01 02.4 Sustainable investing categories continued Principle 7 Introduction 02 Sustainable investing 02.1 Building our approach to 02.4.3 Impact-focused financing gap of the SDGs – thus improving health innovation in economic systems requires substantial sustainable investing and education, reducing inequality, tackling systemic mobilisation of capital and effort. As public equity 02.2 Sustainability research and Our impact approaches are focused on enabling risks such as climate change and working to preserving struggles to meet the full list of characteristics of impact data and analytics – our strong clients to invest with both their financial objectives and oceans and forests.. investments, the SDGs create an avenue that enables foundation their sustainable goals in mind. We aim to support effective investment for environmental and social 02.3 Sustainability risk management those investors who want to see a positive change The greater quantification of impact returns can help outcomes in public markets. For the world, that means 02.4 Sustainable investing categories for the planet while generating a return. Our impact support financial returns and, as non-financial returns a larger pool of public capital that can now be used to investing approaches – in both public and private become an increasingly important factor, they could finance the transition towards positive change. Using 03 markets – provide solutions to do so. Impact investing help to drive returns for investors. The more that the the SDGs as a basis for opportunity-based sustainable Active stewardship contributes to material positive environmental and/ industry can quantify and qualify those non-financial investment strategies allows investors to focus on key or social outcomes that can be measured using KPIs returns, the more likely these will not only complement, environmental and social issues, backed by a globally 04 against specific goals that are often consistent with the but also support financial returns. recognised organisation with an independent and AllianzGI as a sustainable business United Nations Sustainable Development Goals (SDGs). Supporting the UN Sustainable objective view on societal challenges. 05 While investors have become increasingly aware of the Development Goals (SDGs) To better structure the investment universe, we have Appendix role their capital can play in addressing environmental Defined with the intention of mobilising global defined eight core themes out of these 17 broader and social concerns, the challenge has been to combine leadership and economies towards a more sustainable goals. This allows us to effectively focus our investments this with the need to deliver a financial return. Impact and equitable future, the UN SDGs have brought a on companies with outputs that actively contribute to investing offers an answer by providing a credible and substantial shift in the industry’s approach to sustainable attainment of the targeted outcomes. scalable pathway to balance a targeted measurable investing. While the regulatory and behavioural aspects and beneficial environmental and/or social impact of the SDGs are being addressed by public authorities, with a financial return. Impact investing has transitioned from the realm of Our SDG themes and the SDGs they support direct private-market investments into a significant and expanding market segment, with an increase in Social Inclusion Food Security available investment options. Investors can now gain exposure through fixed income, equities and real assets, as well as in private equity and venture capital Health (Innovation and Promotion) Clean Water investment vehicles. AllianzGI’s impact investments can be accessed through private markets (eg, private equity impact fund of funds) or public markets (eg, green bonds). Impact investing also extends to our Financial Inclusion Clean Land/Circular Economy blended finance approaches, where investment from institutions and philanthropic funds can be combined to create opportunities to generate impact, especially in Education Clean Air/Energy Transition emerging markets, which are de-risked for commercial investors. This helps to mobilise large-scale private capital for development in developing countries and See page 88 for more information on these SDGs 1 supports closing the estimated USD 2.5 trillion annual 1 https://www.oecd-ilibrary.org/sites/6ea613f4-en/index.html?itemId=/content/component/6ea613f4-en.