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