AllianzGI Sustainability Risk Management Policy Statement Page 3 I PURPOSE AND OBJECTIVES This policy shall outline the principles that apply to the manner in which sustainability risks (“Sustainability Risks” means an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact o n the value of the investment; ) are taken into account in financial instruments on behalf of the funds and discretionary mandates (the “Clients”) for which any of the Allianz Global Investors entities listed in Appendix 1 (herein referred to as “Allianz G lobal Investors”) act as appointed investment manager. In particular, this Statement outlines Allianz Global Investors’ approach to, inter ‐ alia, its regulatory obligations and highest industry standards resulting from applicable rules, regulations and appl icable global regulatory principles. II APPLICABLE AREA This Statement is applicable to the management of assets by Allianz Global Investors. It applies for listed equities, listed corporate fixed income, sovereign bonds, multi - asset and private markets . Certain exceptions may apply to specific investment assets where Sustainability Risk management for technical reasons cannot be applied. This Statement is not applicable to funds and discretionary mandates where Allianz Glo bal Investors has delegated the portfolio management to a third - party asset manager. III DETAILS OF THE RISK MANAGEMENT POLICY 1. Introduction 1.1 Sustainability Risk Management Strategy Objective Sustainability Risk management processes aim at achieving optimal investment outcomes according to our Clients’ investment objectives and to achieve a better risk - adjusted investment performance over a market cycle. They also endeavor to analyze and where possible minimize the adverse sustainability impact of invested projects and corporates in the mid - to long - term of assets under management. Allianz Global Investors’ Sustainability Risk management strategy addresses two dimensions: • Analysis and managemen t of Sustainability Risks. • Analysis and consideration in the investment process of potential negative, adverse impact on the environment, social and employee matters, human rights and/ or impacts which may be connected to governance issues such as corrupt ion and bribery (“Principal Adverse Impact”). 1.2 Relevance of Sustainability Risks Sustainability Risks may have the potential to influence the investment performance of portfolios negatively. Allianz Global Investors considers Sustainability Risks to be potential drivers of financial risk factors in investments such as market price risk, credit risk, liquidity risk and operational risk. Sustainability Risk factors are principally considered as mid - to long - term investment risks , while they can also materialize in the short - term. They may materialize along any of the three dimensions: environmental, social and/or governance risks. There is research evidence that Sustainability Risks may materialize as issuer specific extreme loss - risks. Such issuer specific Sustainability Risks events typically happen with low frequency and probability but may have high financial impact and may lead to significant financial loss. It is Allianz Global Investors’ investment belief that Sustainabili ty Risks need to be analyzed and managed holistically through fundamental research and active stewardship. Our Sustainability Risks management approach aims to ensure that