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