The purpose of this report is to provide an update on: areas of ESG research we are focused on; our engagement with investee companies and how we are fulfilling our stewardship role; how we are integrating ESG across our investment strategies; and the ways we are innovating to meet clients’ evolving extra-financial demands.
There are nearly 2,000 signatories to
the UN Principles for Responsible
Investment (UN PRI),1 representing
almost USD 90 trillion in assets under
management. Such collective muscle
would suggest that consideration of
environmental, social and governance
(ESG) factors has become a primary
concern for asset managers and asset
owners in their investment decisions.
Yet, the global growth of interest in
ESG since AllianzGI signed up to the
UN PRI in 2007 has coincided with an
increase in investor expectations and
product categories, which seek to
address different philosophical
positions and client requirements.
Consequently, we believe it is
important to be clear about what we
offer and what we mean when
labelling our offering.
As an active investor, research is core
to our ability to generate returns. We
have been able to demonstrate that
ESG research can provide an
important signal for future
performance. Thus, we have an active
programme of engagement and
stewardship and our proprietary ESG
research is available to all investors
across AllianzGI. As a baseline, we can
say that all our investments are ESG
While many firms talk about
integrating ESG, we have taken a very
rigorous approach in our “Integrated
ESG” labelling. Each portfolio team is
responsible for questioning potential
holdings with low ESG ratings and
contributing to the firm’s “digital
debate” about companies’ ESG risks.
This internal crowdsourcing ensures
that experienced portfolio managers
and industry analysts are contributing
views on ESG risk, which we believe is
Active is: Unlocking the
potential of ESG
superior to relying entirely on external
ESG ratings and buying in to third
party methodologies and judgements.
When a portfolio team still sees a
compelling opportunity to invest in a
company, despite the acknowledged
ESG risk, they must document their
risk/return thinking in our collaboration
system. Because our portfolio
managers understand ESG risk and
also have the ability to own risky ESG
companies, we’re in a unique position
to engage with the companies that
need it most, as we seek to see that risk
reduced through change. In this way,
we are committed to, and in the
process of, embedding ESG as a
tangible factor across all of our
strategies regardless of asset class.
Already, Integrated ESG applies to
EUR 116 billion of the assets we
One of the strengths of Integrated
ESG is that it builds an additional
factor into existing investment
processes: enhancing rather than
changing the process. Yet we
recognise that for a number of clients,
ESG is more than a risk-based
Through our experience in Socially
Responsible Investing (SRI), we are well
equipped to provide investment
solutions that address clients’ extra
financial needs – whether that is
through the application of negative
screening, or increasingly through
positive screening and creating an
impact. In addition to EUR 22 billion in
SRI strategies, AllianzGI is managing
around EUR 6 billion of impact
investments. We are committed to
meeting growing client demand in this
area through insights and innovation.
The purpose of this report is to
provide an update on: areas of ESG
research we are focused on; our
engagement with investee companies
and how we are fulfilling our
stewardship role; how we are
integrating ESG across our investment
strategies; and the ways we are
innovating to meet clients’ evolving
Whether it is through integrating ESG
into investment strategies, offering
best-in-class SRI strategies or
developing strategies that aim to fulfil
an explicit extra-financial purpose to
generate an intentional impact, we
have built a culture of collaboration
and active interaction among our
investors around the globe. In so doing,
and through an ongoing focus on this
subject, we hope to unlock the
potential of ESG and serve a spectrum
of client demands.
We hope you will join us on this
1) Source: UN PRI Annual Report 2018, The PRI in numbers
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the principal invested. Past performance is not indicative of future performance. This is a marketing communication. It is for informational purposes only.
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However investors view the problem of climate change – perhaps as a threat to carbon-intensive industries or as an opportunity to contribute to the greater good – ignoring its effects on portfolios increasingly seems like a short-sighted option. Fortunately, there are many ways investors can incorporate this urgent issue into their strategies.
Global warming is forcing the world to move towards a low-carbon economic model, and that will incur costs that investors must factor into their decisions
There are many ways to incorporate climate change into portfolios – including screening out “stranded assets” like fossil fuels, selecting best-performing companies or aiding the “just transition” to a low-carbon economy more holistically
At Allianz Global Investors, we aim to accelerate the speed of positive change – particularly within strategies that deliver social or environmental impacts – while enhancing the value of our clients’ assets