ESG Integration Framework 03.6 ESG scoring approach Ultimately, the integration of ESG-related information supports the achievement of Allianz’s primary investment objective. 03.6.1 Motivation and background The approach was developed by Global Sustainability and AIM SE in close collaboration with the asset managers AllianzGI and PIMCO. The primary objective of Allianz’s investment approach (for Furthermore, three NGOs (Transparency International, WWF and proprietary investments such as customers’ insurance premiums) is Germanwatch) were involved in the set-up of the ESG Scoring to achieve the highest and stable investment returns for customers in approach and their expertise on ESG topics was an important input the long-term. In this respect, it is becoming increasingly important to for shaping the overall approach. take environmental, social and governance risks and opportunities Based on ESG ratings and scoring data provided by MSCI ESG into consideration early on in the investment process, as these may Research, Allianz has developed its approach to systematically impact financial performance in the mid and long-term. integrate ESG risks and opportunities in its investments, assessing Through the ESG Scoring Approach, Allianz’s investment them along 35 key environmental, social and corporate governance professionals have access to in-depth extra-financial information on issues. These issues include for example carbon emissions, product listed issuers. This allows them to systematically take ESG risks and safety and quality, data protection and corruption (see Table 2 opportunities into consideration, when making investment decisions. Table 2. Pillars, Themes and Issues of the ESG Rating by MSCI ESG Research 3 Pillars 10 Themes 35 ESG key issues Environment Climate Change Carbon Emissions, Financing Environmental Impact, Product Carbon Footprint, Climate Change Vulnerability Natural Resources Water Stress, Raw Material Sourcing, Biodiversity and Land Use Pollution and Waste Toxic Emissions and Waste, Electronic Waste, Packaging Material and Waste Environmental Opportunities Opportunities in Clean Tech, Opportunities in Renewable Energy, Opportunities in Green Building Social Human Capital Labor Management, Human Capital Development, Health and Safety, Supply Chain Labor Standards Product Liability Product Safety and Quality, Privacy and Data Security, Chemical Safety, Responsible Investment, Financial Product Safety, Health and Demographic Risk Stakeholder Opposition Controversial Sourcing, Community Relations Social Opportunities Access to Communications, Access to Health Care, Access to Finance, Opportunities in Nutrition and Health Governance Corporate Governance Board, Ownership and Control, Pay, Accounting Corporate Behavior Business Ethics, Tax Transparency, , 28