椀nance framework and (iii) SFDR Advisory Group. One major disclosures and impact measurement. discontinuing our involvement in others, data science. outcome of this group was the response GFANZ Asia Paci昀椀c Network thereby sharpening our focus on the most We are part of the 昀椀rst subgroup, which to the European Commission’s SFDR L1 To further strengthen our aspiration impactful sustainability e昀昀orts within provided the Commission with a report consultation. The chair of our internal to shape sustainability in Asia Paci昀椀c, our industry. on a compendium of market practices Sustainability Governance Committee AllianzGI joined the GFANZ Asia Paci昀椀c in 2023. Leading the group for input also chairs the Sustainable Finance Network in 2023, which supports the from investors, we also coordinated the Committee of the German Investment expansion of net-zero 昀椀nance in Asia- response to the European Supervisory Fund Association BVI. Through our Paci昀椀c and helps to accelerate the Authorities’ consultation on a review of membership of the Asia Investor Group on region’s transition to a net-zero economy. SFDR’s technical standards, as well as the Climate Change (AIGCC), we collaborated The initiative enables us to keep pace EU Commission’s review on the general on a consultation on the Monetary with market developments around the SFDR framework and its implications Authority of Singapore’s Guidelines on transition of the economy in the region. for and interactions with the broader Transition Planning. These guidelines Given the region’s signi昀椀cant economic Sustainable Finance Framework. are designed to establish clear growth, energy consumption and carbon The current platform’s mandate runs expectations for 昀椀nancial institutions, emissions, the Asia Paci昀椀c Network plays a until Q4 2024. ensuring they develop robust transition crucial role in addressing climate change. planning processes. Allianz Global Investors Sustainability and Stewardship Report 2023 59

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.6 Industry engagement and commitments Principle 4 7 10 Japan Sustainable Investment Forum Task Force on Climate-related In 2023, AllianzGI also became a member Financial Disclosures (TCFD) of the Japan Sustainable Investment The TCFD was established to improve Forum (Japan SIF), which is dedicated and increase reporting of climate-related to promoting sustainable investment 昀椀nancial information. As a signatory, practices in Japan. It serves as a platform we have has actively reported on our for investors, 昀椀nancial professionals approach to climate change and related and other stakeholders interested in risks since 2019. By publishing TCFD integrating ESG considerations into their reports, we highlight our commitment to investment decisions and corporate transparency, showcasing how we assess, practices. Japan SIF is part of a global manage and mitigate climate-related network of Sustainable Investment Forums risks and opportunities. Ultimately, we (SIFs) that work towards the development, remain convinced that TCFD-aligned understanding and advancement of practices contribute to a more resilient sustainable and responsible investment and sustainable global 昀椀nancial practices across di昀昀erent regions system, bene昀椀ting clients, investors and countries. and the planet. A complete overview of AllianzGI’s initiatives and memberships can be found in the appendix of this report. Allianz Global Investors Sustainability and Stewardship Report 2023 60

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.7 Escalating engagement concerns Principle 7 11 In our engagements, companies are input from the board on matters of • Joining collaborative engagement For 昀椀xed income holdings, escalation tools not always adequately responsive to concern. If we form the impression that initiatives co-ordinated by investors, are, by nature, more limited as they do concerns raised or their actions do not direct interaction has been unsuccessful, associations and other organisations not extend to actions taken in the context give due consideration to the interests we may decide to follow up in writing to seeking to address market or industry- of shareholder meetings. However, if we of minority shareholders. If we conclude the board. wide concerns. In all cases we retain have holdings in both equity and 昀椀xed that a substantial portion of our concerns While we vote against certain agenda full discretion to exercise our rights, income funds, we may lead escalation cannot be resolved through standard items consistently in line with our voting including voting. measures across asset classes to be interactions with investee companies, policy, in some cases we vote against • Expressing concerns through advisers more e昀昀ective. and we believe that an engagement has resolutions at shareholder meetings as to the company, for example, in merger In 2023, we decided to pre-announce failed against the pre-de昀椀ned objective, a means of escalation. For example, and acquisition (M&A) situations. votes for the AGMs of three companies we consider escalation trajectories. we hold directors accountable if we do • Pre-announcing our votes – thus for the 昀椀rst time. Pre-announcing our Our decision on escalation depends on not consider a climate strategy ambitious making our voting decision public voting intentions re昀氀ects an escalation the development of the engagement to enough to align with the Paris Agreement prior to the AGM. around themes that are important to date. We take into account the nature and goal of keeping the global temperature • Co-filing/filing resolutions at us, and where our stake or engagement magnitude of the unresolved concerns, the increase well below 2ºC; if we observe shareholder meetings – as a way of experience means escalating in this relevance of our holdings in certain funds that companies are not responsive to enhancing key engagements. manner is appropriate as part of an and considerations around the scope to shareholder concerns with respect to active sustainability orientation. It helps to escalate to a more senior level within climate; or if management deviates • Reducing or exiting our investment draw the attention of the market, clients the company. signi昀椀cantly from their climate strategy position when appropriate (any and other companies to a particular Initially, escalation typically involves without consulting shareholders. decision to exit an investment position issue or resolution in line with our pivotal requesting additional meetings with We prefer to engage directly with is taken at a portfolio level). sustainability themes. For the same management. We could seek more companies. Where direct engagement We consider making public statements reason, for the 昀椀rst time, we co-昀椀led a intensive dialogue by requesting to does not progress satisfactorily or where in respect of individual companies as a shareholder resolution in 2023. speak with non-executive directors or the our shareholding is insu昀케cient for an last resort, when all other channels of See also section 03.1. board chairperson. We prefer to address e昀昀ective escalation in our own right, we dialogue have been exhausted. matters of concern directly with the board consider other options. These may include: We apply this approach broadly across chairperson, lead or senior independent • Forming ad-hoc coalitions with other our holdings globally, although portfolio director or other non-executive board institutional investors on matters considerations and local practice may members. This provides direct unmediated of concern. a昀昀ect our decision. Allianz Global Investors Sustainability and Stewardship Report 2023 61

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.7 Escalating engagement concerns Principle 7 11 Demonstrating active stewardship across Case study: Pre-announcing Case study: Exiting our major sustainability themes our votes position due to insu昀케cient As part of our continued engagement risk oversight Climate change with a US oil and gas company, we met Having been invested in a renewable Supported shareholder the company’s sustainability lead and energy company for several years, a proposal regarding climate Chevron senior advisor within its ESG engagement number of governance issues became action transition plan at team. It was a group meeting for the evident, which led to pro昀椀t warnings and 2024 AGM company to hear investor perspectives signi昀椀cant impairments. Engaging the from Europe and understand investor management team led us to believe views. A wide variety of topics related that the company’s risk management to climate change and the transition processes had not been working as Planetary boundaries strategy were discussed, including Scope one would expect, including a lack 3 targets. The company’s position was of board oversight on the matter. Supported shareholder Glencore some distance away from our view as Following additional research into proposal regarding climate a European investor. Unconvinced that the reasons for these developments, action transition plan at the company was likely to develop a we arrived at the conclusion that the 2024 AGM transition approach consistent with our company had not yet taken su昀케cient expectations, we decided to escalate by measures to prevent such incidents pre-announcing our intention to support from occurring in the future. As a result, Inclusive capitalism a shareholder resolution that requested we decided to divest our holdings in Supported shareholder the company to reduce its Scope 3 certain funds. Starbucks GHG emissions.41 proposal regarding assessment of workers’ rights commitments 41 Greenhouse Gas Protocol, Corporate Standard, 2024. Allianz Global Investors Sustainability and Stewardship Report 2023 62

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.7 Escalating engagement concerns Principle 7 11 Advancing thematic and collaborative engagement Case study: Escalating through collaborative engagement We had engaged with a steel-producing Following an introductory meeting company on a variety of topics, including between the investors and company decarbonisation projects, investments in representatives responsible for the topic renewables, the Science-Based Targets on both executive and management initiative (SBTi) and health and safety committees, we sought to better issues. While we are satis昀椀ed with the understand the drivers for the most recent status of its decarbonisation investment incident, as well as wider background on plan, which is well on track to deliver its health and safety governance processes. 2030 decarbonisation target, we continue Our expectation is that a full review of the to see the information given on reasons company’s safety management systems for fatality and accident frequency as will be undertaken. We intend to follow unspeci昀椀c and insu昀케ciently transparent. up once this has been completed to This lack of clarity also applied to remedial understand the improvements that will measures taken. We therefore decided be implemented. to initiate a collaborative engagement and convened a group of like-minded investors to discuss health and safety, given insu昀케cient prior responses, continued fatalities/incidents and perceived lack of traction in one-to-one meetings. Allianz Global Investors Sustainability and Stewardship Report 2023 63

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.8 Exercising our voting rights Principle 7 11 12 Exercising voting rights at shareholder Our focus issues for proxy voting Select changes to our Global Corporate Governance Guidelines in 2023 meetings is a 昀椀duciary responsibility to include the election of board directors, Issue New policy Reason for the change our clients and a core part of our role as executive compensation, capital-related Climate Vote against Chair of Sustainability Strengthen our approach on an active investor. It allows us to have a authorisations and the appointment of Committee/Strategy Committee/ climate voting and extend it to say on some of the most important issues external auditors. Other important voting the Board (as applicable) of holding directors accountable if a昀昀ecting the long-term development of topics include climate change, workforce CA100+ companies in the EU/US companies in high-emitting sectors investee companies. diversity, labour rights, political donations if no GHG reduction targets/TCFD do not have climate transition and lobbying activities. disclosure in place (as of 2024). plans in place. We apply proprietary corporate Ethnic diversity Vote against Chair of Nomination More consistent approach 2023 highlights Committee or Chair of the Board if on ethnic diversity across governance guidelines across our holdings board does not have at least one relevant markets. globally. We put great e昀昀ort and care director with an ethnic minority Voted at 9,137 into developing in-house views and background (UK and Canada). shareholder meetings. positions on corporate governance and ESG KPIs in Vote against remuneration Expectation for companies proxy voting matters. Our voting decisions remuneration policies without ESG KPIs (EU/ to set proper sustainability- are informed by in-depth research, large company). related incentives. We opposed 23% analysis and engagement with investee of all management resolutions. companies, which we often conduct over Voting on shareholder proposals is a progress. In 2023, we co-昀椀led a resolution several years. Detailed proxy voting key part of our stewardship programme. for the 昀椀rst time. We opposed 41% policies help shape our voting decisions. Shareholder proposals o昀昀er companies Our goal is to vote at the shareholder of all votes on remuneration. an important insight into the views and meetings of all the companies we invest In 2023, we continued to strengthen our concerns of investors. They provide in, where we have the authority to voting policy in line with our three themes, meaningful support for issues raised that exercise voting rights. Our Proxy Voting We opposed 24% especially with respect to ethnic diversity merit careful consideration by companies’ Committee reviews vote outcomes and of director elections. and holding directors accountable on boards and management. We customarily we evaluate and address notable year- climate issues (see table). In our view, review shareholder proposals for all of our on-year changes in the number of shares director accountability is particularly holdings. Given the variety and variability voted. We respect the right of clients in We opposed 18% important when climate transition of shareholder proposals, we prefer to segregated accounts to retain voting of capital authorisations. strategies are not initiated in time or review and vote on a case-by-case basis, rights or request that voting rights are we deem them insu昀케ciently ambitious. taking into account factors such as the exercised in line with their voting policy. In 2022, our guidelines changed with a nature of the proposal and whether it They may also delegate proxy voting and decision to vote against remuneration might be overly prescriptive in nature, as engagement activities to a third-party Source: Allianz Global Investors, as at policies of large-cap EU companies that well as the company’s overall policies and service provider. 31 December 2023. lack ESG KPIs. We implemented this voting rule as of 2023. Allianz Global Investors Sustainability and Stewardship Report 2023 64

