Climate change has top priority in engagement with companies for AllianzGI

As an active asset manager with approximately $247 billion (€206 billion) in assets managed under sustainability criteria, AllianzGI takes its fiduciary responsibility to clients very seriously. The Stewardship Report 2020 provides a summary and detailed analysis of AllianzGI’s engagement with companies and proxy voting.

Matt Christensen, Global Head of Sustainable and Impact Investing, comments, “As a result of the Sustainable Finance Disclosure Regulation SFDR, we are seeing a strong trend towards sustainable investing. For the term ‘sustainable’ to be more than just a buzzword, and to bring it to life, investors need to use their influence. They need to engage companies to bring about the real-world change that is needed and that our clients are also increasingly demanding. Engagement enables us to gain a deep understanding of the companies we invest in and engage in an ongoing dialogue with them. To maximize our impact in this, we take a global approach to engagement and proxy voting.”

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Engagement priorities 2021

Climate change is one of the most pressing challenges facing our planet. As a member of the Net Zero Asset Managers Initiative, AllianzGI is committed to encouraging and supporting companies to integrate climate change considerations into their strategic decision-making process. In 2021, AllianzGI’s activities will focus on climate risk assessment. The focus is to explore how companies measure and manage climate risks and how they are transforming their strategy, operations and product pipelines to be climate friendly. Other topics include the introduction of science-based targets and the disclosure of climate- and water-related key performance indicators (KPIs).

In addition, AllianzGI is implementing the new “Climate Engagement with Outcome” approach in a number of funds. Under this approach, fund managers actively engage with the ten largest absolute CO2 emitters in their portfolios (Scope 1 and 2) on climate issues. Should emitters fail to respond to inquiries or show no improvement efforts on their respective climate pathways, divestment is considered as part of an escalation process.

Beyond ESG topics such as climate and environment, other focal points in AllianzGI’s critical-constructive dialog with companies in 2021 will be on the following topics: Covid-19-related risks and challenges, social risks, and fostering strong institutions through good corporate governance. In terms of Covid-19-related issues, AllianzGI is looking beyond the financial and strategic implications of the crisis. In particular, it is critically reviewing compensation proposals at all those companies that have received substantial government aid, significantly reduced staff or cut dividends as a result of the pandemic, without any guidance from regulators on the latter.

Stewardship Report 2020

In the 2020 Stewardship Report, AllianzGI comprehensively reports on last year’s engagement activities as well as proxy voting. AllianzGI engaged with 224 companies in 29 markets worldwide last year, seeking dialogue with a number of companies on multiple occasions. A total of 303 engagement initiatives covered 491 topics. Around 60 percent of the engagements related to corporate governance, business conduct, and transparency issues. One-fifth of the engagements related to environmental risks and impacts, and around 10 percent to social issues.

Details of AllianzGI’s voting behavior at Annual General Meetings (AGMs) in 2020 were previously disclosed. In total, AllianzGI voted on more than 100,000 management and shareholder proposals at over 10,000 AGMs worldwide. AllianzGI voted against or abstained from voting on at least one agenda item in 72 percent of all meetings, and 23 percent of all proposals were rejected worldwide.

Dr. Antje Stobbe, Head of Stewardship, explains: “Voting at AGMs is indeed the most visible and undoubtedly an important part of our approach. But it is by no means the only way we communicate our assessments to the companies in which we invest. Rather, we seek constructive, ongoing dialogue to express our expectations, raise concerns and – where necessary – initiate improvements.”

Sustainability Report and TCFD Report

In addition to the Stewardship Report, AllianzGI today also presented its Sustainability Report and TCFD Report. In doing so, the Sustainability Report 2020 presents the sustainable investment offering as well as the company’s ambitions as a sustainable investor and sustainably operating company. And the TCFD Report 2020, published for the first time, reports on AllianzGI’s progress in implementing the TCFD recommendations based on the framework for consistent corporate climate reporting presented by the Task Force on Climate-Related Financial Disclosure (TCFD). It also provides transparency to clients on in-house climate change considerations. In 2019, AllianzGI became an official supporter of the TCFD recommendations and began implementing them. This has laid a strong foundation for the company’s climate change strategy in recent years.

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(Featured image by pixel2013 via Pixabay)

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