AllianzGI Principal Adverse Impact Statement Page 4 2. Identification and prioritization of Pri ncipal Adverse Impact (PAI) and Indicators Allianz Global Investors considers principal adverse impact of prospective and active investments. We have a framework in place to identify and assess those impacts , which is based on the mandatory PAI indicators as defined by the EU Regulation on sustainability - related disclosure in the financial services sector 3 . In particular, w e have identified seve ral key indicators addressing all of the mandatory PAI dimensions and have developed a methodology to assess if an issuer is causing significant harm alongside one of these dimensions by assessing the issuer’s performance against the respective thresholds we defined per key indicator . Allianz Global Investors selected those key adverse impact indicators based on several factors such as data availability, data quality, applicability, probability of occurrence, and potential irremediable character. Allianz G lobal Investors considers the identified impacts and used indicators with the same priority , i.e., as soon as we identify that an issuer is doing significant harm on one dimension we flag the issuer as doing significant harm regardless of its performance a cross the other dimensions. 3. Actions to address, avoid or reduce Principal Adverse Impact In order to avoid or mitigate these principal adverse impacts, Allianz Global Investors considers principal adverse impact as follows. – For listed equities and corporate fixed income assets , Allianz Global Investors has implemented pre - trade warnings for investment in securities for which the issuer is doing signific ant harm across one of the mandatory principal adverse impact indicators. In addition, Allianz Global Investors performs a regular portfolio screening of Principal Adverse Impact risks along selected key performance indicators such as carbon emissions, exposure to sectors that are affecting climate change more than other sectors, human rights, and labour rights. – For private market investments , Allianz Global Investors considers Principal Adverse Impact risks during the origination and structuring phases , often through project and fund - specific due diligence questionnaires. Additionally, many of Allianz Global Investors’ private market as sets are subject to the Allianz ESG Integration Framework , which sets out criteria to be considered and met when investing in particular sensitive business areas. Investments are actively monitored through the asset management process, responding to material adverse changes of the PAI risk profile through engagement with management and sponsors of companies or in the case of indirect strategies with General Par tners ( GPs ) , in which Allianz Global Investors invests on b ehalf of our clients. In addition, Allianz Global Investors takes several actions to address, avoid or mitigate principal adverse impacts for liste d equities and corporate fixed income assets, including: ▪ Restricting investments - This covers: (1) exclusion of companies producing or associated with controversial weapons ; 4 and (2) Restriction of sanctioned sovereigns 5 . Allianz G lobal Investors has implemented a new global exclusion policy which cover s coal 6 and an extended scope of controversial weapons 7 . Further details can be found in our Exclusion Policy . 3 https://ec.europa.eu/info/business - economy - euro/banking - and - finance/sustainable - finance/sustainability - related - disclosure - financial - services - sector_en 4 Allianz Global Investors has put in place processes to identify and document the compani es that are to be excluded from investment based on the above - described criteria. This is applicable to mutual funds for which Allianz Global Investors is acting as management company. For institutional fund s and mandates, application of the criteria is s ubject to the consent of the respective clients. 5 Allianz Global Investors GmbH is highly committed to fully adhere to the various relevant Embargos and Economic Sanctions regulations as this regards our clients, employees, vendors and investments in our funds. 6 companies that derive more than 30% of their annual revenue from thermal coal extraction, and companies deriving more than 30 % of their electricity production from coal 7 companies involved in the development, production, use, maintenance, offering for sale, distribution, import or export, stora ge or transportation of: Anti - personnel mines, Cluster munitions, Biological weapons, Chemical weapons, Nuclear weapons outside of NPT (non - proliferation treaty), Depleted uranium weapons