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Our ESG approach

For insurance and investments alike, we always consider certain ESG (environmental, social, governance) factors. Here’s how we do business regarding those risks.

Whether providing insurance or investing our customers’ insurance premiums, we consider the environmental, social and governance (ESG) risks associated with such transactions. We aim to lead our industry in integrating ESG factors into our insurance and investment businesses. All of our ESG integration activities are implemented through Group-wide corporate rules on risk management, underwriting and investment.

What is ESG?

ESG factors are extra-financial factors that can influence, and be influenced by, our business activities. If not addressed appropriately they can escalate into substantial risks.  

Examples of ESG risks include human rights violations, illegal logging activities, or severe corruption allegations. We diligently manage ESG risks to ensure they don’t develop further.

Alternatively, ESG factors can also present opportunities to induce positive change, such as increased requirements for renewable energy investments or offering solutions for emerging markets.

Our integration approaches and processes

We have multiple instruments to integrate ESG concerns into our underwriting, investment and asset management activities, which are listed below. For further details see the Allianz ESG Integration Framework and the Group Sustainability Report.

  • ESG Referral Process and Sensitive Business Guidelines: Insurance transactions and unlisted investments in 13 sensitive business areas are screened and assessed for ESG risks. During 2018, we reviewed 470 transactions for potential ESG risks part of this process.
  • ESG Scoring Approach: Listed assets’ ESG performance is systematically evaluated and companies with scores below a threshold require the asset manager’s explanation or divestment.
  • Engagement and Dialogue: We engage with the bottom 10% of listed assets in our portfolio to understand their business and help them improve their ESG performance.
  • ESG Exclusion Policies: We strictly prohibit investing in certain sectors like banned weapons, coal-based business models, or sovereign bonds offered by countries with documented severe human right violations.
  • Asset Manager Mandating, Selection and Review: Over 99% of our assets under management are managed by asset managers that are PRI signatories and/or have ESG policies in place.

ESG Integration Framework

We disclose our ESG integration approach and processes in the ESG integration framework. The document provides transparency of the ESG guidelines and rules used by our underwriters and investment managers to identify avoid and mitigate sustainability risks and capture opportunities from ESG trends.

The third version of the framework was published in October 2018.

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ESG processes across Allianz business lines

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ESG Processes
Insurance
Investment (Listed)
Investment (Non-Listed)
ESG Referral Process ●   ●
ESG Sensitive Business Guidelines ●   ●
Sensitive Countries List ●   ●
ESG Scoring Approach   ●  
Engagement and Dialogue1
 ● ● ●
ESG Exclusion Policies ● ● ●
Asset Manager Mandating, Selection and Review   ● ●
1 Included investment engagement as an assets owner as well as insurance-based risk dialogues.

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