C _ Group Management Report Climate Change Strategy We are engaging with oil and gas companies to encourage them The Allianz Group Climate Change Strategy encourages solutions for to set net-zero emissions by 2050 targets for Scope 1 and 2 emissions. tomorrow’s climate. Besides caring for our customers through our By 2025, we aim for at least 50 percent of our assets under insurance products, we leverage our position as one of the world’s management in the oil and gas sector to have set these targets. largest insurers and institutional investors to help drive the transition to a low-carbon economy. We do this with our own activities, and we Anticipating climate risks contribute to various public/private partnerships. Our Climate Change Strategy aims to anticipate the risks of a changing Climate protection is an integral part of our core business. By climate. We systematically consider climate and sustainability criteria committing to net-zero GHG emissions by 2050, we have set long-term in our insurance and investment business. In 2021, we reviewed our climate targets in line with the 1.5°C ambition of the Paris Climate approach to identifying and managing climate change risks and Agreement for our proprietary investments, our insurance, and opportunities. Using internal models and external tools, we perform operations. The Allianz SE Board of Management’s remuneration is sensitivity and scenario analyses with time horizons extending to 2050, tied to the attainment of climate-related targets, among other things, and with global warming scenarios ranging from 1.5°C to 4°C. which include the successful execution of our Climate Change For more details on climate scenario analyses, see section 04.4 Strategy. . www.allianz.com/sustainability Climate targets for proprietary investments In pursuing our investment business, we consider climate-related criteria As a member of the AOA, we are committed to reducing the GHG such as carbon emissions, energy efficiency, vulnerability to climate emissions of our proprietary investments to net-zero by 2050. As an change, and opportunities in clean tech as part of our ESG integration intermediary target, we aim to reduce our emissions in our listed approach for listed and non-listed assets. We also systematically equities and tradeable corporate bonds by 25 percent by year-end engage with investee companies exposed to high ESG risks, offering 2024 compared to 2019. For this purpose, we systematically measure advice and encouraging them to define and pursue their own climate the carbon footprint of our listed equity (2021: 2.261 mn t CO₂e; 2020: strategies in line with the latest scientific findings. unaudited 2.192 mn t CO₂e) and tradeable corporate bonds (2021: For further insights into the Allianz Group´s ESG engagement 16.431 approach, please refer to our Group Sustainability Report 2021, mn t CO₂e; 2020: unaudited 19.95² mn t CO₂e) portfolio, and disclose the absolute and relative (2021: unaudited -24.91%; 2020: section 02.2.1 www.allianz.com/sustainability. unaudited -15.4%)3 portfolio carbon footprint values. Furthermore, our real estate portfolio's emissions will be aligned with science-based As part of our decarbonization strategy, we commit to fully 1.5°C pathways by 2025. We have also set emissions reduction and withdrawing from coal-based business models across our proprietary engagement targets in line with 1.5-degree pathways for our investment and Property-Casualty portfolios by 2040 at the infrastructure portfolio. latest. For further details on our targets and our carbon footprint, please For further information on our coal policy, please refer refer to our Group Sustainability Report 2021, section 05.7. to our “Statement on Coal-Based Business Models” To complement our portfolio climate targets for investments, we https://www.allianz.com/content/dam/onemarketing/azcom/Allia have set targets for two of the highest-emitting industries as well, nz_com/responsibility/documents/Allianz-Statement-coal-based- namely utilities, and oil and gas. business-models.pdf For more information on our current state of progress, please see Utilities section 02.2.1 of our Group Sustainability Report 2021 Complementing our coal phase-out commitment by gradually www.allianz.com/sustainability. increasing our investments in renewables and following at least the necessary annual growth rate of 5.85% as proposed by the Caring for the climate-vulnerable International Renewable Energy Agency (IRENA) as a minimum. We support our customers to reduce climate-related risks and minimize damage, compensating those who have suffered losses and Oil and gas insuring low-carbon developments. We prioritize collaboration with Supporting the commitment set out by the industry-led Oil & Gas our peers, governments and civil society to manage climate risks and Climate Initiative (OGCI) to limit the emission intensity for Scope 1 to “close the protection gap” in the most vulnerable parts of society. and 2 emissions of oil and gas companies in their exploration and We are piloting new approaches that combine insurance production business (“upstream”) to less than 20kg CO₂e per barrel of offerings with resilience-strengthening measures. For instance, oil, and aligning our oil and gas exposure on average-listed equity and approaches to incentivizing risk reduction include dedicated training corporate bonds portfolio to this intensity level. and advice as well as risk-differentiated premium structures. Key initiatives include the InsuResilience Global Partnership, Insurance Development Forum (IDF), the Munich Climate Insurance Initiative (MCII) and the Geneva Association Global Partnership. Since 2018, we 1_2021 carbon footprint figures impacted by COVID-19 and strong equity market performance; normalization expected in 2022. 2_Figures have been restated due to a change in methodology. 3_Figures have been restated due to a change in methodology, resulting in a lower baseline. 60 Annual Report 2021 − Allianz Group