01 Introduction and strategy 02 Measuring and managing sustainability 03 Climate change related disclosure 04 Strengthening our foundation 05 Our universal principles 05.4 Our expanded sustainability governance Investment-related processes Comprehensive climate risk management processes cover all major asset classes: • Climate scenarios are analyzed by inter- departmental teams under the joint lead of the AIM Risk and Investment Analytics and AIM ESG teams. • Both physical and transition risks are assessed based to a large extent on quantitative KPIs, making use of the climate stress-tests discussed. • Risks are actively managed for the total portfolio, supported by our ESG scoring approach ( see section 02.2.1.3 ). • On physical risks, we seek to identify potential impacts on physical assets we own, as well as impacts on client or investee level and associated portfolios ( see section 03.4.1 ). • Maintaining active dialogue with asset managers and investee companies on climate strategies integrates into risk management framework. Measures to manage our risks are based on two major levers: 1. Adapt asset allocation: • Shift volumes towards zero carbon assets (mid-term). • Increase exposure to companies leading the transition (all sectors). • Increase of blended finance volumes. • Reduce exposure to climate laggards per sector. • Fossil fuel guidelines. 2. Enhance climate change readiness of existing assets: • Broad engagement, bilateral dialogue and participation in global initiatives like CA100+ or IIGCC. • Real Estate: Steer and align real estate portfolio with CRREM pathways (1.5 ̊C pathway). • Reduce emissions in line with IPCC pathways for infrastructure portfolio. • For physical assets with direct material ownership like real estate and infrastructure, dedicated asset-level adaptation plans are implemented based on thorough location-sharp physical risk assessments. • The Allianz Climate Change Risk Solutions (ACCRiS) tool ( see section 03.4.2 ) will be used for new acquisitions and for portfolio assessment. • The energy sector is covered by the NZAOA-related sector targets for Utilities and Oil and Gas. • Dedicated asset manager engagement is in place. 05.4.7 Allianz Group Sustainability Network The wider sustainability network spanning the entire Allianz Group includes: • Sustainability Leads responsible for coordinating and leading sustainability integration in their respective operating entities. • Sustainability/ESG experts and centers of competence in group-level business functions (P&C, L&H, investments, asset management) as well as in our group centers (procurement, operations, etc.). • Local Environment Officers responsible for managing the environmental footprint of our operations. • Non-Financial Data Coordinators responsible for sustainability reporting. • Corporate Citizenship Leads who drive social impact activities and partnerships. 153 Allianz Group Sustainability Report 2022