Unlocking the “S” in capitalism

Achieving Sustainability Unlocking the “S” in capitalism allianzgi.com February 2022 Social issues have typically been overshadowed by other aspects of the sustainability story such as climate. That’s changing. The Covid-19 pandemic has shone a light on inequalities in access to basic essentials and life opportunities – and the solution calls for a new brand of capitalism. The “S” in ESG – the environmental, social and governance factors that are a core Key takeaways part of sustainable investing – has long – The Covid-19 pandemic shone a light been overshadowed by other aspects of the on the weaknesses of the modern sustainability story. Yet today, social issues just-in-time economy and was a stark are increasingly coming into focus. reminder that many communities One reason is the Covid-19 pandemic, which has experience inequalities in accessing Nicole Papassavvas exposed serious problems that can arise when both life and livelihood essentials Senior Sustainability countries or communities lack the resources and – Recent events have led to a renewed Analyst opportunities that others take for granted. In focus on the “S” in ESG – the social the worst situations, these communities may be issues that can hold back the growth marginalised from society entirely, experiencing and resilience of economies, and may what is known as “social exclusion”. There’s also be exacerbated by climate change growing recognition that social issues are firmly and digitalisation interconnected with the “E” in ESG – namely the – The concept of “inclusive capitalism” environment and climate change – and that all is gaining steam as part of a more these themes should be addressed together. inclusive approach to economic growth, At Allianz Global Investors, we understand the and it should be addressed alongside importance of social issues to today’s world. our other sustainability pillars at Marie Rupp In fact, it’s a core reason why the concept of AllianzGI – climate change and Senior Sustainability “inclusive capitalism” is one of the three thematic planetary boundaries – with which it is Analyst closely interdependent pillars of our sustainability focus – alongside – By addressing inclusive capitalism climate change and planetary boundaries such via their investments, investors can as biodiversity. Inclusive capitalism is integral accelerate the journey to a more to our goal of working with our clients to drive equal world while capitalising on an inclusive, fairer and more sustainable world. significant growth opportunities as We think it opens up new markets and growth new approaches and infrastructure opportunities as companies innovate to resolve come online inequalities and address the needs of under- served communities. Value. Shared.