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.8 Exercising our voting rights Principle 7 8 11 12 We do not provide clients with the option of the voting process alongside members Once reviewed, proposals are posted voting decisions. In exceptional cases to in昀氀uence voting decisions on a case- of the Stewardship team. on an internal global research and where we do not reach consensus, voting by-case basis. We are committed to full We review a weekly report from AllianzGI’s collaboration system for review by our decisions are escalated to the Proxy transparency of our proxy voting activities. 42 Investment teams. For policy overrides, Voting Committee. In a minority of cases, Our disclosures include detailed Global Central Enterprise Data Repository internal consultations involving investment we apply policy overrides – for example, Corporate Governance Guidelines, a that is speci昀椀cally centred around professionals also take place through when we gain additional information Stewardship Statement detailing our voting rights and the respective entity. this platform. We aim to have one following engagement that is pertinent engagement and con昀氀ict of interest This picks up any change or addition to integrated view when it comes to proxy to the voting decision. policy, and real-time disclosure of all votes voting rights (and the e昀昀ective dates of cast, accessible through our website. these changes) attached to all accounts AllianzGI proxy voting process and informs operations to update these AllianzGI proxy voting process This insight includes commentary on our statuses with ISS. The reporting contains votes against resolutions and abstentions. asset class information to clearly show 03.8.1 Ensuring a robust which accounts require attention. We also conduct a quarterly audit across Portfolio General Application of Automated Vote voting process all of our funds with data reviewed by holdings meetings: date proxy voting vote execution All proxy voting research and initial voting the Compliance team. We review and and agenda policy implementation recommendations are generated based challenge unvoted meetings. on our proprietary proxy voting policy. We take a risk-based approach to Proxy voting research is provided by research and analysis around proxy Institutional Shareholder Services (ISS), voting. This means the Stewardship Selection a third-party proxy voting service provider. team focuses its e昀昀orts on reviewing criteria apply We use an electronic proxy voting shareholder meeting proposals for the platform provided by ISS to cast our proportion of holdings in our portfolios votes. Our Stewardship team is in ongoing deemed particularly important to us and contact with ISS whenever questions potentially higher risk. These holdings arise with regards to a speci昀椀c piece of are, for example, large aggregate Case-by-case review Review by Manual Vote positions across our strategies or core execution research and the application of our policy. stewardship vote Additionally, we hold quarterly review holdings in individual funds. Our proxy analyst implementation meetings to review broader process voting policy is consistently applied to issues, involving teams responsible for the remaining holdings. compliance and the operational integrity 42 The internal repository for all AllianzGI’s vehicle, investment, operational (static) data. Allianz Global Investors Sustainability and Stewardship Report 2023 65

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.8 Exercising our voting rights Principle 5 7 11 12 03.8.2 Strengthening our 03.8.3 Securities lending Voting in 9,137 shareholder meetings Voting on 95,512 single proposals voting policy Securities lending can enhance returns We review our global corporate where it is deemed appropriate. We do governance guidelines and related not actively engage in securities lending 22% policies at least annually, considering on behalf of our mutual funds or assets 29% changes in market developments, vote for institutional clients, whether via an turnout, regulatory amendments and in-house securities lending desk or a 3% changes in client expectations. third-party agency. However, where an 75% We include feedback from our service individual institutional client requests us provider on the applicability of our voting to facilitate securities lending through 71% policy in the review process. All proposed external agency lending – for example, amendments to the guidelines and via an independently selected custodian – voting policy require consultation with we strive to support this activity within our our investment platform, involving equity operational process frameworks. In favour of management In favour of management portfolio managers in all of our locations 03.8.4 How we voted in 202343 Against management, with at least Against management globally. Input from Investment teams one vote, withheld or abstained Abstained/did not vote/other enables us to combine best practice We participated in 9,137 shareholder standards for corporate governance with meetings in 2023 (2022: 10,205), Source: Allianz Global Investors, as at 31 December 2023. the knowledge of how they can be best representing 95% of all votable These 昀椀gures re昀氀ect our highly active • Board composition, quality and 44 applied and promoted in local markets. meetings. We voted against, withheld and globally consistent approach to competence of board members. Amendments to the global corporate or abstained from at least one agenda stewardship and our willingness to vote item at 71% of meetings globally against proposals that do not meet • Succession planning for chairpersons, governance guidelines are approved (2021: 69%). We opposed 22% of all directors and executives. by the Global Proxy Voting Committee. resolutions (2022: 22%) to reinforce our our expectations. • Independence and expertise of The committee considers proposals for dissatisfaction with governance issues Our voting decisions are often preceded key committees. change as raised by the Investment and or sustainability matters. by engagements that can be multi-year Stewardship teams. dialogues. Given that strong governance • Structure and quantum of executive practices at investee companies are critical remuneration, including ESG KPIs enablers of investment performance, we in pay. 43 The voting examples provided in this section were selected contextually as they illustrate a key feature place high importance on governance • Shareholder rights, for example, of our voting stance and trends of our voting application. dialogues and engaged with 255 companies in the context of takeover-related 44 We cast votes for all holdings where we have voting rights. However, in certain cases, votes cannot at least once on the following topics: matters or capital issuance authorities. 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. Allianz Global Investors Sustainability and Stewardship Report 2023 66

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.8 Exercising our voting rights Principle 7 11 12 How we voted by topic A persistent concern is that pay plans observed that in long-term variable Our rate of opposition to pay-related Executive compensation often reward underperformance, which incentive plans, performance conditions proposals in the US in 2023 continued to we do not support. were not challenging enough and/or had be high at 70%, although slightly lower Compensation-related proposals In Europe, we recorded most “against” too short a performance period, which than 2022 as we saw fewer cases of one- continued to stand out as the most votes in Germany (48%), Italy (55%) and led us to vote against them. We expect o昀昀 awards. We continue to have a general contentious area globally, with AllianzGI Belgium (61%). In Germany, where we engagement with our portfolio companies concern that many US companies fail to voting against 41% (2022: 43%) of all voted for the second year on remuneration to result in more transparency over time. operate long-term incentives that truly compensation-related management reports, we continued to have concerns By contrast, we were pleased to see re昀氀ect management outperformance proposals. We typically voted against over transparency, particularly related that the vast majority of European large rather than market movement. packages that were not supported by to clearly disclosing the link between caps have included ESG KPIs in their robust and challenging targets or when performance and pay-out. This was also remuneration policies, a request that we performance KPIs and actual targets a major concern in Italy. Here, we also included in our voting policy in 2023 and were not su昀케ciently transparent. engaged on in the previous year. Breakdown of proxy voting by topic and location UK Sweden Netherlands Spain Switzerland Japan France China Germany Taiwan Belgium Hong Kong US Italy Compensation Directors Overall Key: 10% 20% 30% 40% 50% 60% 70% (% of votes against management) Note: the darker the colour the more votes against management Source: Allianz Global Investors, as at 31 December 2023. Allianz Global Investors Sustainability and Stewardship Report 2023 67

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.8 Exercising our voting rights Principle 7 11 12 Board independence, overboarding We encourage companies to improve Case study: Management Case study: Vote against an and role of the chair gender diversity and, in the UK, the US remuneration at a UK employee stock purchase plan In 2023, we voted against 23% of all and Canada, the ethnic diversity of their investment company At its extraordinary general meeting director-related proposals, consistent boards by broadening the talent pool Given concerns around retention and (EGM), a Chinese food company with the previous year. We opposed 24% rather than overboarding individuals recruitment, a UK investment company proposed a 10-year employee stock of all director elections as we continue and exposing them to heightened initially consulted on its remuneration purchase plan (ESPP) for shareholders’ to have major concerns about the sound professional risks. policy, with a view to increasing the approval. While the plan met our and balanced set-up of many boards In Asia, our highest rates of opposition overall opportunity available to expectation in terms of dilution limits, (2022: 25%). We also voted against several were recorded in Hong Kong due to management. The proposal looked to it failed to disclose company-level companies where we deemed the board the low independence level of many right-size executive base salaries, as well performance challenges, and allowed of directors and/or board committees boards and their committees, as well as increase the maximum opportunity up to 30% of the plan’s shares to be to be insu昀케ciently independent, either as overboarding. For the same reasons, available through a “super stretch” allocated to directors, supervisors and because directors had a long tenure in Europe the most contentious markets mechanism – an additional target senior managers without any detailed or where they were representatives of were Germany and Sweden. In Italy, we beyond the existing maximum target rationale. This 昀氀exibility could change major shareholders. Overboarding is a see speci昀椀c issues due to the bundled objective. We pushed back against the the nature of the plan and provide major ongoing concern in many markets. election of board members in the voto idea behind this additional objective. targeted bene昀椀ts to executives and As demands on non-executive directors di lista system. We would prefer that We also recognised the need for the senior management, which could increase in times of economic uncertainty directors are elected on an individual basis company to remain competitive, but harm minority shareholders’ interests. and geopolitical risk, we voiced our rather than as part of a list of candidates. 昀氀agged the wider macro environment We therefore voted against the proposal concerns and typically voted against when as challenging. The company took and raised our concerns in a follow-up full-time executives take on more than one the investor feedback on board and engagement with the company. We also non-executive role, or when non-executive decided to scrap the additional stretch 昀氀agged this corporate governance risk directors take on too many appointments mechanism while also phasing in the with our investment professionals. in public and private companies. executive increases over a longer time period. We therefore decided to support the remuneration policy at the general meeting. Allianz Global Investors Sustainability and Stewardship Report 2023 68

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.8 Exercising our voting rights Principle 7 11 12 Climate-related resolutions Case study: Engagement We consider “Say on Climate” a helpful Case study: Vote action Case study: Holding directors on board independence tool for holding companies accountable following low Say on accountable and composition for their climate ambitions. In 2023, Climate support In its 2023 strategic update, an oil Following high levels of dissent votes we voted on around 30 such resolutions We engaged with an Australian oil and and gas major lowered its net-zero in 2022, we started an engagement compared with about 50 in 2022. gas company on climate ahead of its ambitions in the medium-term alongside campaign with Nordic companies on In Europe, most Say on Climate resolutions AGM to understand how it addressed increased investment in both oil and governance issues in the fourth quarter are still being tabled by UK and French investor concerns following historically gas production and its transition- of the year and held follow-up calls companies, with few in other countries. low support for its Say on Climate focused businesses. We sought to between March and April 2023 ahead Outside of Europe, the most prominent resolution in 2022. However, we saw understand the rationale and underlying of the AGM season. A Swedish company market for Say on Climate is Australia, no improvement in its climate strategy, implications through engagement. was part of this campaign, in relation whereas in the US it has not gained especially in terms of actions to support While the company did not view this to the independence level of the board traction due to continued scepticism from its transition plan. The company was as a fundamental shift in strategy, we and its committees, as well as overall domestic investors. also unable to show su昀케cient oversight disagreed. Given this material change disclosure on the remuneration report. The year 2023 has been the third year of on climate at board level or by top and the fact that investors were not Following a call with the company, voting on climate strategy and progress management. Given its lack of progress, o昀昀ered an updated Say on Climate we shared our concerns regarding reports. We observed issues with how we subsequently decided to vote against vote, we decided to vote against the the composition of the audit and companies are dealing with low vote the re-election of three members of Sustainability Committee chair. remuneration committees, which was turnouts on Say on Climate and with their the Sustainability Committee to hold On climate-related shareholder not aligned with our expectations. responses to investor concerns more broadly. directors accountable. This followed resolutions, we generally support The company committed to change the Additionally, we have also begun to see the update of our proxy voting policy in resolutions that ask companies to report composition and made amendments ad-hoc amendments to company climate 2023 to state that we will vote against on their climate change strategy in with independence levels coming closer plans after they have been submitted to directors’ election in cases of insu昀케cient alignment with the Paris Agreement to our expectations. Given this positive a shareholder vote. We generally expect climate action. or seek information on climate-related outcome, we decided to override our a company to be responsive to investor 昀椀nancial, physical or regulatory risks voting guidelines and support the concerns and to state how they will be and how the company manages them. re-election of the directors. We also addressed. We decided to take vote action Some resolutions we were not able to provided feedback to the company. against directors if we were not convinced support included requests for time- by companies’ actions or explanations (see bound phasing out of activities when we case studies). We consider holding directors viewed this as overly prescriptive. accountable as an important way of voicing our concerns on climate issues. Allianz Global Investors Sustainability and Stewardship Report 2023 69

