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