Sustainability Report 2021 04.3 Strategy 01 Introduction Advocating for strong climate policy • The Investor Call for Ambitious Methane Towards open source climate data, models and analytics A supportive policy environment is crucial to Regulation for the Oil and Gas Industry; 02 Measuring and ensure the viability of a socially-just transition • We Mean Business letter to G20. More and more financial institutions are Allianz is heavily involved in the development managing sustainability to climate resilience and net-zero emissions. We also advocate for: committing to align their portfolios with the of the prototype along with other large Without decisive action by governments, • Embedding ‘net-zero by 2050’ in short- and Paris Agreement. One of the main barriers they corporations like Amazon, Microsoft and 03 Strengthening there will be insufficient frameworks and market face is accessing trusted data and transparent Goldman Sachs. OS-C also develops a our foundation incentives to bring down demand for emission- long-term governmental climate targets, analytical tools to quantify and act decisively prototype Implied Temperature Rating tool intensive products and to allocate capital in climate strategies and emissions reduction on climate-related risk and opportunities. in line with the TCFD’s work on Portfolio 04 Climate-related line with a 1.5°C trajectory. The private sector, plans, following latest climate science which Current regulation and methodologies are not Alignment. It will start with four sectors financial disclosure including insurers, can play an important role in requires at least halving emissions every standardized enough and the market for data (Automotive, Oil & Gas, Steel and Utilities). 04.1 Highlights raising government awareness and making the decade in line with pathways of no or low and tools is highly fragmented. To improve 04.2 Governance business case for getting on track to deliver the overshoot of a 1.5°C temperature rise. this, Allianz is supporting and contributing to 2. Allianz is a member of the Project Task Force 04.3 Strategy Paris Agreement. • Development of sector policies to promote a swift advancing climate disclosures in a number for non-Financial Reporting in the European 04.4 Strategy resilience, stress-tests and Asset owners like Allianz are in a unique position and just transition including the development of of ways: Financial Reporting Advisory Group (EFRAG) climate scenario analysis more granular short-, medium- and long-term which prepares the elaboration of possible 04.5 Risk and opportunity management in the financing value chain, especially those zero carbon infrastructure plans. 1. We are a member of Open Source Climate E.U. non-financial reporting standards 04.6 Targets and metrics setting themselves portfolio targets and therefore (OS-C), an initiative hosted under the in a revised Non-Financial Reporting being dependent on change in policy and the real • Stringent carbon pricing to internalize the Linux Foundation to enable like-minded Directive (NFRD). 05 Our universal principles economy to achieve them. external costs of pollution, including a phase- companies to build a ‘pre-competitive layer’ 3. We are the only insurer within the E.U. In 2021, we continued to advocate for a out of direct and indirect fossil fuel subsidies. of modeling and data that is globally shared Platform on Sustainable Finance which green recovery to build back better after the • Protection of nature and support for regenerative and accessible. OS-C links company data, acts as a permanent expert group of the COVID-19 pandemic. As part of the recovery, forestry and agriculture. climate analytics (scenarios and stress- European Commission to assist developing government spending and recovery packages are • Support for and potentially redirecting of tests) and scientific climate models in one the E.U.’s sustainable finance policies, playing a pivotal role in underpinning economies, subsidies to scale-up new technologies platform, allowing for global collaboration notably the further development of the infrastructures, jobs and livelihoods. Policy and that will provide solutions in hard to abate on this exceptional data challenge which will E.U. taxonomy. fiscal decisions taken now cut across numerous sectors, e.g. carbon capture and storage and accelerate innovation. policy areas and will either pave the way for green hydrogen. necessary structural changes – or delay action. Allianz has been vocal through engagement • Promotion of mandatory assured climate from Board-level to working-level interventions, reporting and transition plans like GHG joint calls to action and dedicated papers such as: emissions, associated reduction targets and alignment with 1.5°C trajectories. • The U.N. convened Net-Zero Asset Owner • Climate disclosure aligned with TCFD and the Alliance Discussion Paper on Governmental E.U. Sustainable Finance agenda, in particular Carbon Pricing; the E.U. sustainability taxonomy. • The WEF Alliance of CEO Climate Leaders’ • Sustainable finance regulation that provides a statement to G7; defined, science-based and reliable framework • German Business Statement for crisis via a common taxonomy of sustainability, management coordinated by Stiftung clarification of asset managers’ and investors’ Klimawirtschaft (formerly Stiftung 2 Grad); duties, inclusion of sustainability in prudential regulation, and enhanced transparency of 72 corporate reporting.