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.8 Exercising our voting rights Principle 7 11 12 Voting on shareholder resolutions of areas. In the US, AllianzGI supported However, where we view latitude In 2023, we voted on approximately 86% of all climate-related shareholder Case study: Voting in covenants or bond terms to be 2,100 shareholder resolutions globally. resolutions, 100% of human-rights related against additional inappropriate, we seek to engage – We typically support resolutions that have resolutions and 91% of resolutions with reporting requirements either bilaterally or through a longer-term focus and aim to improve respect to greater transparency on We did not support a resolution collaborative engagement groups political contributions and lobbying. requesting a large US retailer to 46 and EMIA47) – to secure corporate practice and transparency. (eg, ELFA We tend not to support resolutions that Information on our voting behaviour is report annually on how the board is better debt holder rights. are too granular, overly restrictive or likely available in real-time on our website aligned with the racial and gender Our engagement approach applies to impose an unreasonable administrative representation of laid-o昀昀 employees. to equity and 昀椀xed income holdings, burden, or where we believe a Case study: Supporting a While we consider these dimensions of insofar as the counterparties overlap. company has already demonstrated resolution on climate lobbying diversity important and human capital We ensure a 昀氀ow of information through reasonable progress. matters material for large employers, our investment and collaboration In the US, sustainability-related issues We supported a climate lobbying we do not think it is necessary to add platform, which both teams can access. typically 昀椀nd their way on to the agenda shareholder resolution at a US bank. to existing reporting in such a narrow In 2023, we continued to strengthen the of a general meeting via shareholder Transparency on climate lobbying is in way given it is already covering collaboration between the Sustainability resolutions. There was a record number shareholders’ interest given the risks broader dimensions across the whole and Fixed Income teams in several areas, of shareholder resolutions in 2023, imposed to lenders as the economy US workforce. notably with respect to engagement but also generally lower levels of support, transitions, as well as the positive (see section 03.2.1). The Stewardship dropping to about 21.6% from a peak of contributions banks can make by 03.8.5 Exercising our and Fixed Income teams have been in 45 昀椀nancing climate solution sectors. regular dialogue to improve the uptake of 33.3% in 2021. For this company, we engaged during the rights and responsibilities In the US, we voted on 629 proposals. year and had high conviction about our beyond equities internally developed tools and to expand This included 60 on corporate governance views given that, in our view, the bank’s credit-speci昀椀c engagement activity. (excluding director elections and director- disclosure was insu昀케ciently transparent. Exercising voting rights is typically limited related), 62 on compensation and 211 to equity holdings. As debt investors, we on social themes. The remainder were seek to exercise rights at the fund level, environmental resolutions or a blend where possible. Where bond issuers have outstanding equity, our debt investors will bene昀椀t from the ability to exercise rights formally through our equity holdings. 45 Sustainable Investment Institute, as of July 2023. 46 European Leveraged Finance Association. 47 Emerging Markets Investors Alliance ( Allianz Global Investors Sustainability and Stewardship Report 2023 70

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.9 Transparently managing conflicts of interest Principle 3 7 Our 昀椀duciary duty requires us to 2. Our core business is investment • Global oversight – AllianzGI has • Training – we have implemented exercise any rights – including management – managing money and established a Global Proxy Voting employee training designed to prevent engagement – in the best interest of assets for our clients. Where a client’s Committee to provide oversight of the perceived or actual conflicts of interest our clients. This includes identifying, fund holds securities in a sponsor proxy voting process. This reports to the from constituting or giving rise to a monitoring and actively and fairly company, a perceived con昀氀ict of interest Investment Executive Committee. material risk of damage to the interests managing any con昀氀icts of interest that may arise if we exercised the proxy • Conflict management – there are of our clients. may arise from our activities. vote or engaged in topics on behalf instances when we may not wish to • Risk management – to manage We regularly review existing and new of our client that may impact our own cast a proxy vote in strict adherence potential conflicts in our engagement business processes, new products and commercial interests or arrangements. to our voting guidelines. Where a activities, the Risk Management services, new business relationships and 3. We may sometimes have clients that potential material conflict of interest function has developed clear and internal restructuring measures to ensure advocate a voting position with respect arises between the company’s interest transparent internal escalation we identify con昀氀icts of interest at the to a proxy vote on a company that we and those of a client with respect to guidance. The guidance distinguishes earliest reasonable opportunity. view to be inconsistent with the long- proxy voting, the Global Proxy Voting between non-public and public We have identi昀椀ed the following major term best interests of other clients. Committee will convene to evaluate the engagement activities. potential con昀氀icts of interest with respect 4. We may invest in a company that is also issue, considering information from all In 2023, the Proxy Voting Committee to our stewardship activities: a signi昀椀cant distributor of our products. relevant sources. convened three times to decide on proxy 1. AllianzGI is owned by Allianz, a global 5. A director, o昀케cer or employee of Allianz • Functional separation – a separation voting decisions that constituted a potential insurance and 昀椀nancial group whose SE or AllianzGI may also be a director of of processes and management within con昀氀ict of interest. This concerned voting interests and views may not always a company that we invest in. AllianzGI helps ensure that individuals matters relating to our parent company, align with what we consider best for Our governance structure and policies who are clients or have business Allianz, and major distributors. our clients. and processes for managing con昀氀icts of relationships with the firm are not interest in proxy voting and engagement able to exercise improper influence include a Con昀氀ict of Interest Policy over our proxy voting decisions. Proxy published in our Stewardship Statement, voting rests entirely with the investment which comprises the following elements: platform in line with pre-defined oversight procedures. Allianz Global Investors Sustainability and Stewardship Report 2023 71

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.9 Transparently managing conflicts of interest Principle 3 7 Con昀氀ict type Description and approach taken to manage con昀氀icts of interest Voting shares of our Context: parent company AllianzGI is owned by Allianz, a global insurance and 昀椀nancial group. Several of our funds may invest in Allianz securities. A potential con昀氀ict of interest arises between the interest of these funds and those of our parent company when voting on our shares. 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 decision- making process from improper in昀氀uence 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 昀椀duciary duties are respected. Voting shares of our Context: main distribution We may invest in a company that is also a signi昀椀cant distributor of partner our products. Mitigating policies and procedures: While research, analysis and alignment follow the usual processes, we instituted procedures to make sure that shares of a key distributor we are invested in are voted in the best interest of our clients. In the case of a signi昀椀cant “against” vote in line with our proxy voting policy recommendation, and considering the size of our holdings, the vote proposal would be directed to the Proxy Voting Committee for review and decision-making to ensure that we comply with our 昀椀duciary duties. Allianz Global Investors Sustainability and Stewardship Report 2023 72

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 03.10 Looking ahead: active stewardship Principle 7 Looking ahead: active stewardship In 2024, our plans to strengthen our stewardship approach include: Strengthening our voting Basing our decisions on the policies around pay, gender application of our proprietary diversity and climate. net-zero alignment share 48 methodology, which Updating our voting policy compares companies’ to increasingly hold directors progress consistently across accountable if a company sectors and markets. does not have a credible Reinforcing our expectations net-zero strategy in place. with respect to independence, Expanding our policy of for example, asking boards voting against large-cap to implement an independent companies that do not Chair of their Audit and include ESG KPIs in their Remuneration Committees. remuneration policies beyond Europe, and to smaller companies, as of 2025. 48 The net-zero alignment share methodology aims to assess the credibility of a company’s transition plan and net-zero pathway. It is based on the Net Zero Investment Framework from IIGCC’s Paris Aligned Investment Initiative. Allianz Global Investors Sustainability and Stewardship Report 2023 73

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04 Strengthening sustainability in our operations In 2023, AllianzGI reached a key milestone – achieving environmental sustainability targets in our global business operations. Alongside that, important work has been done to enhance our firm as an attractive and inclusive place to work, with a significant focus this year on providing opportunities for all employees to engage more in global and local causes that matter to us all.” Cecilia Grøndahl Head of Culture and Engagement Allianz Global Investors Sustainability and Stewardship Report 2023 74

      2023 | Sustainability Report - Page 75

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.1 Strengthening sustainability in our operations Being a sustainable business means creating long-term value without compromising our impact on people, planet or pro昀椀t. We work towards this goal both through the sustainable products and services that we create, and by strengthening sustainability in our own operations. To become more sustainable as a company, we take action in four areas: how we empower our people, how we run our business, how we manage the environmental impact of our operations and how we contribute to society. We are building on a good standard of environmental management across our operations, developing our social approach, strengthening governance with continuously enhanced internal control processes and integrating more sustainability criteria into our supply chain management. This chapter describes the progress we have made during 2023. Please see section 01.3 for more information on our sustainability governance and how we are expanding our more holistic approach to sustainability. Allianz Global Investors Sustainability and Stewardship Report 2023 75

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.2 Creating an inclusive and supportive workplace We foster a working environment where In 2023, we advanced our DEI work by with their employer, combined with the • AllianzGI has been a member of people, performance and clients matter. connecting it to our overall corporate regulatory limitation in several of our Allianz’s Global Inclusion Council (GIC) We take a strong stance on diversity, citizenship strategy, speci昀椀cally by locations related to collecting diversity since its inception in 2007, with Tim equity and inclusion (DEI) and contribute working with our corporate citizenship data. To address this issue, in 2024 we Friederich, Head of risklab, representing to awareness and commitments to DEI colleagues to create Local Engagement will start collecting demographic data AllianzGI. The GIC has been responsible across our industry and wider society. Groups (LEGs), see page 91. anonymously in the UK, where regulation for progressing DEI initiatives across the We focus on maintaining a diverse Addressing female talent in allows it, and explore how we can best Allianz Group, as well as integrating workforce and an inclusive workplace. asset management leverage diversity data for the bene昀椀t DEI into the business and monitoring The health and wellbeing of employees A key challenge we continue to face is of minority groups. We will also work to progress. It comprises more than 20 are important to us. We support employees the long-term issue of a short supply of strengthen a culture that encourages Allianz senior management members to develop skills and knowledge that female talent in our industry. We address employees to feel safe to share from various operating entities, and help shape sustainable pathways and this in di昀昀erent ways, from actively personal information. leads from our five global DEI Employee allow them to be resilient and prepared sourcing female talent to ensuring Our DEI strategy Networks, as well as Allianz Group for change. female representation in our succession DEI is a company-wide responsibility, and Centre representatives. 04.2.1 Living DEI planning and supporting female talent every employee has a role in creating • Local Engagement Groups (LEGs) development. The latest example was an inclusive culture and supporting our These employee groups activate Our work on DEI helps us to build a strong the nomination of female talent in 2023 commitment to DEI. The DEI governance engaging activities that contribute culture and to attract, develop and retain to attend the Diversity Project’s Pathway structure is as follows: to a sense of belonging and inclusive a wide variety of talent and an engaged programme through 2024. Pathway, work environments. There are currently workforce. It helps us avoid groupthink a bespoke programme developed by • The Executive Committee is responsible 11 active groups across our office and make better business decisions. the industry for the industry, focuses on for overseeing all DEI activity at locations, with some of these groups Fostering an inclusive and diverse developing female portfolio managers. AllianzGI, while our Head of Culture bringing colleagues together to clean workplace is not only the right thing to and Engagement leads on the up parks or neighbourhoods to support do: it is also part of our responsibility as Solving diversity data implementation of our DEI strategy. World Cleanup Day in September 2023. a corporate citizen and embodies our challenges globally Our senior managers are accountable corporate values of integrity and respect. Another challenge we experience when for DEI within their functions, and this By leveraging our responsible investor working towards increased diversity commitment is embedded within their values, we have the power to encourage across various demographics (eg, sexual performance goals, with progress and directly in昀氀uence greater levels of orientation, ethnicity or disabilities) is regularly tracked. DEI activity within the asset management the reluctance of employees in most sector and wider society. labour markets to share this information Allianz Global Investors Sustainability and Stewardship Report 2023 76

