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Allianz Annual Report 2012

Annual Report 2012    Allianz Group114 to responsible investment by tackling investment dilemmas and controversial topics in a transparent way. With ­Allianz Group assets of more than € 500  bn across a range of asset classes, sectors and countries, we are directly and indirectly connected with other businesses, individuals and economies, and are therefore an integral part of the global economy. We strive to invest sustainably across all asset classes over time. The practical implementation of sustainability in proprietary asset management involves integrating ESG factors into our investment process through research, corpo­ rate and country analysis, strategic asset allocation, port- folio construction, asset manager selection, monitoring and risk management. We firmly believe that considering ESG factors in performance evaluation is not a short-term trend but one that will fundamentally change business per- formance, and consequently, investment performance over time. We have adopted an evolutionary learning path for sustain- able investment, one that builds on our existing systematic practices and, over time, develops consistency across asset classes and regions. Concerns about climate change are changing the way assets are managed and giving rise to new and alternative asset classes, especially in the field of renewable energy and ­carbon investments. The following examples illustrate how we are implementing our commitment to ESG in specific asset categories: Renewables As large institutional investors, insurance companies are important players in the financing of a low-carbon economy. We are already one of the leading investors in renewables with a strong portfolio in wind energy and solar power amounting to € 1.3 bn in 2012. Since renewables are seen as an investment opportunity with an attractive risk-return profile, we are gradually expanding our investments in this sector. Investments in renewable energy projects provide sound long-term returns that fit well with ­Allianz’s long- term investment strategy. Carbon investments Carbon has arisen as an asset class on the back of concern about climate change and CO2 emissions. By being an early investor in this up-and-coming market, ­Allianz has already gained valuable experience and is benefiting from the o­pportunitiesthisoffers.Investmentstodateincludeforest protectioninKenyaandanenergyefficiencyprojectinIndia. Combined, these projects will avoid the release of around 40 million metric tons of CO2 over their lifespan. We plan to expand our portfolio in this field and certificates from such projects will be used for our own carbon neutrality. Real estate Allianz Real Estate (ARE) has launched a comprehensive sustainability program, with a focus on environmental fac- tors, to support our Group commitment to significantly reduceourcarbonemissionsandmeetthemarket’sdemand for sustainable real estate. Specific sustainability standards now apply to ARE’s core investment and property manage- ment processes. These include the application of sustain- ability criteria in decision-making for new investments and metrics to measure the sustainability performance of ARE’s real estate portfolio. Furthermore, ARE actively engages with its tenants to further enhance the sustainability per- formance of its buildings – at the same time helping tenants to reduce their running costs. Investment dilemmas We are aware of the criticism directed at a number of our investment activities, which are perceived as controversial by some of our stakeholders. By their very nature, topics C 016 Renewable energy 1.3 2011 1.0 2010 investments (in € bN) 1.3 2012