Sustainability Report 2021 04.2 Governance 01 Introduction Given the materiality of climate Group functions investment portfolio in a holistic way. Within AIM, change to our business, we Addressing sustainability matters requires cross- climate and sustainability are steered at the 02 Measuring and functional collaboration and support across our IMB level with a Managing Director in charge of managing sustainability govern it at the highest level global operations. The Global Sustainability the implementation. and cascade responsibility function includes a team dedicated to Climate For our P&C insurance business, the ESG 03 Strengthening Integration and is responsible for coordinating Business Services team located at Allianz Global our foundation through to management. integration of sustainability and climate Commercial & Specialty (AGCS) is responsible aspects into core investment, insurance and for developing, coordinating and supervising 04 Climate-related 04.2.1 Overarching and business operation activities. It also acts as the sustainability and climate-related governance. financial disclosure secretariat of the Sustainability Board and meets For more details, see section 02.2 as well as 04.1 Highlights board-level governance regularly with its Chair. Further functions such the Allianz ESG Integration Framework. 04.2 Governance Allianz’s climate ambition, strategy and targets as Group Risk, Global P&C, Global Commercial, 04.3 Strategy are decided at the Supervisory Board and Allianz Investment Management and Group 04.4 Strategy resilience, stress-tests and Board of Management level and cascaded to Accounting and Reporting report on climate- 04.2.3 Climate competence climate scenario analysis related matters and support operating entities In addition to the governance mechanisms 04.5 Risk and opportunity management relevant functions. We describe this governance in integrating the Group’s strategic approach 04.6 Targets and metrics approach and how remuneration is linked to described above, we apply a variety of climate performance in section 01.3 and 05.5 of and policies. Additional bodies and functions, instruments to foster sustainability and climate 05 Our universal principles this report. such as Allianz Research, monitor and analyze competency at Board, senior executive and market, technological and regulatory trends and employee levels. These include: 04.2.2 Business and developments and share insights. • Extensive reports and briefings for top management-level governance Investment and insurance functions management, translating climate science Our key insurance operating entities, two major into business implications. In 2021, we thoroughly reviewed our approach • Sustainability roundtables of to identify and manage climate change risks investment businesses (Allianz Global Investors and opportunities. This review concluded that a and PIMCO) and investment management investment functions. program to develop and implement continuously function (Allianz Investment Management) have • Trainings for employees, investment-related improved tools, processes and disclosures – well-established climate and sustainability teams. functions, underwriters and sales agents. including appropriate governance structures At Allianz Investment Management (AIM), • Knowledge sharing with and upskilling of – should be implemented from 2022 onwards. the Investment Management Board (IMB) oversees local sustainability colleagues. The process is steered by a cross-functional group implementation of climate and sustainability • Conferences on sustainability topics which of senior executives at Group and OE levels. They strategy for our proprietary investment portfolio include Board member presentations; in include the Chief Risk Officer, Chief Sustainability of € 849.2 billion. This includes regular updates, 2021 we held the conference ‘Understanding Officer, Heads of Group Accounting and discussions and decisions on implementation, Climate Risks’ and two internal Sustainability Reporting, Global Property-Casualty (P&C), target-setting and compliance related to portfolio Forums open to all employees. Global Commercial, Centre of Competence Life decarbonization targets and measures. Analyses of and Health and one of the Managing Directors potential growth opportunities as well as asset of Allianz Investment Management. Progress is stranding in climate scenarios and engagement reported to the Group Sustainability Board. on climate aspects are also regularly addressed. The governance described refers to the status in In 2021, The IMB held a dedicated session on the reporting year 2021. physical and transition risk covering the proprietary 68