2. Our climate strategy We see a diverse set of both climate risks (transition and physical) and opportunities in the short, medium and long term through the value of assets we manage on behalf of our clients. Integrating climate risks and opportunities into our investment products remains at the core of our business model. At the same time, we take seriously the operational climate risks and opportunities faced by AllianzGI as a corporation. Climate-related risks Climate-related risks may have a significant negative impact on the value of assets we manage, the standing of the investment products we sell, and our corporate activity. In the short term we see the policy and reputational risks that our investee companies are exposed to as the leading climate-related risks that may affect investments. In the medium term, market and technology risks of climate transition may develop more substantially, and we expect acute physical risks to emerge more frequently. From a long- term perspective, we think that chronic physical climate risks can become more significant. Climate-related risks In other parts of AllianzGI Policy and reputational risk of investee companies In the next two years, increased policy ambition can be expected to reach the Paris Agreement goals*, which is likely to translate into stricter regulatory and policy action. This will potentially increase investee company compliance costs or exert reputational pressure on company climate profiles. Market and technology risks of climate transition, as well as emergence of physical risks Larger economic trends like energy transition and further policy action are likely to exacerbate pressure in the next two to 10 years on fossil fuel producers. Higher costs may occur in areas increasingly exposed to physical climate risks. Chronic physical climate risks In areas exposed to high physical risks, due to more frequent extreme weather events anticipated in the next 10 years, there may be an increase in disruption to business services thus leading to a higher risk of economic distress and future losses. Corporate and operational Short term: reputational risks Mid term: policy risks from climate transition Long term: physical climate risks to operations Opportunities Short term: shift in market demand for climate products Term Mid Long Short * Holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature to 1.5°C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change. AllianzGI Climate Policy Statement 3