01 Our sustainability approach 02 Sustainable investing 03 Active stewardship 04 Corporate sustainability 05 Appendix 02.4 Climate-related risks and opportunities Principle 4 Climate risks are a crucial consideration Integrating climate risks and as climate change. The climate transition A key belief in our philosophy when assessing potential investments. opportunities in investment processes will create investment opportunities and surrounding climate investments is Transition and physical climate factors Our Sustainable Investment team, risks across all sectors of the economy. that public corporate disclosures on may pose a significant risk or opportunity portfolio managers and analysts Our industry has a crucial role to play climate are not yet in-depth enough to in the short, medium and long term continuously monitor and assess the in addressing climate change risks and inform simple rules-based strategies. through the value of assets we manage science, regulatory response and opportunities through investment decisions Market inefficiencies on climate risks and on behalf of our clients, the investment business implications of climate change. and influencing investee companies and opportunities currently exist and active products at the core of our business, We examine the implications for individual other institutions. We published our second research and corporate engagement are and how we operate as a corporation. issuers and sectors and the ways in annual Task Force on Climate-related necessary to comprehensively tackle the which climate change can be a driver Financial Disclosures (TCFD) report in 2022. dominant long-term global trends. • In the short term, policy and reputational of investment performance. For more information see our Climate risks of our investee companies are the Policy Framework and annual TCFD We are shaping the pathway towards leading climate-related risks that may AllianzGI supports and implements the report on our website. net zero greenhouse gas emissions by affect investments. recommendations of the Task Force on • In the medium term, market and Climate-Related Financial Disclosures Climate strategy technology risks associated with the (TCFD), engaging with companies on We enable our clients to reflect climate risks climate transition may develop more climate-related issues and encouraging and opportunities in their holdings. As a substantially, while acute physical risks them to report on TCFD and Science member of the Net Zero Asset Managers may emerge more frequently. Based Targets (SBTs) to improve the initiative (NZAMi), we are shaping the 2050 • In the long term, chronic physical climate quality of disclosures provided to our pathway towards net zero greenhouse gas in line with global efforts to limit risks could become more substantial. investors to meet their climate ambitions emissions by 2050 in line with global efforts warming to 1.5°C. more precisely. Climate change-relevant to limit warming to 1.5°C. When it comes to climate-related indicators are part of our principal opportunities, initiatives that enable and adverse impact assessment. Next to mainstream strategies, we offer benefit from the climate transition are For more information on climate- climate thematic and impact-driven the leading opportunity that may affect related risk management process, opportunities such as green bonds and investments in the short term. In the please read our 2022 TCFD report. climate transition equity and private medium and long term, climate-related markets renewable energy investments. investment opportunities will arise For investors to be able to make informed These specialised assets can help to align from competitive positioning and decisions, companies must report an asset owner’s portfolio with climate climate innovation. comprehensively on how they are tackling transition targets. dominant global long-term trends such Allianz Global Investors Sustainability and Stewardship Report 2022 43