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