01 02.4 Sustainable investing categories continued Principle 7 Introduction 02 Sustainable investing 02.1 B uilding our approach to Introduction to blended finance sustainable investing Blended finance is a technique used to attract large- Blended finance approach: de-risking via blending 02.2 S ustainability research and scale commercial capital into emerging markets for data and analytics – our strong sustainable development. Blended finance tends to foundation Senior investors 02.3 Sustainability risk management include a combination of commercial or “private capital” 02.4 S ustainable investing categories at a senior position and development or “public capital” Private capital at a junior position. The junior capital absorbs certain Local impact by investing 03 risks within a portfolio of debt or equity investments alongside Development Active stewardship (e.g., credit losses, currency) and therefore provides as anchor investor alongside other Finance Institutions in risk mitigation to commercial investors. institutional investors First loss sustainable projects 04 protection AllianzGI as a sustainable business AllianzGI manages a number of blended Junior investors and companies. finance strategies. 05 Public capital Appendix Shaping pathways for a sustainable future Debt investments with positive impacts In 2021, one of our impact-focused strategies made need to comply with defined energy-efficiency minimum The team will actively engage with the asset to two debt investments, one of which involved a standards (eg, refurbishment needs to cause at least discuss the impact and raise awareness towards real estate company specialising in senior citizens’ 30% of energy-efficiency improvements). impact and improve the generated impact of the housing and assisted living real estate, providing On an annual basis the company will report to the company. The transaction supports the following care facilities to low-income elderly and disabled Impact Investment team on the impact of the assets SDGs: SDG 3 (Good Health and Well-Being); SDG people. The transaction provides the company funds financed. These will include (but not be limited to): 10 (Reduced Inequalities); and SDG 11 (Sustainable to finance investments to defined social purposes Cities and Communities). and environment objectives. • Total number of beds provided. “Social purposes” includes promoting access to essential • Implementation of energy-monitoring systems healthcare services for elderly or vulnerable people. The across properties to provide tools to control energy majority of the company’s property portfolio is operated and water consumption, and to improve the by municipalities or not-for-profit operators, resulting in efficient use of energy and water. affordable healthcare housing for low-income elderly • GHG and water utilisation intensity (in this case and disabled people. “Environmental objectives” means Scope 3). that new construction and/or renewals of buildings