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