01 Our sustainability approach 02 Sustainable investing 03 Active stewardship 04 Corporate sustainability 05 Appendix 03.2 How we engage Principles 7 9 public data from reputable institutions – We believe EM sovereign engagement rather than arbitrarily assigned numerical must adopt a long-term approach. scores – supports meaningful and Raising issues and monitoring change Shaping sustainable pathways towards change objective engagement discussions and or, at a minimum, establishing a rapport minimises potential impacts of political over ESG issues with sovereigns supports economy sensitivities, data challenges and the fiduciary duty to our clients and helps Uzbekistan: improving governance different political cycles. It also provides to increase the ESG outcomes achieved. the opportunity to raise important ESG For example, in the area of fiscal and Our proprietary sovereign ESG framework scores Uzbekistan at issues that our clients care about and debt transparency, our engagement takes to clarify the set of standards that we place over repeated interactions and often 4.5 out of a maximum of 10.2 consider essential for investing in a over a lengthy period to deliver results. certain issuer in our sustainability-focused The governance score (2.3) weighs that will help to detect corrupt practices. portfolios. Finally, engagement helps us In 2022, we conducted over 30 official on the overall rating, while the A new public procurement law is being to gain insight into the mechanics and engagement meetings or touch points environment (6.7) and social (6.6) adopted with an online platform for incentives systems at play in specific with EM sovereign delegations over scores are above average. In October public procurement. This will increase sovereign policy areas. specific ESG topics. These included 2022, our lead sovereign analyst on transparency, including of beneficial country visits to Azerbaijan, Costa Rica, Uzbekistan met with representatives ownership of contracting companies, Dominican Republic, El Salvador, Ghana, from the Central Bank, the Ministry of and reduce opportunities for corruption. Kazakhstan, Kenya, Panama, Uruguay Finance, local corporates/banks and The Listening to the Citizens of and Uzbekistan. They also included the World Bank. Discussions focused Uzbekistan (L2CU) initiative was also London-based roadshows and virtual on the very low Worldwide Governance highlighted. This system is designed to meetings with finance ministries, debt Indictor score from the World Bank capture the views and wellbeing of a management offices and central banks and the Corruption Perception Index representative group of people as the as well as national planning ministries, from Transparency International. country embarks on its ambitious reform state-owned enterprises and donors. Discussions highlighted that Uzbekistan initiatives. Finally, there were discussions is making significant progress. It has around the issuance of green and undertaken several key judicial reforms SDG bonds, which Uzbekistan is and established a Supreme Judicial keen to develop and is working with Council and anti-corruption agency. advisors on a framework which meets There is a planned asset and income international norms. declaration scheme for public officials 2 Rating as of January 2023. Allianz Global Investors Sustainability and Stewardship Report 2022 66