ESG Integration Framework sustainable business success and clear climate strategies through Allianz Capital Partners (ACP) and/or Global Sustainability. The corporate dialogue and proxy voting. AllianzGI routinely engages outcome of the ESG assessment will lead to in dialogue with investee companies and seeks proactively to • a transaction proceeding in the regular investment processes present a viewpoint and effects change where necessary. AllianzGI’s of ACP, or investment views are influenced by the outcomes of engagements • additional information being needed or certain conditions and are linked to the proxy voting process, forming a consistent being attached prior to proceeding, or stewardship approach. • a transaction being declined on ESG grounds. Given the diversity of investors’ objectives and requirements AllianzGI In addition to the ESG risk screening, ACP also performs checks provides sustainable investing processes with a broad range of that none of the parties involved in a given transaction are listed in approaches, adaptable to different levels of ESG incorporation and Allianz Exclusion Policies (see section 03.7). client preferences. In particular, AllianzGI is committed to delivering high performing climate investment solutions, which aim at climate change risk, climate innovation opportunities and driving real 05.6 PIMCO environmental impact. For additional details about the AllianzGI ESG approach, please go PIMCO defines ESG Integration as the consistent consideration to www.allianzgi.com/en/our-firm/our-esg-approach. of material ESG factors into the investment process to enhance clients’ risk-adjusted returns. Material ESG factors are important considerations when evaluating long-term investment opportunities 05.5 Allianz Capital Partners and risks for all asset classes in both public and private markets. Allianz Capital Partners (ACP) as the alternative asset manager Integrating ESG factors into the evaluation process does not mean for the Allianz Group turns premiums from insurance customers that ESG information is the sole or primary consideration for an into investment returns. Investments in infrastructure, renewables investment decision; instead, PIMCO’s portfolio managers and assets as well as in private equity funds enhance the overall analyst teams evaluate and weigh a variety of financial and non- Allianz investment portfolio in several dimensions. In addition to financial factors, which can include ESG considerations, to make integrating ESG principles in the investment selection process, ACP investment decisions. The relevance of ESG considerations to also incorporates these into its ownership policies and practices and investment decisions varies across asset classes and strategies and aims for appropriate disclosure on ESG issues by the entities in which client instructions. ACP invests. By increasing and diversifying the information assessed by the ACP ESG/Reputational Risk Procedure portfolio management team where relevant PIMCO believes that this enables to generate a more holistic view of an investment, which ESG issues are integrated in infrastructure, renewable energy and could lead to opportunities to enhance returns for their clients. private equity investments through the ACP ESG/Reputational Risk Portfolios dedicated to ESG principles don’t need to be one-size-fits- Procedure , which is based on the ESG Sensitive Business Guidelines all. of the Allianz Standard for Reputational Risk Management (AS Certain clients desire portfolios that seek to deliver strong risk- RRIM) and the Allianz ESG Functional Rule for Investments (see adjusted returns and sustainability objectives, like reduced carbon more details on these Group processes in section 03). footprint, active engagement with issuers, meaningful green Each investment is screened for potential ESG risks during due bond allocations and a tilt toward high quality ESG issuers. For diligence. Should any concerns arise during this screening process, those clients, PIMCO launched a suite of dedicated ESG offerings 46 the transaction will be referred to the relevant ESG experts within that seeks to deliver attractive investment returns while also