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.2 Creating an inclusive and supportive workplace AllianzGI’s DEI strategy is based on three pillars: This pillar focuses on attracting and developing a large variety of talent to grow the diversity of our workforce and, in particular, to enhance women’s representation at senior levels in the organisation. 1. Workplace: We aim to improve the diversity of our workforce through our hiring and recruitment practices, focusing on gender equality, o昀昀ering fair Who we recruit and equal pay, and providing training and mentoring to develop and retain diverse talent. and develop This pillar focuses on providing a workplace where employees, whether from majority or minority groups, feel included and valued. We aim to nurture an inclusive, safe and healthy culture through relevant practices, policies, tools, training and communication. 2. Workforce: These practices address zero tolerance towards harassment and discrimination, allow for 昀氀exible hybrid working, increase employees’ DEI How it feels to awareness and foster employee health and wellbeing. work here This pillar focuses on how we can best leverage our responsible investor values to make a positive contribution for more DEI in our society and industry. Ways in which we contribute include our investment approach, and by making diversity an engagement priority for the active stewardship 3. Marketplace: of companies we are invested in, with memberships and charter commitments for more diversity. We also use thought leadership to push How we serve our for greater gender balance in our industry’s boardrooms. social purpose Allianz Global Investors Sustainability and Stewardship Report 2023 77

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.2 Creating an inclusive and supportive workplace 2023 highlights across each pillar • We saw positive development of • Regular diversity webinars covered Bringing strategy to life Workforce female representation in our overall topics such as neurodiversity and AllianzGI contributes to Allianz’s overall • We took part in the ADAN Career Day, workforce (43%), and among people attention deficit hyperactivity disorder diversity ambitions, which encompass regarded as the largest career fair for managers (34%). See page 79 for a (ADHD) awareness, which attracted progressing towards gender balance, Black and People of Colour (BPoC) in full breakdown. 118 participants, with 100% of survey improving disability inclusion, ensuring Europe, which exclusively brings together Workplace respondents agreeing they would generational representation, aiming BPoC talent and renowned companies. recommend the webinar to other for broad ethnic and nationality • Our zero tolerance culture activities colleagues. Other examples include representation, and o昀昀ering Allianz The target group has a diverse academic were focused on strengthening the health and wellbeing topics, such as employee networks for minority groups background and appeals to graduates sense of psychological safety within and “Talking about cancer in the workplace”, as follows: and professionals. According to the across teams at AllianzGI. Teams joined which attracted 187 participants. organiser, female representation is for reflections and exercises around • NEO – gender inclusion and equity. around 60–70%. We participated risk awareness, speak-up culture and Marketplace • GRACE – global race and alongside other Allianz organisational team cohesiveness. The post-workshop • Part of our work to promote gender cultural ethnicity. entities, and we plan to do so again in survey showed positive impact, with diversity is our continued membership • PRIDE – LGBTQ+ inclusion. 2024. We launched a 16-month graduate 89% of survey respondents agreeing of the 30% Club France Investor Group, programme, hiring 16 graduates across the exercises helped strengthen team and our role in co-founding and • BEYOND – disability inclusion. the globe, 47% of whom are female, cohesiveness and 89% feeling safe to co-chairing the 30% Club Germany • ENGAGE – age inclusion. into roles ranging from Distribution to speak up when making mistakes. Investor Group in 2023. See page 57 Operations and the Investment Platform. for more details. In line with Allianz Group targets, our When they complete the programme, • To improve people’s virtual ambition is to have at least 30% women graduates continue their careers at collaboration skills, we carried out • We co-hosted various events in in senior leadership positions. Since 2020, AllianzGI in the role they were hired for. workplace renewals that facilitate collaboration with 100 Women our ExCo has been 50% female. hybrid working and ran a “Fit4IT” in Finance, such as “Web 3.0 & We are proud that in an industry where • At the end of 2023 we joined the week with digital tips and tricks, which metaverse: the future of digital wealth Diversity Project Pathway programme, attracted around 500 participants. management” in Hong Kong, and women have traditionally been under- which is focused on developing the “The future of finance: where cutting represented, several of our key leadership female portfolio managers of the future. • We launched “InsideOut”, an internal edge tech meets wealth management” positions are held by women. They include This 12-month programme brings DEI online learning series, which focuses in Frankfurt. our Global Head of Investments, Global together female talent from across on knowing minority and majority social Chief Investment O昀케cer for Equities, the industry and focuses on areas, groups inside and out and has gained • We published relevant thought Global Chief Operating O昀케cer, Global such as developing technical skills and more than 4,000 employee views. leadership content, such as: “Gender Head of Legal, Head of HR and Head strengthening leadership capabilities. diversity: fixing the pipeline” | Allianz of Products. Global Investors ( Allianz Global Investors Sustainability and Stewardship Report 2023 78

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.2 Creating an inclusive and supportive workplace Recruitment and development Commitment to equal pay • Engage third party consultants to • Regularly discuss individual pay at a We have rules in place to ensure a gender- Our compensation principles underscore analyse employee pay and identify local level with managers, along with balanced succession pipeline for senior our commitment to an inclusive potential pay gaps. market references, where available. roles. In 2023, 34% of our managers were environment and equal pay. To put them • Base pay decisions on objective • Conduct annual functional reviews female. We also restarted graduate into practice, we: reasons and disregarding to support fair pay decisions. programmes, which are an important protected characteristics. source of female talent for the 昀椀rm. Female graduates comprised 47% of the 2023 intake compared with 36% of the Women in leadership Nationalities and age 1,364 applications and represented 11 Workforce ratio 49 nationalities in 2023. % female managers % women in senior No. of nationalities Employees under 2023: 50 51 We work with universities that have a 2023: leadership positions 2023: 35 years focus on female graduate programmes 2023: 2023: and ensure our brand communications 57% 34% 26% 79 25% help attract female talent. To improve male managing directors talent retention, we deep-dive into 2022: 32% 2022: 66 engagement survey results by gender to 2021: 32% 2022: 26% 2021: 63 2022: 25% identify what drives engagement with 43% 2021: 23% those populations, and target attraction female and retention actions accordingly. 50% 2022: male 58%/ female 42% ExCo members 2022: 50% 2021:50% Source: Allianz Global Investors, as at 31 December 2023. 49 This refers to the 昀椀rst level of leadership where managers have at least one direct report. 50 In line with Allianz Group targets, our ambition is to have at least 30% women in senior leadership positions (managing directors and ExCo members). 51 In line with Allianz Group targets, we aim to have balanced generational representation where at least 25% of our workforce is below 35 years of age. Allianz Global Investors Sustainability and Stewardship Report 2023 79

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.2 Creating an inclusive and supportive workplace We recommend this training to teams Our framework allows for 昀氀exibility in Employee facts and 昀椀gures whose Allianz Engagement Survey (AES) both time and place, providing room results indicate there may be issues for individual working arrangements Training/upskilling Health, safety and wellbeing with workload or where we identify that to bene昀椀t a thriving culture. Some may 2023 2023 process improvements are needed. agree within their team to come in on We rolled out strategic workforce 昀椀xed days; others may choose to split EUR 2.9m 3 days planning in 2023, and in 2024 we will their time between morning hours in the identify learning pathways for speci昀椀c job o昀케ce and working from home in the invested in employee Average sick days pro昀椀les to ensure roles and development afternoon. This 昀氀exible model empowers development per employee are fully aligned. our colleagues to balance work, career 2022: EUR 2.7m 2022: 3 days Beyond gender, we monitor dimensions development and personal priorities in 2021: EUR 2.1m 2021: 2 days such as age and nationality to nurture the way that best suits their individual a truly international and age- work and life situations. 2023 2023 balanced workforce. In the 2023 AES, 87% of employees agreed that the 昀氀exible working arrangements we 24 hours 10 years 04.2.2 Promoting health and o昀昀er meet their current needs. The same of training on average Average length wellbeing in a 昀氀exible and survey also showed that 89% feel per employee of service hybrid work environment connected to the company, regardless of where they work. 2022: 22 2022: 10 years Creating a 昀氀exible work environment Since 2022, we have also o昀昀ered cross- 2021: 15 2021: 11 years As a global business, we have many border remote working as an extension years of experience using technology- of our 昀氀exible work o昀昀er. This allows enabled virtual collaboration. Our global employees in roles that allow for it to work Source: Allianz Global Investors, as at 31 December 2023. framework for 昀氀exible work arrangements occasionally from abroad for up to 昀椀ve Learning: focus on future skills employees, totalling more than 8,900 has been in place since 2016. With the days in one trip, for a maximum of 25 days and resilience training hours on topics such as people development of new tools and equipment in a calendar year. This has been positively Our employees have access to global, management skills, resilience and to support digital collaboration and the adopted by employees; 711 employees’ regional and local development wellbeing. We o昀昀er training in the Kaizen deep experience gained over the past cross-border remote work requests were opportunities for lifelong continuous continuous philosophy to all employees few years, we continue to build on this approved in 2023. learning. In 2023, our return to face-to- and encourage teams to use it to framework. We focus on empowering face learning saw a high uptake from identify improvements. employees with collaborative and 昀氀exible ways of working. Allianz Global Investors Sustainability and Stewardship Report 2023 80

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.2 Creating an inclusive and supportive workplace We are also working to ensure that o昀케ce annual AES survey, 72% of employees The Work Well Index+ (WWi+), which 04.2.4 Respecting environments are attractive, refurbishing responded that the company’s bene昀椀ts measures the stress level of employees employee rights o昀케ce spaces to support employees in plan meets their needs well, up from for work-related strain, also saw an We ensure that employee rights are working collaboratively. To continuously 69% in 2022, while the percentage of all-time high of 73% favourable answers protected in all entities. In line with improve digital literacy for hybrid working, employees feeling able to balance (+3 percentage points on 2022). Allianz’s principles, we are committed to we dedicated a week for speci昀椀c “Fit4IT” work and personal life has risen from Overall, AES improvements in 2023 continuing to respect and implement the training o昀昀ers to help employees get the to 77% from 74% in the previous year. were driven by positive results in the fundamental rights and principles at work most out of everyday IT applications, such We continue to work to make employees’ areas of culture, process improvement, of the International Labour Organization as Microsoft Teams, Notes and Outlook. experiences in these areas meaningful. collaboration, risk culture and perceptions (ILO), as well as the principles of the UN Around 500 participants attended around 昀氀exible working. Areas identi昀椀ed Global Compact and the OECD Guidelines these sessions. 04.2.3 Listening to in the survey that we will be addressing for our colleagues improvement include innovation, driving for Multinational Companies. Supporting employee health and wellbeing The AES is our formal platform for change, further streamlining of processes The health and wellbeing of our gathering annual employee feedback and providing employees with relevant employees is a priority, and we support it on how it feels to work at AllianzGI. It is training for future skills. with a holistic approach that incorporates supplemented with regular Pulse surveys LEGs are one of several pillars to mental, social and physical wellbeing. that help track our progress against drive employee engagement, helping We consider the causes of stress and speci昀椀c commitments or focus areas. employees to connect across shared depression through an intersectional DEI In 2023 the AES participation rate was interests and topics. AES results correlate lens to promote good mental health and 84%, with the Employee Engagement with local engagement activity and o昀昀er advice on topics such as nutrition, Index (EEI) – which measures the extent illustrate the value of investing in these sleep and managing work-life balance. to which employees are motivated to initiatives, as they help to energise and During 2023 we leveraged milestone days contribute to organisational success – retain an engaged workforce. such as World Health Day to promote up 3% to 72%. targeted wellbeing messages, and used The Inclusive Meritocracy Index (IMIX), our long-standing Employee Assistance which measures our progress in creating Programme (EAP), which includes a culture and working environment professional, anonymous psychological where people and performance matter, support. Our EAP programme o昀昀ers were remained at its all-time high of 78%. accessed 248 times during 2023. In our Allianz Global Investors Sustainability and Stewardship Report 2023 81

