For fund distributors and professional investors only.
We are improving transparency around climate-related disclosures and are working to further align our strategy and approach with the recommendations developed by the G20 Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD).
We have analysed methods for integrating climate change risk into strategic asset allocation and we support bottom-up climate risk integration into portfolio strategies.
Allianz Global Investors is in the process of developing dynamic climate investment strategies. These strategies will be driven by climate risks and opportunities. In addition to delivering financial performance, one of the key goals is to achieve climate neutrality in the respective portfolios.
For mainstream investment strategies, Allianz Global Investors portfolio managers have access to ESG and climate risk research, including intrinsic issuer ESG ratings. For many sectors, climate change already poses a material consideration for fundamental analysts and, as such, is reflected in the sector frameworks (capturing material ESG risks) and stock ratings used to inform investment decisions.
To date, we have mainly used a qualitative approach to assess future climate-related risks and opportunities. This approach uses scenarios to provoke discussion about the overall investment strategy and the prospects for a particular sector or region, rather than as a source of data to feed into models.
As part of our commitment, we will review and refine our approach and increasingly build scenario analysis into our processes.
In the immediate follow-up to the Paris Agreement 2015, we worked with Allianz Climate Solutions to develop an asset class climate risk scoring approach which accounts for technology, regulatory and physical climate change risks. The approach involves a qualitative “what if” asset allocation discussion accounting for asset class-specific climate risk sensitivity.
While not fitting into some of the definitions of scenario analysis, a qualitative approach is consistent with the recommendations of the TCFD and can be an important way to build internal knowledge and understanding ahead of developing a more quantitative approach.
The portfolio carbon footprint report is designed to show the implied CO2 emissions intensity of all companies in the portfolio versus the benchmark. It is based on underlying data comprised of estimated annual direct (Scope 1) and indirect (Scope 2) CO2 emissions of corporates.
Total carbon intensity is the weighted sum of the carbon intensities of the underlying corporates, adjusted by their respective weight in the portfolio or the benchmark.
Read the full Climate Risk Statement
AllianzGI sponsor of Art on Climate