01 03.1 Our engagement approach continued Principles 7 9 Introduction 02 Sustainable investing 03 How engagement has differed for funds, AllianzGI’s engagement in numbers Active stewardship assets or geographies Shaping pathways for a sustainable future In 2021, we engaged companies on 299 occasions in 03.1 Our engagement approach Our engagement activities are applicable to all Boosting funding for mostly virtual engagement meetings (2020: 303) and 03.2 Engagement outcomes our public market activities, comprising equity and covered 482 topics (2020: 491). We often engaged on by theme fixed-income strategies. Within fixed income, certain the SDGs in Uruguay more than one topic per company. 03.3 Collaborative engagements teams have developed more nuanced approaches In addition, we reached out to 203 companies under 03.4 E scalation where initial to embedding sustainability in their stewardship our CEWO approach. We engaged with 88% of engagement is not enough processes. These consider differences in investment We regularly engage Emerging Markets companies amounting to 95% of these companies’ 03.5 I nfluencing companies through strategies and time horizons, as well as the different sovereigns to discuss and encourage financing aggregate emissions, collecting information on climate proxy voting types of portfolio entities they hold (eg, listed, unlisted of SDGs. Typically, we do this via conference strategy, governance around the strategy and the full 03.6 Conflicts of interest subsidiary, sovereign, quasi-sovereign). For example, calls, participating in panels and organised scope of the decarbonisation pathway. As of year end, 03.7 Industry engagement our Emerging Markets Debt team follows a specific field visits. In 2021, due to the pandemic, 63% of companies had provided a response. While most and commitments engagement approach that rests on an integrated risk our engagement moved fully to virtual modes, of this was achieved through answers to very specific factor modelling framework to assess non-financial we held three conference calls (in May, July and questionnaires for each company, we completed 13 04 risks that may impair counterparty creditworthiness. specific engagement meetings related to this approach, AllianzGI as a sustainable business The team regularly runs meetings with sovereign issuers, October) and shared views on a conference where it raises ESG topics for engagement. This allows panel (March) with the Debt Management which are included in our engagement statistics. 05 us to better understand what may support or hinder Office (DMO) of Uruguay. Appendix the potential attainment of specific ESG outcomes We engaged on the country’s thematic bond in a certain sovereign. In this context, engagement issuance plans and on how to upgrade the also offers the opportunity to exercise a measure of country’s systems of budget expenditure tracking influence on a sovereign by raising important ESG and monitoring for the purpose of improved issues, indicating that our clients care about them, reporting under different types of thematic and clarifying the set of standards that we consider bond structures. In the course of our discussions, essential for investing in a certain issuer in our we shared experience we gained from other sustainability-focused portfolios. engagements, specifically with government bodies in Nigeria and Mexico. In those cases, with support from the United Development Program, the countries developed a system of budget expenditure tagging and tracking for similar purposes. On their environmental efforts more specifically, we also discussed Uruguay’s plan to develop hydrogen power capacity. Outcome: the DMO took on board the suggestions around peer experiences for budget expenditure tagging and tracking and indicated they would study their applicability to the Uruguayan Treasury set-up. For 2022 we plan to engage further on this topic and more broadly, on funding for the SDGs.