ESG Integration Framework gas (GHG) emissions. This is necessary to limit global warming Our criteria are being further tightened over time and explained in to 1.5°C compared to pre-industrial times, as postulated by the more detail below. For the definition and application of our criteria, Intergovernmental Panel on Climate Change (IPCC) and as adopted we are relying on best available company data in a challenging data in the Paris Climate Agreement. environment. We are open to any remarks regarding shortcomings The necessary GHG emissions reduction entails that fossil-fuel based as well as possible additions. energy generation will have to be drastically reduced in the coming 03.9.2.3 Scope of exclusions decades. With coal being the fuel with the highest CO2 emissions If companies do not present a credible strategy to transition away in relation to its energy content, contributing a significant share from coal at a pace which is compatible with the scientific pathways of global emissions, and low-carbon technological alternatives of limiting global warming to 1.5°C, we are excluding them from our being readily available, (i) a stringent phase-out of installed coal- business along the following set of criteria. based energy production and (ii) far-reaching avoidance of new coal additions is required to enable transitioning global energy 03.9.2.4 Criteria for our proprietary investments generation to lower emission levels. Companies which, either themselves (directly) or through entities To drive the transition to a low-carbon economy, Allianz has set itself they control (indirectly, minimum of 50% stake), breach the following ambitious climate and environmental targets and collaborates with thresholds: international organizations, companies and civil society. Allianz Energy generation from coal: is a founding member of the UN-convened Net-Zero Asset Owner Alliance1, participates in the Energy Transitions Commission2 as well • deriving 30% (25% as of December 31, 2022) or more of their 3 as The Investor Agenda and is committed to the Science Based generated electricity from thermal coal, and/or 4 Targets initiative . • planning more than 0.3 gigawatts (GW) of thermal coal 5 03.9.2.2 Objectives capacity additions We are engaging the companies in our proprietary investments as Coal mining: well as our Property & Casualty (P&C) insurance portfolios to move • deriving 30% (25% as of December 31, 2022) or more of their away from coal-based business models and to present effective revenues from mining thermal coal strategies to reduce the share of coal in mining and combustion at a Furthermore, we continue to not directly invest in any coal-based minimum in line with the criteria laid out below. infrastructure, such as coal power plants, coal mines, coal-related Since 2015, Allianz has not financed coal-based business models. railways or coal ports. Equity stakes have been divested, fixed income investments made before 2015 are in run-off, and no new investments have been allowed since 2015. Furthermore, Allianz does not offer insurance for coal power plants or mines and requires all companies from both P&C insurance as well as proprietary investment portfolio to fully phase out coal by 2040 at the latest. 5 This criterion is based on available company data. It assesses whether a company 1 www.unepfi.org/net-zero-alliance is planning and/or building additions of more than 0.3 GW in coal power capacity. 2 www.energy-transitions.org This allowance is established mainly for data and technical reasons, e.g. to allow 3 www.theinvestoragenda.org retrofitting or refurbishment of existing plants in order to improve their efficiency, 33 4 www.sciencebasedtargets.org but to avoid building of new plants.