EuRoSIf EuRopEaN SRI TRaNSpaRENcy coDE - DEcEmbER 2021 Thus, the eligibility of an issuer is determined by the absence This model enables us to analyse more than 20+ ESG cri- of any alert on its overall profile and especially on Human teria for approximately 80 sovereigns. Rights. This investment rule enables the fund to avoid Allianz Strategiefonds Wachstum Plus, issuers under controversy on specific topics and to keep in its investment universe companies where we believe the Allianz Best Styles US Equity (*) ESG profile could have strong improvement potential, the aim being to be able to finance companies which have not climate change considerations enter by excluding securities proceeded yet to their energy transition to a business model from (a) issuers that derive more than 10% of their revenue aligned with the goal of the paris agreement. from thermal coal extraction and (b) utility companies that The last step of the analysis is focused on the credibility of the generate more than 20% of their revenues from coal in line issuer’s approach regarding its transition to a low carbon with the allianzGI SRI Exclusion policy. In addition, securities model. We want to favour Green bonds from issuers who from issuers where more than 30% of their electricity produc- really have set up a sound strategy to mitigate the nega- tion is based on coal are excluded according to allianzGI tive environmental impacts of their activities and we want firm-wide exclusions. In the portfolio construction based to avoid supporting issuers for which we think the use of on the remaining eligible universe, the portfolio’s carbon the Green bond market has been made more for commu- footprint is managed, and a reduction of greenhouse gas nication / marketing purpose without real ambition and emissions compared to the market index is targeted. commitment towards future generations. Allianz Best Styles Europe Equity SRI, Allianz Green Transition Bond Allianz Best Styles Global Equity SRI (*) The strategy invests notably in green bonds, in bonds from climate change considerations enter by excluding securities corporate issuers having committed to SbTi and in emerging from (a) issuers that derive more than 10% of their revenue market sovereign bonds with a preference for those showing from thermal coal extraction and (b) utility companies that a better environmental performance and a credible transi- generate more than 20% of their revenues from coal in line tion strategy. Specific criteria are integrated in the structure with the allianzGI SRI Exclusion policy. In addition, securities of the different buckets of the portfolio as describe below: from issuers where more than 30% of their electricity produc- tion is based on coal are excluded according to allianzGI Green Bond bucket firm-wide exclusions. moreover, securities from issuers are criteria specific to climate change are constantly integra- excluded which are involved in the production of arctic ted into portfolio construction as our fundamental analysis drilling, production and / or exploration of oil sands with starts by assessing whether a bond is green or not. This more than 5% of revenues, or which are involved in the assessment relies on three steps: the alignment of the bond production of hydraulic fracturing and/or which provide structure with the Green bond principles, the analysis of services in relation to hydraulic fracturing of more than 5% the projects financed to make sure that they are aligned of their revenues. In the portfolio construction based on the with our list of eligible projects, and the analysis of the remaining eligible universe, the portfolio’s carbon footprint issuer’s climate strategy. is managed, and a reduction of greenhouse gas emissions SBTi corporate bonds bucket compared to the market index is targeted. The fund also invests in bonds from issuers having commit- AREF Fund Family (*) ted to SbTi with the aim to identify companies with credible decarbonisation pathways, leaders in the way towards net In each of the aREf fund family products, the carbon emis- zero. The SbTi criteria is integrated as a basis of bond sions avoidance is measured and monitored. The impact selection for this bucket. on carbon emission reduction of the operational project is EM Sovereign bucket compared to a “business-as-usual” national scenario. The The fund seeks opportunities in emerging economies that information on emissions per mWh for each country is based are transforming themselves, by implementing a model on the “Total Supplier mix”, which is taken from the study for sustainable growth. It avoids those sovereigns that are “European Residual mixes. Results of the calculation of reluctant to change and the ones with a poor ESG perfor- Residual mixes for the calendar year 2018” published by mance. To identify the best sovereign bonds, we rely on the association of Issuing bodies on 28 may 2019 (Version a model designed to analyse the sustainable behaviour 1.1) as of today, our carbon reporting fulfils the require- and performance of governments in emerging markets. ments of all our investors and is aligned with the french Energy Transition Law in its article 173. 29