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.3 Ensuring responsible business conduct Principle 3 5 Our licence to operate is built on the trust The 昀椀rst line of defence is carried out Reinforcing the second line strategy, risk management and data that our investors, employees and other by business functions in their day-to- As part of Allianz Group, we are subject to frameworks. The SGC is responsible for the stakeholders place in our performance day activities. They are responsible for its governance requirements relating overall consistency of frameworks across and integrity. designing and implementing adequate to environmental, social and governance asset classes. It oversees sustainability/ A key component is the personal ethical controls to manage risks and returns (ESG) matters. corporate sustainability indicators as targets behaviour of all of our employees relating to their activities. To support Allianz has increased the importance for AllianzGI. It has reporting obligations to worldwide. Their actions are guided by employees in undertaking these of sustainability with the ambition to the Legal, Compliance and Risk Committee global policies and ethical standards, responsibilities, global compliance training fully integrate sustainability across the and the Executive Committee. as well as a robust and mature internal is made available and was successfully company. The Board of Management at Governance & Business Analytics control framework (Three Lines of completed by 100% of employees across Allianz SE is ultimately responsible for comprises a team that has moved from Defence) that ensures employees all locations in 2023. all matters relating to sustainability and our Sustainable Investing area. This new manage business ethically and in The second line of defence provides is supported by the Group Sustainability function reinforces our governance in compliance with internal procedures independent oversight of employees’ Board (formerly known as the ESG Board). relation to regulatory and reputational risk and regulatory requirements. adherence to the company’s regulatory In 2023, AllianzGI evolved its sustainability and strengthens the segregation of duties requirements and internal policies, as governance to improve operations in respect to the independent assurance 04.3.1 Three Lines of well as the risk-taking and controls and resilience and future-proof the of data quality, analytics and reporting. Defence framework conducted by the 昀椀rst line. It is carried out organisation in relation to the developing The team’s responsibilities include: Responsibility for ethical business conduct by the Legal and Compliance and Risk regulatory environment. To do this, creating a 昀椀rst-class independence model and risk management is an integral part Management teams, which oversee and we took two major steps forward, for sustainability; leading integration with of our business processes that spans the advise the 昀椀rst line of defence. establishing a dedicated Sustainability consistent and appropriate processes entire value chain, from client onboarding The third line of defence is performed Governance Committee (SGC) and across the 昀椀rm to meet good governance; and portfolio risk management to by Internal Audit, which independently introducing a new, independent function, and complying with sustainable 昀椀nance ensuring personal information is treated assesses the governance and internal Governance & Business Analytics. regulation requirements and oversight of with the utmost care. control systems and processes, as well sustainability disclosures. It also uses ESG as compliance with risk principles, The SGC is a cross-functional body data and advanced technology to develop Risks are addressed as part of an performs quality reviews of risk processes that streamlines decision-making and sustainable investing methodologies overarching reporting and controlling and tests adherence to business standards, decides on a range of sustainability and solutions. framework. This covers qualitative and including the internal control framework. topics, including corporate and quantitative risks for each function along product sustainability approaches and three lines of defence. The distinction sustainability frameworks relating to between the di昀昀erent lines of defence is principle-based and determined by activity: Allianz Global Investors Sustainability and Stewardship Report 2023 82

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.3 Ensuring responsible business conduct Principle 3 5 04.3.2 Globally harmonised The Code of Ethics serves as a foundation 04.3.4 Managing the Risk Management function de昀椀nes policies and standards for our compliance culture and regulatory risks e昀昀ectively which risk models and analytics are used Globally applicable policies include: expectations for all AllianzGI employees. The independent Risk Management to ensure compliance with regulatory the AllianzGI Code of Ethics and Speak- function is responsible for setting up a requirements and, for selected topics or 04.3.3 Ensuring compliance if contractually agreed, determines when Up policy, as well as policies governing The Compliance function is responsible 昀椀rm-wide auditable, documented risk further independent risk analyses and anti-money laundering, anti-fraud, for implementing and maintaining management system and risk policies that supervision should be conducted beyond anti-trust, anti-bribery, economic an e昀昀ective compliance programme. are consistent with AllianzGI’s business what is required by regulation. sanctions, personal account dealing, This includes compliance risk analyses, strategy. We cluster risks into four risk Operational risk is de昀椀ned as the risk of order execution, con昀椀dential information/ as well as the annual compliance categories: investment risk, operational loss inherent in our internal organisation insider information and data privacy. self-assessment and control plan. risk, business risk and reputational and the processes and controls resulting Employees are required to act in Compliance also develops and risk. We consider sustainability risk, from potential failure to deliver our accordance with these policies at all administers guidance for employees, concentration risk and emerging risk products or services in the required time times, whether dealing with clients, regular compliance training sessions as transversal risks that may be realised and quality and in line with all regulations. external third parties or other on the Code of Ethics and anti-money in one or more of these categories. Each function is responsible for ensuring Allianz employees. laundering, and annual and ad-hoc Our robust processes and procedures an appropriate control framework to Our clients expect their personal training on matters related to other ensure that we e昀昀ectively monitor and govern its key processes and mitigate information to be treated with company policies and procedures. manage risks within these categories. operational risks. The Risk Management the utmost care and we take this All employees attended mandatory Investment risk includes the risk of function has established an integrated responsibility seriously. Employees must compliance training in 2023, covering changes in the value of investment framework to oversee operational risk adhere to con昀椀dentiality in relation to topics including anti-money laundering, portfolios that may be perceived as management by the business. client information and 昀椀rm activities. anti-fraud and economic sanctions. inconsistent with the risk pro昀椀le of the AllianzGI pursues e昀昀ective management The Compliance function is involved respective portfolio as communicated to and fair handling of the potential in the monitoring of proxy voting and the investor. This includes the risk that the con昀氀icts of interests that may arise as investment guidelines, including those company is exposed to market and credit we provide investment services. We have related to sustainability matters, such as risk in the portfolio via implicit or explicit embedded robust business policies and exclusion lists. It also monitors portfolios performance promises. Investment risk processes governing ethics and client for compliance with investment also includes liquidity risk, which depends con昀椀dentiality. They are detailed in the guidelines, both pre- and post-trade. on asset liquidity and 昀氀ows on the liability AllianzGI Code of Ethics and echo Allianz side, as well as constraints imposed by Group’s overall standards. regulators. For investment risk oversight, Allianz Global Investors Sustainability and Stewardship Report 2023 83

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.3 Ensuring responsible business conduct Principle 3 5 Business risk is de昀椀ned as the risk of 04.3.5 Fostering security and We actively take steps to prevent and within the 昀椀rm. The programme is subject not being able to reach the 昀椀nancial business resilience respond to investment fraud schemes to oversight by Allianz Asset Management objectives in a given competitive market that misuse our brand, working with the (AAM). Annual self-assessments are or regulatory environment. To monitor Data privacy and cybersecurity relevant agencies to reduce the impact submitted to AAM in accordance with business risks, the Risk Management The Global Data Privacy function is part of digital crime. group requirements and the programme function uses key risk indicators that cover of Legal and Compliance and includes To manage cyber risks, we select best is subject to regular audit reviews. business and investment performance of regional Data Privacy O昀케cers and a Global practices from leading cybersecurity In 2023, we emphasised protective the management company, among others. Data Privacy O昀케cer. The function informs, frameworks, such as the International security, in which we work to proactively Ad-hoc and regular meetings are held advises and makes recommendations on Organisation for Standardisation or build resilience into the organisation between the Risk Management function compliance with applicable data privacy the National Institute of Standards and by ensuring that both our people and and stakeholders in other functions to laws and regulations, the Allianz Privacy Technology. These frameworks set the locations are prepared to respond discuss the current business situation and Standard and other internal and legal standards for processes, controls, security to interruptions. forward-looking developments. standards, as well as guidelines. It works testing and reporting. Each major function has a business Reputational risks are de昀椀ned as risks closely with the respective Information Since there can never be 100% protection recovery plan that ensures key business of activities undertaken within the 昀椀rm or Security O昀케cers to ensure that adequate against cyberattacks, we also implement processes can be resumed in the event of by employees outside the 昀椀rm that may data protection-related technical and controls and training to ensure e昀昀ective a severe business interruption. Plans cover result in unintended material negative organisational measures are taken. recovery from a successful attack to the most important risk scenarios for the impacts on stakeholder perceptions Our cybersecurity programme is reduce the potential impact and loss of employees, facilities, technology that could potentially impact AllianzGI’s fundamental to the sustainability of our duration of business disruptions. and third-party support. ability to do business. These stakeholders business. We design, operate and monitor As part of a continuous improvement include clients, investors, the media, the an appropriate level of security controls. Business resilience public, regulators and employees of As cybersecurity threats continue to Business resilience incorporates business programme, we collect and analyse AllianzGI and Allianz Group companies. evolve and become more sophisticated, continuity and disaster recovery and is an feedback to improve the e昀昀ectiveness Prudent management of reputational we constantly invest in infrastructure integral part of our service commitment of the business resilience framework. risk is deemed essential in the overall and tools to combat them. In 2023, to our clients. risk framework. we enhanced our focus on making sure Managed by the Business Resilience team, that emerging technologies, such as AI, our business resilience framework is a are secure and safe to use. We did this multi-tiered risk defence model supported through comprehensive assessments of by input from steering groups, a corporate the new risks associated with emerging resilience organisation and every function technologies and by ensuring controls are in place to manage those risks. Allianz Global Investors Sustainability and Stewardship Report 2023 84

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.3 Ensuring responsible business conduct Principle 3 5 04.3.6 Being transparent In response to increased regulatory about tax requirements in Luxembourg, we have Our ambition is to take a responsible produced risk appetite statements for approach to the management of taxes. companies and funds and adhere to rules We aim to be recognised as a compliant, of engagement for companies. cooperative and reliable taxpayer in each Responsible communication country where we operate. In 2023, Allianz with clients consolidated its tax transparency reporting We have always been committed to products while keeping the same level client communications that are fair, of information. To support this approach, not misleading, accurate and up to the Allianz Group Tax Strategy is now date in all material respects. We strive published as a separate document online. to meet the highest standards for client See the Allianz Group Tax Strategy communications in accordance with Report 2023 and regulatory requirements under local laws. AllianzGI’s UK Tax Strategy for Our new client communications policy, more information. training and handbook have been rolled out. They reinforce employees’ 04.3.7 Strengthening knowledge on the mandatory principles internal controls of the policy, as well as the standards expected and important guidelines for all We continuously enhance our internal communications to clients, including the control framework, processes and preparation, review and dissemination of procedures to ensure they remain robust materials. Training on this is mandatory to and e昀昀ective in sustaining the trust of protect our clients and our business – all clients, employees and stakeholders. employees have access to this training and This includes ongoing work to review must con昀椀rm that they have completed frequently changing sanctions regimes. it successfully. Our global Know Your Customer (KYC) standards were amended with the addition of UK annexes – where necessary –to re昀氀ect the 2023 project to transform our UK branch into a standalone a昀케liate. Allianz Global Investors Sustainability and Stewardship Report 2023 85

