01 Our sustainability approach 02 Sustainable investing 03 Active stewardship 04 Corporate sustainability 05 Appendix 03.2 How we engage Principles 2 7 9 Our investment views are influenced Having identified the need for training accelerate transition activities, provide 03.2.2 Emerging market sovereigns by the outcomes of engagements and for Investment teams, the Stewardship appropriate climate-related disclosure Engagement with emerging market outcomes are linked to the proxy voting team developed a bespoke curriculum and adequately respond to climate (EM) sovereigns is part and parcel of our process, forming a consistent stewardship and delivered sessions to all Fixed Income change risks. investment process. The Fixed Income approach. All engagement results are Investment teams. Eight engagement team follows a specific engagement shared via our collaborative research and training sessions were held in 2022, As an outcome of our work in 2022, approach that rests on integrated risk investment platform and can be accessed reaching just over 90% of our Fixed Income we have established a more robust factor modelling to assess non-financial by our teams globally. investment professionals globally. and consistent process and approach risks that may impair a country’s ability to to engagements in fixed income. At the repay its debt. Our engagement approach differs across In addition to internal collaboration, same time, we remain mindful that a different funds, assets and geographies. we have continued to work with external more nuanced approach to embedding Our EM Fixed Income (EMFI) investment organisations such as the European sustainability in stewardship processes process fully integrates ESG considerations 03.2.1 Fixed income engagement Leveraged Finance Association where we within fixed income should exist, for which are set by the EM ESG sovereign Engagement activities apply to all public are members of the ESG Committee and example dependent on time horizons, framework. This framework uses twenty market activities, comprising equity from 2023 have board representation. the nature of the underlying instrument, publicly available indicators spanning E, and fixed income strategies globally. In 2022 we helped facilitate discussions strategy or turnover and portfolio size. S and G supplied by international institutions In 2022, we enhanced the coordination of with stakeholders around ESG and think tanks to quantitatively assess engagement activities in fixed income by engagement in high yield/leveraged Looking ahead EM Sovereigns, supported by our own adding regular dedicated dialogues for loans; and we seek to improve market Enabling our investment professionals qualitative analysis. The EM ESG framework our corporate credit strategies. practice around collaboration among to conduct engagements is a high is maintained and regularly updated investors in these asset classes. priority for us. In 2023, we will publicly and shared on our website. The process is overseen by a working continue to offer stewardship- group on fixed income engagement, The constraints on further development related training to our investment The EMFI team regularly runs meetings including our Global CIO Fixed Income. of fixed income engagement are professionals across public and with sovereign issuers to discuss ESG The benefits of setting up the working market broad. To shape the required private markets. In the first quarter, topics. This allows us to understand what group are already being realised. change, we joined the IIGCC we held engagement training may support or hinder the potential In several cases, we combined the Bondholder Stewardship Working Group. sessions for our Equity investment attainment of ESG outcomes in a certain expertise of the Stewardship, Equity and Members work together to improve professionals and offered dedicated sovereign. The framework enables us Fixed Income teams in joint engagement bondholder stewardship practices sessions for fund managers in Asia to engage in more tailored and deeper meetings and shared the outcomes via our to encourage high-emitting issuers and Europe. discussions with the EM sovereigns we collaborative investment platform. to develop credible transition plans, invest in. Focusing discussions on reliable Allianz Global Investors Sustainability and Stewardship Report 2022 65