01 Our sustainability approach 02 Sustainable investing 03 Active stewardship 04 Corporate sustainability 05 Appendix 04.3 Ensuring responsible business conduct Principles 3 5 Our license to operate is 04.3.1 Three Lines of built on the trust that our Defence framework The first line of defence is performed by investors, employees and Responsibility for ethical business conduct the respective business functions through and risk management is an integral part the management of day-to-day activities. other stakeholders place in our of our business processes spanning the The business functions are responsible for performance and integrity. entire value chain, from client onboarding designing and implementing adequate and portfolio risk management to controls to manage risks and returns related A key component is the personal ethical ensuring personal information is treated to activities assigned to them. behaviour of all our employees worldwide. with utmost care. The second line of defence provides Their actions are guided by global policies independent oversight of employees’ and ethical standards, as well as a robust Risks are addressed as part of an adherence to the company’s regulatory and mature internal control framework overarching reporting and controlling requirements and internal policies, as well (Three Lines of Defence) that facilitates framework. This covers qualitative and as the risk-taking and controls conducted and ensures employees manage business quantitative risks for each function along by the first line. The second line of defence ethically and in compliance with internal three lines of defence. The distinction is performed by Legal and Compliance procedures and regulatory requirements. between the different lines of defence and Risk Management, which oversee and is principle-based and determined advise the first line of defence. by activity: The third line of defence is performed by Internal Audit, which independently assesses the governance and internal control systems, processes and compliance with risk principles, performs quality reviews of risk processes, and tests adherence to business standards, including the internal control framework. Allianz Global Investors Sustainability and Stewardship Report 2022 110