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.4 Managing the environmental impact of our operations Our e昀昀orts to address the challenges We have put initiatives in place to achieve These practices and processes are Our current emissions arise primarily from of climate change and reduce our these reduction targets as detailed oriented towards ISO14001 and business travel (2023: 70%; 2022: 53%) environmental impact contribute to in the following pages. The baseline ISO50001 standards. Implementation and and energy consumption (2023: 30%; Allianz Group’s environmental goals year for our environmental operational compliance with the EMS are monitored 2022: 46%), particularly from heating our for its own operations including reduction targets is 2019 across all by Allianz Group through the Group o昀케ces; paper consumption makes up less its intermediate target to reduce entities belonging to AllianzGI, and the Environmental O昀케ce (part of the Global than 1% of our global footprint. greenhouse gas (GHG) emissions wider Allianz Group. This also 昀椀lters out Sustainability O昀케ce) and supported by Accordingly, our strategy includes by 65% by year-end 2029 (against a the e昀昀ects of the Covid-19 pandemic. the Allianz Group Board of Management. initiatives focusing on the energy e昀케cient 2019 baseline). The applicable intensity ratio for our Sign-o昀昀 of AllianzGI’s environmental planning and operation of o昀케ce buildings, See Allianz Group Climate targets is GHG emissions per employee operational data is with the AllianzGI sourcing green electricity, using carbon Change Strategy. or resource consumption/output Global Chief Financial O昀케cer as part of e昀케cient transport and reducing air travel. We are committed to reducing the global per employee. the 昀椀rm’s 昀椀nancial reporting. environmental impact from our operations Our environmental Reducing GHG emissions by 2025 against a 2019 baseline as follows: management system AllianzGI’s climate targets are set in line 57% Reduction target per employee by 2025: For the reporting, monitoring and with the latest science underpinning the reduction in GHG emissions globally management of our environmental Paris Agreement. We are committed to per employee in 2023 against the 2019 GHG 52% performance and footprint, we apply Allianz reducing our GHG emissions per employee baseline (2022: 59%). Business travel 41% Group's Environmental Management by 52% by 2025 against our 2019 baseline. Energy consumption in o昀케ces52 9% System (EMS). It guides the monitoring This is a result of e昀昀orts and investment Paper consumption 20% and management of our carbon footprint, Our carbon reduction strategy focuses on in energy management across our o昀케ces, Water consumption 15% use of energy and natural resources, reducing GHG emissions from material including the centralisation of heating and Waste output 14% such as water, and e昀昀orts to reduce waste. sources across Scope 1, Scope 2 and cooling, as well as operational changes, The EMS provides all Allianz entities with selected parts of Scope 3, with a particular including the closure of o昀케ces and the In alignment with the Allianz Group target clear standards and controls, supports focus on business travel and energy increasing transition to public cloud of RE100 by 2023, we have procured 100% environmental data collection, promotes consumption. The categories currently computing away from local data centres. renewable electricity for our o昀케ces and transparent reporting of environmental included in Scope 3 are energy-related 53 emissions, business travel and paper use. data centres since 2021. impacts and improves environmental management governance practices. 52 The energy target only re昀氀ects the targeted energy consumption in o昀케ce buildings; however, the respective emissions associated with the energy use of non-o昀케ce sites, such as local data centres, remote working and public cloud are incorporated into our overall corporate footprint. 53 Since 2021, 100% of the electricity used by AllianzGI in its o昀케ces and local data centres has come from renewable sources. This was achieved through agreements with suppliers on ”green tari昀昀s” and the continuous sourcing of unbundled EACs for renewable electricity in regions where green tari昀昀s are not available yet. Allianz Global Investors Sustainability and Stewardship Report 2023 86

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.4 Managing the environmental impact of our operations GHG emissions – breakdown by source and proportions in tons tCO2 equivalents* Reducing energy consumption The ongoing transition away from per employee Our 2025 target is to reduce energy local data centres towards public 3.8 consumption in our o昀케ce buildings by cloud computing also further 9% against the 2019 baseline. decreased the use of non-o昀케ce-related In 2023, we achieved a 35% decrease electricity consumption. per employee in our energy consumption We expect the expansion of these energy- across o昀케ce buildings (2022: 14%), saving initiatives to facilitate a long-term 2.0 despite an increase in o昀케ce presence decrease in our energy consumption in 1.6 in comparison with 2022. 2024 and beyond. 1.5 GHG target These reductions come from more e昀케cient Energy consumption accounted for 30% by 2025: tCO2e/employee 0.9 1.8 tCO2e energy management and changes in the of AllianzGI’s total emissions in 2023 per employee operation of our business. Sample actions (2022: 46%), to a large extent from include centralised regulation of heating heating our o昀케ce buildings. In comparison and cooling in o昀케ces, including switching with the global 2019 baseline, we have 2019 2020 2021 2022 2023 o昀昀 the system out of hours, the rolling achieved an energy-related emissions baseline out of winter and summer energy savings reduction of 72% (2022: 59%). Since 2021, *tCO2 equivalents = tCO2e programmes and o昀케ce refurbishments 100% of the electricity we use in o昀케ce Travel Paper Energy (total) and consolidations across Europe. buildings and local data centres has come Changes in our business structure also led from renewable sources. Where heating Target: 52% reduction by 2025 (against 2019 baseline). is not powered by renewable electricity, Actual: 57% reduction 2019–2023. to the decrease of our business activity in the US market, resulting in a reduced we work to 昀椀nd more sustainable energy Source: Allianz Global Investors, as at 31 December 2023. workforce and o昀케ce space closures solutions in the market. In line with Allianz Group’s intermediate Capturing the full scope of the impact of that contributed towards the decline in target to achieve a 65% reduction in GHG our operations, particularly by looking at our energy consumption. We are also emissions across its operations by the end the emissions along our entire value chain introducing tailored minimum building of 2029, we have put initiatives in place to of the 昀椀rm, is equally important. We will standards to align energy and building reduce our footprint GHG emissions, which gradually extend our measurement of management across our locations. are closely monitored throughout the year. emissions and impact to upstream and downstream activities that we identify as material. Allianz Global Investors Sustainability and Stewardship Report 2023 87

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.4 Managing the environmental impact of our operations Energy consumption from office buildings in gigajoules (GJ) per employee This is a transition solution that signals to For commuting, we support employees the markets to meet demand with real- to use low carbon options. In 2023, 84% 19.2 world solutions. of our headcount worldwide had access 17.0 16.6 Reducing emissions from to o昀케ces with a “green” commuting plan 14.4 Energy business travel and infrastructure in place to support it consumption (2022: 84%). 12.5 target by 2025: Business travel accounted for 70% of GHG 17.5 GJ per emissions from our operations in 2023 A considered approach towards business employee travel is crucial to stay below our 2025 (2022: 53%). GHG business travel target, and to GJ/employee As it is our highest source of emissions, gradually decrease associated emissions we have committed to achieve a 41% in line with Allianz’s 2030 intermediate reduction in GHG per employee from targets for operations. business travel by 2025 against the In addition, a careful review and 2019 baseline. enforcement of our global travel policy 2019 2020 2021 2022 2023 Overall, we achieved a 44% reduction in will support the consideration of more 54 baseline travel emissions per employee against our sustainable ways of travelling, including Target: 9% reduction by 2025 (against 2019 baseline). baseline emissions in 2019 (2022: 60%). less 昀氀ying. Actual: 35% reduction 2019–2023. See chart on page 87. The lifting of global Source: Allianz Global Investors, as at 31 December 2023. travel restrictions post-Covid-19 led to Reducing paper use an increase in face-to-face interactions, By the end of 2023, AllianzGI had Increasing use of This is achieved through agreements including team reunions, client meetings achieved a reduction of 77% in paper used renewable electricity with suppliers on “green tari昀昀s” and and event attendance. This has caused per employee against a 2019 baseline As a signatory of the RE100 initiative, the continuous sourcing of unbundled a rise in kilometres travelled, particularly (2022: 74%). We continue to exceed the and in line with its speci昀椀c ambitions, Energy Attribute Certi昀椀cates (EACs)55 via air travel, which increased business reduction target set at 20% by 2025. Allianz Group committed to source 100% for renewable electricity. travel emissions compared with the Paper consumption represents less than renewable electricity for its group-wide The purchase of credible unbundled previous year. 1% of our global carbon footprint from operations by 2023. EACs helps meet our goals in the short operations. We use paper mainly for AllianzGI has been RE100-compliant since to medium term, especially in countries external communications with clients, with 2021, using 100% renewable electricity where renewable electricity cannot yet a smaller amount used for internal o昀케ce across its o昀케ces and local data centres. be readily sourced through green tari昀昀s. printing, stationery and business cards. 54 Restated in 2022 due to adjustments of calculation methodology of energy consumption including our 2019 baseline. 55 EACs are an instrument used to document and track the production, distribution and consumption of renewable energy. They do not represent the electricity itself (as they are unbundled from production), but allow us to prove that the energy we use is directly attached to electricity produced at a speci昀椀c, identi昀椀able renewable energy site. Allianz Global Investors Sustainability and Stewardship Report 2023 88

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.4 Managing the environmental impact of our operations 3 Paper consumption in kilograms (kg) per employee Water consumption in cubic metre (m ) per employee 27.4 35.4 19.4 Paper 26.0 24.9 consumption target by 2025: Water 22kg per consumption 9.4 employee 3/employee 12.7 target by 2025: kg/employee m 11.4 3 7.0 22m per 6.3 employee 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 baseline baseline Target: 20% reduction by 2025 (against 2019 baseline). Target: 15% reduction by 2025 (against 2019 baseline). Actual: 77% reduction 2019–2023. Actual: 51% reduction 2019–2023. Source: Allianz Global Investors, as at 31 December 2023. Source: Allianz Global Investors, as at 31 December 2023. Our ongoing e昀昀orts include sourcing Reducing water use By the end of 2023, we achieved a 51% O昀케ce closures, o昀케ce consolidations and sustainably certi昀椀ed paper for internal Minimising water consumption is a water use reduction against the 2019 moving to more sustainable buildings and external use (2023: 68% of total paper key principle of the Allianz Group baseline (2022: 56%). also had a positive impact. However, the used; 2022: 66%) and further reducing Environmental Guidelines. Over the years, we have managed to return of o昀케ce-based working in 2023 led paper consumption. We are also using Our operations are solely o昀케ce-based. decrease water consumption through the to an increased use of water, particularly less paper as a result of digitalisation We therefore concentrate on using reduced operation of air-conditioning by canteens in Germany that operated (including subscriptions), and closing water e昀케ciently. We have committed systems, installation of water-saving at roughly twice the capacity than in corporate print centres. to reduce water use per employee in facilities and equipment in our bathrooms the prior year. To increase the accuracy AllianzGI o昀케ces by 15% by 2025 against and kitchens, and adapting cleaning of consumption data, we have installed a 2019 baseline. measures across our canteens. separate water meters in o昀케ces with shared utilities, which informs our actions and results. Allianz Global Investors Sustainability and Stewardship Report 2023 89

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.4 Managing the environmental impact of our operations Principle 8 Waste output in kilograms (kg) per employee and canteens and an increased focus on and compliance requirements, as well donating IT and o昀케ce furniture. as our sustainability expectations. 149.0 In some locations, waste collectors The AllianzGI Global Procurement provided actual weights instead of Policy has been updated to harmonise Waste output estimates, which led to greater accuracy and align with the Allianz Group Vendor target by 2025: and therefore large variances in Code of Conduct. 89.7 128kg per reported waste outputs in comparison to We are also enhancing procurement 75.3 82.3 employee prior years. processes to ensure sustainability is 61.8 We adopted the global Allianz Group best considered throughout each phase of kg/employee practices for removing single-use plastic the procurement lifecycle. We expect our from our operations across all our o昀케ces. suppliers to embed sound sustainability In 2023, 86% of our headcount is in an practices within their organisation and to o昀케ce with a dedicated plan to sustainably promote similar practices within their own eliminate the presence of single-use supply chain. We do this by embedding 2019 2020 2021 2022 2023 plastic (2022: 87%). The plan includes requirements into sourcing projects baseline reusable takeaway boxes in our canteens and when onboarding suppliers into Target: 15% reduction by 2025 (against 2019 baseline). and providing only reusable, re昀椀llable or our systems. Actual: 59% reduction 2019–2023. recyclable supplies in kitchens. We are implementing the requirements of We will continue driving the global the German Supply Chain Act. In line with Source: Allianz Global Investors, as at 31 December 2023. this regulation, we must publish a report expansion of our waste-reducing by 2025 about how AllianzGI assesses and Driving down waste our European locations. The latter initiatives and work with colleagues to We aim to minimise waste and reuse and led to the signi昀椀cant accumulation encourage waste reduction behaviours. protects human rights and environmental- recycle materials. Our operations mostly of special waste from construction, related rights within its own business area generate household-type waste, and our decluttering and discarding of items that Sustainable procurement and the greater supply chain. target is to drive down waste by 14% by cannot be reused or donated. Waste- Our commercial relationships with 2025 against a 2019 baseline. reducing initiatives included: expanding suppliers and partners around the globe centralised procurement for orders; enable us to encourage sustainable By the end of 2023, we achieved a 59% vendor management collaborations to business practices and adopt reduction per employee against the 2019 reduce packaging; takeback schemes for them ourselves. baseline (2022: 45%). IT equipment; avoidance of plastic and One role of our Procurement team is to This further reduction was achieved single-use products across all kitchens consolidate the supply base towards despite higher o昀케ce occupation and preferred suppliers that meet our business ongoing o昀케ce refurbishments across Allianz Global Investors Sustainability and Stewardship Report 2023 90

