Allianz Global Investors is a pioneering leader in Sustainable Investing

Allianz Global Investors is one of the world's first major asset managers to fully embrace Sustainable Investing, offering an array of Sustainable Investing choices, including our Integrated ESG, SRI and Sustainable Development and Impact strategies. For us, this no passing fad but part of our evolutionary journey over the past two decades to put sustainability at the center of our day-to-day work. This encompasses not just promoting sustainable investments but also such things as making our offices greener and our human resources more diverse.

Sustainable Investing is in our DNA…

1999

Our socially responsible Global Sustainability equity strategy is established

2007

AllianzGI becomes a signatory to the United Nations' Principles for Responsible Investing (UN PRI)¹

AllianzGI was among the

First 50

Signing the UNPRI

asset managers to adopt the UN PRI, which now has more than 2,500 signatories

$100B$108B$118B$122B$135B$148B$152B$158B$162B$168B$185B

in assets under management across our Integrated ESG, SRI and Sustainable Development and Impact strategies²

…with dedicated resources…

2001

AllianzGI establishes a dedicated ESG research team

4,600 stocks worldwide covered by our proprietary ESG model, and 9 analysts exclusively dedicated to ESG research in the US, Europe and Asia

20+ AllianzGI strategies across our Integrated ESG, SRI and Sustainable Development and Impact approaches

…and recognized leadership…

AllianzGI received an A+ in 2017, 2018 and 2019 from the PRI Association for its overall approach to ESG Strategy and Governance. The category encompasses AllianzGI’s ESG policies, objectives and memberships of various organizations, and considers how the firm promotes ESG efforts internally and externally.³

Category AllianzGI score 2019 Median score 2019
Strategy & Governance A+ A
Infrastructure Equity A+ A
Listed Equity: Incorporation A+ B
Listed Equity: Active Ownership A B
Fixed Income: Corporate Financial A B
Fixed Income: Securitized A C

Choosing the right sustainability partner

As demand for Sustainable Investing grows, investors are asking, “How should I choose the right partner to help me meet my financial and ESG goals?” At Allianz Global Investors, we believe that investors seeking to add sustainable offerings to their portfolios should seek partners that exhibit five key characteristics:

Asset managers today are rolling out a dizzying number of new funds to meet the growing demand for sustainable strategies. But, before choosing a manager or a particular strategy, investors should ask, “Does this organization actually have a track record in Sustainable Investing, or is the asset manager simply jumping on the bandwagon now that ESG has become a hot topic in the investing world?”

AllianzGI has been a pioneer in Sustainable Investing for two decades. For example, we signed the United Nations’ Principles for Responsible Investing (PRI) in 2007, placing us among the first 50 asset managers to sign a pact that now has more than 3,000 signatories. Many are coming to this trend only recently; more than 1,300 UN PRI signatories joined the accord since the start of 2018.

The investment industry is at a tipping point: Investors realize they can make an impact on the world by choosing where and how to invest their funds. Sustainable Investing will increasingly be an intrinsic part of every asset managers' business. So, when considering which asset manager to retain, investors should ask, "Is sustainability central to the firm’s investment process, or is it a side business?"

AllianzGI has made a commitment to make sustainability central to our work, as evidenced by our actions for the past two decades (see infographic above). We are one of the first global asset managers to appoint a Chief Sustainability Officer, and we have created a global digital collaboration platform that makes sustainability research available to all our investment professionals.

Research shows that the full value of ESG factors can only be realized through active investing. Passive ESG strategies tend to overpay for assets and concentrate portfolios, without necessarily exploiting an additional return potential. However, with active management strategies, investors may be able to use ESG to generate alpha by better managing the significant downside risks associated with environmental, social and governance factors.

AllianzGI’s active ESG investment process is designed to help investors avoid large portfolio drawdowns related to ESG factors—a process that has historically contributed to smoother, better risk-adjusted returns. Allianz Global Investors has been a pioneer in actively managing ESG strategies, with two decades of portfolio-management and proprietary research in the space.

