01 Our sustainability approach 02 Sustainable investing 03 Active stewardship 04 Corporate sustainability 05 Appendix 03.2 How we engage Principles 7 8 9 03.2.3 Selecting and engaging with capabilities, portfolio construction, For exchange traded fund (ETF) fund managers and sustainability efforts are evaluated strategies, we meet with providers on a In the context of engagement and fund- and compared to competitive strategies. quarterly basis and discuss the provider’s of-funds approaches, the research and sustainable products and policies. This can selection of fund managers is a major Assessing sustainability capabilities and be done by offering input on the evolution focus of our multi-asset department. In the processes is a crucial and integral part of of sustainable screens and KPIs and last two decades, we have developed and the manager selection process. We have providing advice on which markets are enhanced our fund research capabilities developed an in-house ESG rating well served by sustainable products and to independently and systematically process to assess this in a systematic way. which need further product development/ select the most promising managers When analysing an ESG/sustainability launches. We also ask how providers deal in the relevant liquid asset classes. strategy, we look at the engagement with regulations (particularly disclosure), We diligently follow a stringent process approach including proxy voting, encouraging transparency so that we are for every strategy and collate findings in engagement reporting and transparency. fully equipped to make decisions and 4 answer queries from our clients. a central shared database, called MARS. The process is the same for every manager While we are not allowed to enforce that we analyse. our own engagement guidelines or The funds we recommend for investment alter the investment process of target are regularly screened for compliance with Ongoing dialogue with clients fund managers, who are responsible for our standards, including sustainability shows that demand for sustainable managing retail money, we do ask for aspects. We continue to improve and strategies has been rising for years. details on proxy voting, engagement enhance this process by updating our We continuously enhance our research process and portfolio composition. questionnaire at least annually – or and selection process to adapt to Our detailed questionnaire looks at whenever there are significant changes, changes in the regulatory environment whether there is a proxy voting policy such as changes in the regulatory and fulfil the requirements of our clients. in place and its guidelines, if proxy environment – and incorporating new As part of this, we undertake a deep voting is done internally or delegated regulatory changes to offer our clients our and comprehensive due diligence that to an external provider, and how the most promising sustainable strategies. encompasses fund manager interviews engagement process works. We go into and an exhaustive questionnaire (RFP). detail on prior examples of engagement Important considerations such as and their outcomes during personal investment philosophy, team and research meetings with managers. 4 Manager Research And Selection. Allianz Global Investors Sustainability and Stewardship Report 2022 68