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.5 Driving our corporate citizenship Supported by our commitment to shape Local Engagement Groups Corporate volunteering In 2023, we continued to support causes a more resilient society, we work for Part of this framework involved the launch and donations that are important to our employees positive social impact and in the spirit of Local Engagement Groups (LEGs) in An encouraging outcome from the through donations, including our end-of- of the UN Sustainable Development June 2023, which support colleagues to LEGs was their impact on employee year donations, which supported over Goals (SDGs). organise activities, such as networking volunteering. In 2023, more than 1,600 30 charities. We remained focused on Our approach to corporate citizenship groups or volunteering activities, relating employee volunteering hours were helping communities where we work and Our activities prioritise SDG 8, Decent to community issues they care about. recorded, over twice the number of live, promoting 昀椀nancial literacy and Work and Economic Growth, which aims These employee-led groups work to hours in 2022. education among the future generations to “promote sustained, inclusive, and strengthen our colleagues’ sense of We have also developed new guidelines and supporting e昀昀orts to protect the sustainable economic growth, full and inclusion and belonging and support them for corporate employee volunteering environment and nature. Our donation productive employment, and decent work to create change in their communities. that we will roll out in 2024. They include to UNICEF’s Skills4Girls programme will for all.” Our actions to support SDG 8 We work across departments internally guidance for volunteering during help to empower young girls around are also closely linked with SDG 13, to coordinate volunteering activities in working hours, either as part of LEG the world with quality education and Climate Action and SDG 17, Partnerships LEGs and exchange best practices and activity or on colleagues’ own initiative. skills development. for the Goals. In line with the Allianz ideas through regular community calls. AllianzGI employees worldwide will be Group corporate citizenship strategy, These activities also act as valuable eligible for three days of volunteering future generations are a key focus of networking forums for colleagues. time each year. Alongside this initiative we our approach. Response to the LEGs has been very will launch a global online platform that New corporate citizenship framework positive, with 11 active groups across o昀昀ers volunteering opportunities to make our o昀케ce locations to date. Some of it easier for employees to 昀椀nd and sign up In 2023, we established a new framework these new groups have already brought for activities locally. for our 昀椀rst ever global corporate colleagues together – to clean up parks Our global charitable contributions citizenship programme, which will be or neighbourhoods to support World procedure has also been updated to ready to launch in 2024. It is designed Cleanup Day in September 2023. re昀氀ect donations that are aligned with to harness employees’ enthusiasm for LEG activities through 2023 engaged our social impact relating to SDGs 8, 13 corporate citizenship, accelerate it on a more than 1,200 employee participants, and 17. global platform, and clearly identify the and over 1,100 volunteering hours were social impacts to which it contributes. registered. During the year, we also The framework, which is aligned with took our 昀椀rst steps towards focusing on Allianz Group focus, will also give neurodiversity, working to raise awareness colleagues direction and support to put and reduce the barriers to discussing their ideas into practice. the topic. Allianz Global Investors Sustainability and Stewardship Report 2023 91

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.5 Driving our corporate citizenship Promoting 昀椀nancial literacy 昀椀nancial literacy and employability – literacy education for young people. Supporting vulnerable communities and employability have been identi昀椀ed as global themes. In the UK, our employees partnered with We support communities where we live As an active asset manager we aim to We will encourage our local o昀케ces to St Luke’s Community Centre on several and work, especially in times of need. play our part in achieving UN SDG 8: initiate 昀椀nancial literacy projects, in initiatives to promote employability. As well as our end-of-year donations promoting 昀椀nancial literacy, education collaboration with local or global trusted They include mentoring students aged supporting food banks across the globe, in and employability. social organisations. 16-18, sharing tips in a LinkedIn workshop, 2023 our colleagues contributed their time In 2023, we con昀椀rmed six impact In Germany, we continued to support IW teaching skills on new job searches and and resources to initiatives that support objectives that guide our corporate Junior’s “Fit für die Wirtschaft”, as well as interviews and joining a “Steps to Success” disadvantaged groups. citizenship approach, and two of these – BVI’s Hoch im Kurs to provide 昀椀nancial careers event. Protecting local environments World Cleanup Day is a global movement that unites more than 200 countries and Promoting 昀椀nancial literacy is a global theme for AllianzGl, with local execution territories for a cleaner planet through local waste and litter collection e昀昀orts. In 2023, 45 colleagues from AllianzGI AllianzGI corporate citizenship strategy & impact objectives across Italy, France and Germany volunteered for 66.5 hours for the clean-up, collecting 300kg of rubbish together with other Allianz Group Globally driven 昀氀agship projects Locally led corporate Globally and locally driven operating entities. SDGs 8 & 17 focused volunteering activities charitable partner SDGs 8, 13 and 17 recommended SDGs 8, 13 and 17 prioritised Financial literacy Education Employability Climate action Environment Combatting cost of living Source: Allianz Global Investors, 2023. Allianz Global Investors Sustainability and Stewardship Report 2023 92

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 04.6 Looking ahead: strengthening sustainability in our operations Supporting innovation among future generations Looking ahead: strengthening sustainability in our operations AllianzGI engages with communities to To further support our employees and develop our business operations we will: exchange ideas and solutions that address the challenges of a sustainable future. Our three-year partnership with the Creating an inclusive and Corporate citizenship Strengthening internal International Green Gown Awards supportive workplace controls aims to encourage the next generation • Continue to build on learnings from • Roll-out our enhanced global corporate • Enhance our capabilities to meet to participate in this important topic. LEGs, strengthening their understanding citizenship framework, which is and exceed the requirements of the The awards are administered by the of their role and training them with designed to maximise our impact. EU’s Digital Operation Resilience Act Alliance for Sustainability Leadership in DEI insights. (DORA), which comes into force in 2025. Education (EAUC) and supported by the • Provide opportunities for employees UN Environment Programme to recognise • Build learning pathways for strategic worldwide to have three days • Streamline our regulatory compliance exceptional sustainability initiatives at workforce planning. of volunteering each calendar and reporting processes, so we can keep universities and colleges across the globe. • Enhance our capabilities for monitoring year, as part of the corporate stakeholders informed as efficiently In 2023, two new categories: Nature and reporting DEI metrics, including the citizenship programme. as possible. Positive and Diversity, Equity and Inclusion application of learnings from the UK • Support this increase in volunteering • Continuously prepare for “horizon in Sustainability, were introduced to the roll-out of mandatory diversity metrics. time by launching a global online threats”, such as the use of AI and awards programme. Matt Christensen, • Prepare for compliance with the 2023 platform to make it easy for employees quantum computing in cybercrime. Global Head of Sustainable and Impact Supply Chain Due Diligence Act in to find volunteering opportunities that • Monitor developments in AI and Investing, joined the CEO of EAUC in Germany, which requires organisations are fully verified by the firm, and to sign crypto assets and ensure we are a video to discuss the signi昀椀cance of to assess human rights risks across their up for activities locally. aligned with the EU’s 6th Anti Money tackling climate change and the shared own value chain, including their own Laundering Directive. visions between the academic and workforce. AllianzGI will be subject to corporate worlds. this regulation from 2024. Read more about the International Green Gown Awards here. Allianz Global Investors Sustainability and Stewardship Report 2023 93

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 05 Appendices Allianz Global Investors Sustainability and Stewardship Report 2023 94

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 05.1 UK Stewardship Code Index 2020 United Kingdom Stewardship Code Principle Section Page 1 Signatories’ purpose, investment beliefs, strategy, and culture enable stewardship that creates 01.1 Introducing Allianz Global Investors 03 long-term value for clients and bene昀椀ciaries leading to sustainable bene昀椀ts for the economy, 01.2 About this report 04 – 05 the environment and society. Sustainability governance structure 06 – 07 2 Signatories’ governance, resources and incentives support stewardship. Sustainability governance structure 06 – 07 Sustainability resources at AllianzGI 07 – 08 01.4 A year of achievements 09 – 11 03.1 Developing our engagement strategy 40 – 41 3 Signatories manage con昀氀icts of interest to put the best interests of clients and bene昀椀ciaries 昀椀rst. 03.9 Transparently managing con昀氀icts of interest 71 – 72 04.3 Ensuring responsible business conduct 82 – 85 4 Signatories identify and respond to market-wide and systemic risks to promote a well-functioning 01.4 A year of achievements 09 – 11 昀椀nancial system. 01.5.1 Our view of the market 12 – 13 Assessing the most important elements of sustainability 14 – 16 02.3 Sustainability methodologies and analytics 25 – 27 02.4 Climate-related risks and opportunities 28 – 29 02.5 Sustainability risk management 30 02.6 Sustainable investing categories 31 – 37 03.6 Industry engagement and commitments 59 – 60 5 Signatories review their policies, assure their processes and assess the e昀昀ectiveness of 01.2 About this report 04 their activities. 02.3.1 Leveraging ESG data 25 – 26 03.8.2 Strengthening our voting policy 66 04.3 Ensuring responsible business conduct 82 – 85 6 Signatories take account of client and bene昀椀ciary needs and communicate the activities and 01.1 Introducing Allianz Global Investors 03 outcomes of their stewardship and investment to them. 01.5.2 Assessing the most important elements of sustainability 14 – 16 Prioritising innovative investment solutions and client advisory 16 – 17 7 Signatories systematically integrate stewardship and investment, including material environmental, 02.2 Sustainability research 22 – 24 social and governance issues, and climate change, to ful昀椀l their responsibilities. 02.5 Sustainability risk management 30 02.6 Sustainable investing categories 31 – 37 03 Active Stewardship 39 – 73 8 Signatories monitor and hold to account managers and/or service providers. 02.3.1 Leveraging ESG data 25 – 26 03.2.3 Selecting and engaging with fund managers 45 03.8.1 Ensuring a robust voting process 65 0.4.4 Sustainable procurement 90 Allianz Global Investors Sustainability and Stewardship Report 2023 95

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 05.1 UK Stewardship Code Index 2020 United Kingdom Stewardship Code Principle Section Page 9 Signatories engage with issuers to maintain or enhance the value of assets. 03.1 Developing our engagement strategy 40 – 41 03.2 How we engage 42 – 45 03.3 Engagement in numbers 46 – 48 03.4 Engagement outcomes 49 – 56 10 Signatories, where necessary, participate in collaborative engagement to in昀氀uence issuers. 03.5 Collaborative engagements 57 – 58 03.6 Industry engagement and commitments 59 – 60 11 Signatories, where necessary, escalate stewardship activities to in昀氀uence issuers. 03.7 Escalating engagement concerns 61 – 63 03.8 Exercising our voting rights 64 – 70 12 Signatories actively exercise their rights and responsibilities. 03.8 Exercising our voting rights 64 – 70 Allianz Global Investors Sustainability and Stewardship Report 2023 96

