01 Our sustainability approach 02 Sustainable investing 03 Active stewardship 04 Corporate sustainability 05 Appendix 03.2 How we engage Principles 7 9 Shaping sustainable pathways towards change Uruguay: sustainability-linked bond issuance Following our engagement with Uruguay’s Debt Management Office, its first labelled bond was launched in October 2022. The country partnered with the EMIA Enhanced Labelled Bond Inter-American Development Bank Principles. These introduce significant to prepare the framework to issue improvements over prevailing bond a sustainability-linked bond (SLB). standards and encourage an elevated The structure has a coupon step- level of transparency and more down mechanism3 that is activated stringent terms and conditions. if Uruguay reaches environmental targets set in line with its Naturally The USD 1.5 billion 12-year issue was Determined Contribution (NDC) to the more than two times oversubscribed Paris Agreement. Uruguay worked and was placed with investors across alongside the Emerging Markets geographies, capturing high appetite Investors Alliance (EMIA) to ensure for sovereign debt issues with a the SLB is consistent with the sustainability focus. 3 Coupon step-down: a debt instrument with a high coupon in earlier payment periods and a lower coupon in later payment periods. Allianz Global Investors Sustainability and Stewardship Report 2022 67