Unlocking the “S” in capitalism Closing the gap with climate Our framework for inclusive capitalism While these steps are encouraging, there is still less attention at Allianz Global Investors paid to building a more inclusive world than addressing Thanks to their experience with the climate transition, many climate change and the environment. The UN’s High-level investors increasingly recognise they have the power to Political Forum on Sustainable Development – in effect, make a positive impact through where and how they invest the SDG equivalent of the climate COP – had only its 13th their capital. This applies equally to the transition to a more iteration this year and received scant media coverage. inclusive world. What could explain this gap? We see both a lack of Indeed, as a firm with strong ESG credentials, Allianz Global urgency and a sense that inequalities are happening Investors has been active for several years in integrating in more remote countries. In addition, there are intrinsic people-related sustainability factors in investment challenges in managing social factors. Whereas the fight 13 against climate change has a clear and measurable focus – processes. As part of our ESG risk assessment, we seek to ie, achieving net-zero emissions to stop warming – there identify where investee companies may need to enhance is no single unifying quantitative goal for creating a fair and inclusive world. There is also the question of how to measure sustainable development. It encompasses multiple topics – from education, ways of working and retirement New skills needed to health and financial considerations. Moreover, there are significant cultural and legal differences across countries The shift away from fossil fuels is estimated by the and regions. International Energy Agency to displace around But while the S has been a poor cousin to the E and G of ESG, 5 million jobs. But about 30 million new workers it is still gaining prominence. Social issues are particularly are needed by 2030 to meet increased demand important to millennials and Generation Z investors. And for clean energy and low-emissions technologies; 14 even though inequalities have increasingly come into focus over half are highly skilled positions. in the US, this awareness is now being exported to other parts of the world. 13. We have also published research on the topic of economic inequality, including this paper: Allianz Global Investors | Enabling access to markets can help reduce inequality (allianzgi.com) 14. Net Zero by 2050 - A Roadmap for the Global Energy Sector (windows.net) 5