EuRoSIf EuRopEaN SRI TRaNSpaRENcy coDE - DEcEmbER 2021 allianz Epargne actions ISR Solidaire is a fund targeting • In the aREf fund family, where an Rcp policy is incorpo- financial performance by selecting companies whose social rated for aREf III, social issues such as fair wage and qualities are deemed to be of superior quality. our social treatment are covered. strategy aims both to protect the portfolio against social • Employee diversity: in future European transactions, there risks, but also to take advantage of the most advanced might be a specific focus on the employment of refugees companies in this area. The social criteria we take into with a willingness to be integrated into the European account concern different levels of the value chain, from society; progress against targets to be monitored. the company's relationship with its suppliers to the life of the product and its impact on society, including the mana- gement of the company's human capital. 4.6) Do the funds engage in securities lending AREF Fund Family (*) activities? at this time, allianzGI have a number of clients who speci- our products aim to contribute to meet our clients’ targets fically request that we participate in securities lending in on environmental (“E”), but also social (“S”) goals. their segregated portfolios, and in these cases, we have The “S” for “social” is one of the components the IEQ team arranged an agency lending agreement with a third party measures when investing in Renewables. There are several provider. To facilitate timely return of holdings (e.g. to metrics to measure the “social” impact of a renewable accommodate sale, dividend, proxy Voting or corporate energy asset and one of them is the gender equality / per- action purposes), our current lending arrangements contain sonnel diversity. Diversity has been one of the aspects guarantees referring to this, allowing for securities on loan considered in aREf III, the aREf fund family’s latest vehicle to be recalled in a timely manner. The counterparty selec- which has a focus on investments in the uS. tion process does not formally integrate ESG criteria. In aREf III, the IEQ team adopted a Responsible contractor Allianz Global Multi-Asset Credit SRI, policy (“Rcp”) for investments in renewable energy projects. Allianz Global Credit SRI (*) Developed in partnership with the North america’s building Trades unions (“NabTu”), the Rcp policy aims at fostering from 15 December 2021, all funds listed above ceased to bidding by unions on construction and maintenance contracts have permission to engage in securities lending. prior to this, attached to the investment projects, requires performance securities lending was permitted but never implemented. reporting from contractors and promotes fair wages, benefits, gender equality and diversity as well as working conditions for those engaged in the invested projects. 4.7) Do the funds use derivative instruments? as another example of our invested assets improving the The funds may use derivatives, though in practice this does social acceptance of wind projects, it is worth recounting not happen frequently. The use and constraints are outlined the experience with our project “Windpark Köhlen”. one in the prospectus for each fund. Generally speaking, the and a half years ago, we started a re-labelling of our wind following derivatives can be used: interest-rate futures, energy turbines at the windfarm in order to reduce the equity index futures and interest-rate swaps. See below for light disturbances caused by the flashing of the rotors to more information per fund. the local communities. In general, and depending on the technology, project Allianz Global Multi-Asset Credit SRI, location and permitting, more and more social metrics are Allianz Global Credit SRI (*) assessed in our aREf fund family. below are some examples. • The impact of noise and vibration on residents and busi- The funds do use derivatives, primarily for hedging currency nesses from an asset under construction, which is to be and interest rate risk. The use and constraints are outlined measured by our Epc (engineering, procurement, construc- in the prospectus for each fund. The instruments used most tion) contractors and supervised within the construction frequently are forward fX and bond futures. The Global supervision tasks of our engineers. multi-asset credit SRI fund makes use of short positions in • Health and safety metrics such as accident rates, disability equity index futures to hedge credit risk (it may not own access, security, labour standards in procurement policy long positions). The Global credit SRI fund has also used (or similar), affordable workforce housing, social enterprise Index credit Default Swaps (cDS) to manage credit risk partnering, community development (and as to be compi- exposure. led in the Epc and/or o&m (operation and maintenance agreements). 34