Sustainability Report 2021 04.4 Strategy resilience, stress-tests and climate scenario analysis 01 Introduction Overview of business-related climate risk analyses disclosed in this report Subject matter experts from across Allianz Technology and the Allianz Group assess 02 Measuring and Objective Name Scope Aspects covered Chapter each identified threat for relevance to Allianz, managing sustainability 1. Economic impacts (top-down) Qualitative risk Investments Transition 04.4.1 establish ratings for impact and probability of exposure screening occurrence, and define high-level mitigation 03 Strengthening 2. Economic impacts (top-down) Qualitative Insurance Transition 04.4.2 strategies. Climate-related issues considered in our foundation risk assessment the most recent assessment included adverse 3. Economic impacts (top-down) Quantitative climate Investments Transition, 04.4.3 impacts from increasing frequency and severity 04 Climate-related stress-test physical of extreme weather events on Allianz premises, financial disclosure 4. Economic impacts (bottom-up) Quantitative carbon Investments Transition 04.4.4 consequences of heatwaves on operations and 04.1 Highlights stress-test energy efficiency of data centers under rising 04.2 Governance 5. Economic impacts (bottom-up) Quantitative Insurance Physical 04.4.5 temperatures, and potential challenges with 04.3 Strategy risk assessment regard to the implementation of future energy 04.4 Strategy resilience, stress-tests and efficiency regulation. climate scenario analysis The threat of business disruptions and damaged 04.5 Risk and opportunity management Further examples of the application of scenario • For our business operations, threats as a or destroyed assets due to extreme weather 04.6 Targets and metrics analysis include: result of climate change and other extreme events already exists under current climate 05 Our universal principles • Prospective and existing infrastructure assets weather related events are assessed on conditions. Further increase of this threat due to undergo a thorough due diligence along a forward-looking basis via an emerging climate change is addressed through review and evaluation criteria, considering an asset’s GHG threat assessment that is conducted between update of risk mitigation measures and business emissions and potential impact on capital Allianz Technology and the Allianz Group. continuity and disaster recovery plans. Other expenditures and performance. Assets are This assessment aims to identify top emerging defined mitigation strategies targeted to mid- or required to have a clear and time-lined threats, including interdependencies, and the long-term issues range from developing solutions strategy showing how they will adapt to a definition of potential mitigation strategies, for managing data center load and cooling at decarbonizing world. following a multi-step process involving temperature peaks to designing implementation external market research, expert reviews concepts for regulatory requirements. • Allianz Real Estate regularly conducts an and surveys. energy and carbon performance overview of its direct real estate portfolio, including indicative decarbonization targets. Furthermore, Allianz Real Estate piloted the application of in-house climate scenario analysis for investment portfolios. This work builds on internal underwriting tools to assess location- based physical climate risks and paves the way to use them on the asset side as well. 74