01 Our sustainability approach 02 Sustainable investing 03 Active stewardship 04 Corporate sustainability 05 Appendix 03.1 Developing our engagement strategy Principles 7 9 more specifically in fixed income and sustainability or governance. Our activities facilitating dedicated dialogues for our typically relate to an investee company’s corporate credit strategies. Our strategy strategy, operational or financial includes enhancing the engagement- performance, capital management, specific skills of our investment corporate governance and ESG risks professionals through dedicated training. and impacts. See section 03.2.1. This approach allows us to strike a good We seek to reinforce our engagement balance between ESG risk reduction in approach externally through public our portfolios and leading clients and speaking and policy engagement, for companies on an inclusive sustainable example relating to the legal framework pathway to change. It also allows us to for collaborative engagement and set clear engagement objectives from the publishing our convictions via thought outset. While our preference is to engage leadership pieces. investee companies confidentially, we are See sections 03.4 and 03.5. prepared to escalate to engage publicly Our risk-based approach remains the if we conclude that the confidential basis of our engagement strategy and approach has gone as far as it can without focuses on the material ESG risks that delivering progress and our objective we identify. Targeting is closely related would be best served by escalation. to the size of our exposure, whether per See section 03.6. market or fund or considering the total value of investment. The focus of engagements is determined by considerations such as significant votes against company management at past general meetings and sustainability issues that we identify as below market practice. Engagements can also be triggered by controversies connected to Allianz Global Investors Sustainability and Stewardship Report 2022 63