01 01.4 Acting on climate risks and opportunities Principle 4 Introduction 01.1 In conversation with Tobias Pross and Matt Christensen 01.2 About AllianzGI As an active investor, we look for Climate strategy • In the short term, policy and reputational risks of our 01.3 W hat sustainable investing innovative ways to reallocate capital According to the World Economic Forum’s Global Risks investee companies are the leading climate-related means to us Report 2022, failure of climate change mitigation and risks that may affect investments. 01.4 Acting on climate risks to support a climate transition that adaption come first in a list of the top ten global risks • In the medium term, market and technology risks and opportunities meets the goals of the Paris Agreement. over the next decade in the report’s annual survey 01.5 Sustainability governance associated with the climate transition may develop 01.6 Shaping sustainable investing As part of our commitment to increase of perceptions. more substantially, while acute physical risks may with our clients transparency and performance across In this context, we help our clients reflect climate risks emerge more frequently. our sustainable investment approach, and opportunities in their holdings. As a committed • In the long term, chronic physical climate risks could 02 member of the Net Zero Asset Manager initiative, we become more substantial. Sustainable investing we joined the Net Zero Asset Managers are supporting the goal of net-zero GHG emissions initiative in 2021 and published our first by 2050 in line with global efforts to limit warming to When it comes to the opportunities, initiatives that 03 1.5°C. Next to mainstream strategies, we offer climate enable and benefit from the climate transition are the Active stewardship annual Task Force on Climate-Related leading climate-related opportunities that may affect Financial Disclosures (TCFD) report. thematic and impact-driven opportunities such as green investments in the short term. In the medium and long 04 bonds, climate transition equity and private markets term, climate-related investment opportunities will arise AllianzGI as a sustainable business For investors to be able to make informed decisions, renewable energy investments. These specialised assets companies must report comprehensively on how they contribute to the alignment of an asset owner’s portfolio from competitive positioning and climate innovation. 05 are tackling dominant global long-term trends such as and its compatibility with climate transition targets. Integration of climate risks and opportunities Appendix climate change. The climate transition will create both investment opportunities and risks across all sectors A key belief in our philosophy surrounding climate in investment processes of the economy. Our industry has a crucial role to play investments is that public corporate disclosures AllianzGI’s dedicated sustainable investment team, in addressing climate change risks and opportunities on climate are not yet in-depth enough to inform portfolio managers and analysts collectively monitor through investment decisions and influencing investee simple rules-based strategies. We believe market and assess the science, regulatory response and companies and other institutions. inefficiencies on climate risks and opportunities exist, business implications of climate change (see page 22). and active research and corporate engagement are We examine the implications for individual issuers and For more information see our Climate Policy Framework necessary to tackle the dominant long-term global sectors and the ways in which climate change can be on our website trends comprehensively. a driver of investment performance. We will continue Climate-related risks and opportunities our engagement with companies on climate-related Climate risks are a crucial consideration when assessing issues and encourage them to report on TCFD and potential investments. As an active investor, we look for Science Based Targets(SBTs) to improve the quality of innovative ways to allocate new capital – and reallocate disclosures provided to our investors, positioning them existing capital – towards a climate transition that meets to meet their climate ambitions more precisely. Climate the Paris Agreement goals. change-relevant indicators are part of our Principal Adverse Impact assessment (see page 22). We support Transition and physical climate factors may pose a and implement the recommendations of the TCFD. For significant risk or opportunity in the short, medium and more information on climate-related risk management long term through the value of assets we manage on process, please read our 2021 report. behalf of our clients, the investment products at the core Read the TCFD report 2021 here of our business, and how we operate as a corporation.