An asset manager that understands and is truly committed to Sustainable Investing will not rely exclusively on external, third-party ESG ratings, but will instead maintain its own, in-house research function. ESG research is especially important now for several reasons:

  • The risk spectrum has changed: Investors today must assess ESG factors to have a fully informed view of investment risk.
  • Traditional accounting does not capture ESG factors, which are often underreported by companies.
  • There is now ample evidence showing that better ESG performance tends to produce better risk-adjusted returns.4 In other words, companies with better ESG profiles tend to have less risk.

Asset managers need to undertake their own proprietary ESG research to unlock this potential value. Why? Because third-party ESG research is inconsistent. While there is a high correlation between corporate credit ratings, there are significant differences between the ESG ratings from various third-party agencies for the same company because ESG rating providers use different methodologies and have varied objectives.

AllianzGI uses third-party research only as a starting point, and then adds our own proprietary research from a dedicated group of analysis to gain a deeper understanding of ESG risk factors.

Sustainable Investing is too important to leave to a cookie-cutter approach. At AllianzGI, we understand that investors seek out Sustainable Investing strategies for many different reasons, and with many different objectives, needs and preferences.

Whether a client wants to exclude certain investments from their portfolio, wants to make a specific impact on the environment or on society or wants to use ESG factors to better manage risk factors, we offer a variety of approaches, reflecting different levels of ESG incorporation that are adaptable to various client preferences.

Integrated ESG

Integrating ESG risk factors into investment analysis and decision-making in a consistent way, without constraining the investment universe.

Sustainable and Responsible Investing

Inclusionary and exclusionary strategies that aim to deliver sustainable returns, measured in both financial and social/environmental terms.

Sustainable Development and Impact

Sustainable Development strategies seek positive societal and/or environmental change in alignment with UN Sustainable Development Goals. Impact strategies aim for intentional and measurable societal and/or environmental change, also aligned with UN SDGs.

  • Delivering competitive financial returns
  • Mitigating Environmental, Social and Governance risks
  • Persuing Environmental, Social and Governance opportunities
  • Intention to create societal or environmental value

In addition, our ESG Informed strategies draw upon the firm's sustainable research—made available to all our investment professionals via digital collaboration tools—informing our investment decisions and helping to advance the evolution of our Sustainable Investing platform.

Active Stewardship

At AllianzGI, we also believe that engaging with companies—what we call Active Stewardship—is an essential component of active Environmental, Social and Governance (ESG) investing.

What is Active Stewardship? It’s a commitment to drive positive change by engaging with the management teams of potential portfolio companies. Such engagement requires active involvement from portfolio managers and analysts, often creating multiple pressure points from within AllianzGI to drive action and change on the part of portfolio companies and to move public policy more broadly.

Active Stewardship helps protect companies from downside risks, unlock alpha potential and drive performance in our portfolios—in terms of both financial returns and social and environmental impact.

Often, Active Stewardship involves having a say on important issues through proxy voting. In corporate governance, environmental risks and impacts, business conduct and culture and many other areas, we actively exercise our proxy voting rights to protect our clients’ interests, hold management accountable and push for progress on environmental, social and governance issues. Read more about how Active Stewardship works.

Voting for our convictions

Our Active Stewardship commitment is reflected in how we vote our proxy at annual shareholder meetings. We take an active role in voting on such important proposals as director nominations and compensation to influence the management of our portfolio investments. Explore an interactive tool that reveals how we vote by type of proposal, economic sector and by regional markets.

Our Allianz commitment

Our corporate parent Allianz SE is also deeply committed to sustainability, rated A+ by the PRI Association and AAA by MSCI ESG Research. For us, sustainability is more than managing ESG factor risks in client portfolios: It informs our corporate responsibility efforts to promote a low-carbon economy and a more inclusive society. For example, we are partnering with SeaCleaners to combat plastic pollution in the world’s oceans and have worked to significantly reduce the carbon emissions from our offices.

1. The UNPRI was established in 2006

2. As of December 31, 2019

3. The annual assessment report from the PRI Association looks at how signatories are progressing with incorporating ESG factors into investment decisions, and aims to provide feedback to signatories to support the ongoing development of their ESG credentials. The report presents a comprehensive overview of the assessed modules AllianzGI reported on and compares the respective AllianzGI performance to the peer group. The annual scores refer to the Jan-Dec reporting period of the preceding year.

4. How do ESG factors impact portfolio performance? Dr. Steffen Hörter, June 2019.

 

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