01 Our sustainability approach 02 Sustainable investing 03 Active stewardship 04 Corporate sustainability 05 Appendix Principles 4 7 02.5 Sustainability risk management We consider sustainability risks • Sustainability factors: Environmental, in our investment processes social and employee matters, respect for across all the assets we manage human rights, anti-corruption and anti- bribery matters. globally. All our investment • Sustainability risks: Environmental, strategies are ESG risk-assessed social or governance risk factors that, so that investment teams if they occur, could cause an actual or a can monitor ESG risks as part potential material negative impact on the value of the investment. of the investment process, In line with European regulation, although they do not necessarily AllianzGI considers sustainability actively incorporate ESG risks risks and PAIs of prospective and and opportunities into their active investments. investment decisions. • For publicly listed asset classes we have implemented a dedicated tool We apply portfolio and individual to systematically monitor and assess security level analysis across all assets sustainability risks. to ensure transparency on ESG risks • For private markets asset classes, ESG and principal adverse impacts (PAIs). risks are considered throughout the Sustainability risk factors can materialise investment process and ongoing asset along any of the three dimensions of ESG management activities. In many cases, investing. We consider sustainability risks they are specifically screened along to be potential drivers of financial risk sustainability risk guidelines, or using factors in investments, such as market minimum exclusion lists as defined by price risk, credit risk, liquidity risk and Allianz’s ESG Risk Framework. operational risk. We follow the EU SFDR Further detail is given in our definition of sustainability factors and Sustainability Risk Management sustainability risks: Policy Statement and Principal Adverse Impact Statement. Allianz Global Investors Sustainability and Stewardship Report 2022 45