Introduction In conversation with our Global Head of Investments Principle 1 and Global Head of Sustainable and Impact Investing Alongside this, our new impact framework blended finance as an access point to the architecture and infrastructure to is being used on the equity and debt sides seek to address climate problems across deliver Article 8 and 9 solutions, and we of our private markets work, as well as at a the globe. Scale is key and blended are targeting a steady journey to achieve fund level to feed into our direct investing. finance as a technique is something we long-term scalability. need to pay attention to and draw in Innovation around funding is more investors. We’re already doing this in What do you predict we will see critical in delivering sustainability emerging markets and the same technique over the next few years in terms objectives. How do you see blended could be applied to developed markets. of sustainable investing? finance playing an increasing role in We are at an inflection point – as people We think demand for sustainable delivering sustainable, long-term impact? become more receptive to seeing the track products will increase dramatically We’ve focused over the past several record on these financings, we can start to with the accumulation of wealth in a years on our ambition to gather expect growth in interest from more third- generation that has been focused on more private markets funding around party investors. sustainability for longer than those climate and the needs of emerging of us who are closer to retirement. markets across the SDGs. Blended finance How is AllianzGI evolving its This is a change that has already started. is about directing private markets funding approach for a low-carbon future? One of the big challenges we will need into investments that have historically What we see happening with the to overcome is the issue of so much been the domain of development finance impact of events in Ukraine and the disparate regulation, which has created institutions (DFIs). In emerging markets, volatility of energy markets are tests along significant complexity. More consistency there often isn’t enough capital to fund the way as sustainable investing continues across regions would make it easier to infrastructure projects and the idea is that, to become mainstream. We must maintain invest in sustainable products in different by working together, private investors a long-term mindset and put our building places. Europe is on a forward roll and carry less risk and DFIs can make their blocks in place for the future we want collective will is not going away, as we money go much further. We’re also to shape. You cannot simply turn on the have both a bottom-up and a top-down increasingly involved in the equity and switch for a net zero system today, but you agreement about the critical importance debt side of blended finance in emerging can thoughtfully plan for tomorrow and of sustainable solutions. Overall, I’m very markets on projects that have a climate we are pragmatic about moving towards a positive about the trajectory we are on, change element. We have a tripartite lower-carbon world. Decarbonisation and and how we’re increasingly living and agreement with Allianz to see how we net zero alignment are complex, and breathing sustainability right across our can positively impact climate-related we are developing solutions which firm. Progress on sustainability takes outcomes. But an increasing number we believe are credible, practical and partnership and collaboration with clients, of third-party investors are looking at scalable. We’ve worked hard to set up colleagues, regulators, communities and all our other stakeholders. Allianz Global Investors Sustainability and Stewardship Report 2022 08