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations Key 05.2 Engagements E Environmental S Social G Governance C Climate engagement O Other engagements Company E S G C O Company E S G C O A2A SpA ASMedia Technology Inc AbCellera Biologics Inc ASML Holding NV Accor SA Assa Abloy AB ADEKA Corp Assicurazioni Generali SpA Adif Alta Velocidad AT&T Inc Advanced Micro-Fabrication Equipment Inc China Atlas Copco AB Air Liquide SA AXA SA Akamai Technologies Inc Baltic Classi昀椀eds Group PLC Alchip Technologies Ltd Banco Bilbao Vizcaya Argentaria SA Alcon Inc Bank of America Corp Alibaba Group Holding Ltd Bank of the Philippine Islands Amadeus IT Group SA Barclays PLC Inc Barry Callebaut AG Ambu A/S BASF SE American Express Co Bechtle AG Amplifon SpA Befesa SA ams-OSRAM AG Beijing-Shanghai High Speed Railway Co Ltd Anheuser-Busch InBev SA/NV BellRing Brands Inc Anhui Conch Cement Co Ltd Bethel Automotive Safety Systems Co Ltd Anhui Expressway Co Ltd BHP Group Ltd Anjoy Foods Group Co Ltd BioGaia AB AP Moller – Maersk A/S Biotalys NV APERAM SA Bloomsbury Publishing PLC Applied Materials Inc Boliden AB ArcelorMittal SA Bouygues SA Archer-Daniels-Midland Co BP PLC Ardagh Group SA Brenntag SE Arkema SA Bridgestone Corp Arrow Home Group Co Ltd Broadcom Inc Aryzta AG The Brooklyn Union Gas Co Asahi Diamond Industrial Co Ltd Bunge Ltd Ashmore Group PLC BYD Co Ltd Asia Cement Corp BYD Electronic International Co Ltd Allianz Global Investors Sustainability and Stewardship Report 2023 97

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 05.2 Engagements Company E S G C O Company E S G C O CANCOM SE CVR Energy Inc Chevron Corp Daiei Kankyo Co Ltd China Construction Bank Corp Daiichi Sankyo Co Ltd China Hongqiao Group Ltd Daikin Industries Ltd China Jushi Co Ltd Daio Paper Corp China Mengniu Dairy Co Ltd Danone SA China National Building Material Co Ltd Daqo New Energy Corp China Overseas Land & Investment Ltd Darling Ingredients Inc China Petroleum & Chemical Corp DBS Group Holdings Ltd China State Construction Engineering Corp Ltd Dechra Pharmaceuticals Ltd China State Construction International Holdings Ltd Denso Corp China Tourism Group Duty Free Corp Ltd Deutsche Boerse AG China Yangtze Power Co Ltd Deutsche Pfandbriefbank AG Chocoladefabriken Lindt & Spruengli AG Deutsche Post AG Chroma ATE Inc Deutsche Telekom AG Cie de Saint-Gobain SA DFS Furniture PLC Cie Generale des Etablissements Michelin SCA Digital Core REIT Management Pte Ltd CITIC Securities Co Ltd Diploma PLC Citigroup Inc Diversi昀椀ed Energy Co PLC CK Hutchison Holdings Ltd Drax Group PLC Cleveland-Cli昀昀s Inc DSM-Firmenich AG Coloplast A/S DSV A/S Commerzbank AG East Japan Railway Co Concordia Financial Group Ltd Ebara Corp Contemporary Amperex Technology Co Ltd Edenred SE Continental AG EDP – Energias de Portugal SA Costco Wholesale Corp EDP Renovaveis SA Covestro AG Elis SA Cranswick PLC Elkem ASA Crowdstrike Holdings Inc Encavis AG CSL Ltd Enel SpA CTBC Financial Holding Co Ltd Engie SA CTT Systems AB Equinix Inc Allianz Global Investors Sustainability and Stewardship Report 2023 98

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 05.2 Engagements Company E S G C O Company E S G C O Estun Automation Co Ltd Hermes International SCA Euro昀椀ns Scienti昀椀c SE Hexagon AB Eva Airways Corp Hexpol AB Evotec SE Hitachi Ltd Exxon Mobil Corp Hornbach Holding AG & Co KGaA Farmland Partners Inc Hoshine Silicon Industry Co Ltd Fast Retailing Co Ltd HSBC Holdings PLC FedEx Corp Hsin Kuang Steel Co Ltd Formosa Plastics Corp Huhtamaki Oyj Fortum Oyj Hundsun Technologies Inc Fresenius SE & Co KGaA Hyundai Motor Co Galaxy Entertainment Group Ltd Iberdrola SA Gamma Communications PLC Iccrea Banca SpA General Electric Co IG Group Holdings PLC General Mills Inc Imerys SA General Motors Co Industria de Diseno Textil SA Genus PLC INEOS Group Holdings SA Georg Fischer AG In昀椀neon Technologies AG Gigabyte Technology Co Ltd Inner Mongolia Yili Industrial Group Co Ltd Ginkgo Bioworks Holdings Inc Intel Corp Gloria Material Technology Corp Intermediate Capital Group PLC Goldwind Science & Technology Co Ltd International Consolidated Airlines Group SA Grafton Group PLC Internet Initiative Japan Inc Grifols SA Interroll Holding AG Hana Financial Group Inc Intesa Sanpaolo SpA Hangzhou Oxygen Plant Group Co Ltd Iren SpA Harbour Energy PLC J Front Retailing Co Ltd Hargreaves Lansdown PLC Jason Furniture Hangzhou Co Ltd HDFC Bank Ltd Jenoptik AG Heineken NV JET2 PLC Hella GmbH & Co KGaA JMDC Inc HelloFresh SE Johnson & Johnson Henan Liliang Diamond Co Ltd JOST Werke SE Allianz Global Investors Sustainability and Stewardship Report 2023 99

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 05.2 Engagements Company E S G C O Company E S G C O JPMorgan Chase & Co Mitsubishi UFJ Financial Group Inc Kao Corp Mitsui Fudosan Co Ltd Kerry Group PLC Mitsui Mining & Smelting Co Ltd Kingspan Group PLC Mizuho Financial Group Inc KION Group AG Moonpig Group PLC KNOW IT AB Morinaga Milk Industry Co Ltd Koninklijke Ahold Delhaize NV Muyuan Foods Co Ltd KWS Saat SE & Co KGaA NARI Technology Co Ltd Kyoritsu Maintenance Co Ltd National Grid PLC LEG Immobilien SE Naturgy Energy Group SA Legrand SA NatWest Group PLC Linde PLC Neste Oyj Lion Travel Service Co Ltd Nestle SA Lloyds Banking Group PLC Netcompany Group A/S LONGi Green Energy Technology Co Ltd NextEra Energy Inc L'Oreal SA Nine Dragons Paper Holdings Ltd Luxshare Precision Industry Co Ltd Nippon Steel Corp LVMH Moet Hennessy Louis Vuitton SE NOF Corp Macnica Holdings Inc Norcros PLC Mainfreight Ltd Norma Group SE Man Group PLC Norsk Hydro ASA MarketAxess Holdings Inc Northland Power Inc Marsh & McLennan Cos Inc Nutrien Ltd Marubeni Corp OCI NV Mastercard Inc OMV AG MediaTek Inc Orange SA Mediobanca Banca di Credito Finanziario SpA Orano SA Medios AG Orsted AS Mercedes-Benz Group AG Owens Corning Merck KGaA Pactiv Evergreen Inc Micron Technology Inc Panasonic Holdings Corp Microsoft Corp Paradigm Biopharmaceuticals Ltd Midea Group Co Ltd PBF Energy Inc Allianz Global Investors Sustainability and Stewardship Report 2023 100

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 05.2 Engagements Company E S G C O Company E S G C O Pegavision Corp SK Hynix Inc PepsiCo Inc Socionext Inc PetroChina Co Ltd SOITEC Petroleos Mexicanos Sojitz Corp PG&E Corp Sompo Holdings Inc Primo Water Corp Sony Group Corp Prysmian SpA Sopra Steria Group SACA PZ Cussons PLC SSE PLC Reliance Worldwide Corp Ltd Stabilus SE Repsol SA Starbucks Corp Rio Tinto PLC STMicroelectronics NV Rohto Pharmaceutical Co Ltd Stora Enso Oyj Rotork PLC Stroeer SE & Co KGaA RWE AG Sumitomo Forestry Co Ltd S&P Global Inc Sumitomo Mitsui Financial Group Inc Safran SA Sungrow Power Supply Co Ltd Salesforce Inc Suzhou Maxwell Technologies Co Ltd Samsung Electronics Co Ltd Symrise AG Sanyo Special Steel Co Ltd T&D Holdings Inc SAP SE Taiwan Cement Corp Schneider Electric SE Taiwan Mask Corp SCOR SE Taiyo Yuden Co Ltd Scout24 SE Tate & Lyle PLC Sealed Air Corp TC Energy Corp Serica Energy PLC TechMatrix Corp Shell PLC Technip Energies NV Shenzhen Kangtai Biological Products Co Ltd Telefonica Deutschland Holding AG Shinhan Financial Group Co Ltd Teleperformance SE Ship Healthcare Holdings Inc Tencent Holdings Ltd SIG Group AG Tesla Inc Sika AG Teva Pharmaceutical Industries Ltd Simplo Technology Co Ltd Thermo Fisher Scienti昀椀c Inc SITC International Holdings Co Ltd Thule Group AB Allianz Global Investors Sustainability and Stewardship Report 2023 101

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 05.2 Engagements Company E S G C O Company E S G C O thyssenkrupp AG Worldline SA/France Tokyo Electron Ltd Wuestenrot & Wuerttembergische AG Tongwei Co Ltd Xinyi Solar Holdings Ltd TotalEnergies SE XP Power Ltd Toyota Motor Corp Yantai Jereh Oil昀椀eld Services Group Co Ltd Trelleborg AB YFY Inc Trina Solar Co Ltd Yuexiu Property Co Ltd UBS Group AG Yum China Holdings Inc Ulvac Inc Zalando SE UNEDIC ASSEO Zhejiang Jingsheng Mechanical & Electrical Co Ltd UniCredit SpA Zijin Mining Group Co Ltd Uniphar PLC Uni-President Enterprises Corp United Overseas Bank Ltd UnitedHealth Group Inc Universal Microwave Technology Inc UPM-Kymmene Oyj Urban Logistics REIT PLC Van Lanschot Kempen NV Venustech Group Inc Veolia Environnement SA Verizon Communications Inc Vestas Wind Systems A/S Vidrala SA Vinci SA Virbac SACA Volkswagen AG Wacker Chemie AG Wanhua Chemical Group Co Ltd Wienerberger AG Wintershall Dea GmbH Wizz Air Holdings Plc Woodside Energy Group Ltd Allianz Global Investors Sustainability and Stewardship Report 2023 102

      01 Our vision of 02 Sustainable 03 Active 04 Strengthening sustainability 05 Appendices sustainability investing stewardship in our operations 05.3 Sustainability initiatives overview This is an overview of our sustainability initiatives and memberships, demonstrating our active involvement in these initiatives. Initiative Allianz Global Description Date Topics Region/Country Investors‘ Position of Scope 30% Club France Member The purpose of the 30% Club France Investor Group is to engage with SBF120 2021 – Inclusion and France companies on gender diversity to drive systemic change on company boards and present Diversity (I&D) within senior management teams and to develop best practices and recommendations to make SBF120 companies more inclusive, diverse and sustainable. 30% Club Germany Member The purpose of the 30% Club is to engage with companies on gender diversity to drive 2023 – Inclusion and Germany systemic change on company boards and within senior management teams and to present Diversity develop best practices and recommendation. Association Francaise Member AFG is the French Asset Management Industry Association. Since ESG, Corporate France de la Gestion inception Governance 昀椀nanciere (French (1961) – Asset Management present Association – AFG) Member Corporate The Corporate Governance Committee of the AFG aims to promote best governance Since Governance Committee practices in the French marketplace, improve practices at French issuers and discuss inception proxy-related issues, such as the role of proxy advisors and shareholder activism. (1961) – present Member Technical Standing committee organises the working groups, such as the SRI label, the ESR 2019 – Committee Responsible indicators or the energy transition law and others. Committee aims to be a place for present Investment sharing information on current regulations, initiatives and promotion responsible investment. Asian Investor Group Member The Asia Investor Group on Climate Change (AIGC