AllianzGI Stewardship Statement Engagement strategy At AllianzGI, engaging in dialogues with investee feedback, challenging corporate practices and seeking companies is an integral part of the investment process. change, and, in rare circumstances, public interventions. Our investment professionals interact with companies on The most common engagements are around strategy, a regular basis and use these interactions as an opportunity operational and financial performance, capital for engagement. All investment professionals are management, corporate governance and proxy voting involved in engagement activities. issues, as well as environmental and social practices of investee companies. While our preference is to engage Our engagement strategy rests on two pillars: investee companies confidentially, we are prepared to escalate engagement activities publicly if we conclude that Risk-based approach: Our risk-based approach focuses on the confidential approach has gone as far as it can without the material ESG risks that we identify. Targeting is closely delivering progress, and that our engagement objective related to the size of our exposure, whether per market, would be best served by escalation. fund or considering total value of investment. The focus of engagements is determined by considerations such as Engagement can take various forms, including: significant votes against company management at past – Electronic correspondence general meetings and sustainability issues that we identify – F ace-to-face meetings and conference calls with investor as below market practice. Engagements can also be relations, executive directors and senior management, triggered by controversies connected to sustainability or board chairpersons and non-executive board members, governance. Engagement activities typically relate to an company secretaries, as well as heads of operational, investee company’s strategy, operational or financial controls and sustainability functions performance, capital management, corporate governance – F ormal letters to boards and management and ESG risks and impacts. – D iscussions with company advisers and other external stakeholders Thematic approach: We also lead themed engagement – P roxy voting and communication of voting decisions projects. These are either linked to our three strategic to investee companies sustainability themes – climate change, planetary – D ialogue and collaboration with other shareholders boundaries and inclusive capitalism – or related to – P ublic interventions, through co-filing/filing shareholder governance themes within specific markets or more broadly. resolutions, speaking at shareholder meetings, and We identify thematic engagement projects based on topics commenting in the media. that we deem to be important for our portfolio investments, for example energy transition or climate change. We AllianzGI sees stewardship as an ongoing process, which is prioritise them based on the size of our holdings per market not limited to the circumstances where escalation is deemed or portfolio, and factor in the priorities of our clients. We necessary. For example, we would engage in dialogue with observe on these particular topics – climate change and the chairperson or a non-executive director of our investee the energy transition – an increasing number of requests companies even if there are no material concerns to from clients for engagement. address. We believe this two-pronged approach will allow us to As an active investment manager, AllianzGI sees engagement achieve better balance between ESG risk reductions in as a way to reduce investment risk, help improve corporate our portfolios and leading clients and companies on an performance and better assure long-term business inclusive transition pathway to a sustainable future. The prospects of investee companies. Consequently, while we approach also improves our ability to set out engagement keep records of our engagements and positive stewardship objectives clearly at the outset. outcomes, we consider success of our engagements an integral part of our investment performance. All AllianzGI’s All direct engagements will be coordinated between engagement notes and outcomes are available on our AllianzGI’s internal stakeholders in a transparent and global collaboration system, thus allowing all portfolio inclusive way using our global collaboration system. managers and analysts to reflect these in their investment Our engagement activities include monitoring, providing decisions. 10