Active asset manager Allianz Global Investors (AllianzGI) launched a significant acceleration of its sustainable investing strategy, with the announcement that 74 of its equity, fixed income and multi-asset funds, representing €70 billion of AUM, will join its current sustainable investment offering.

The company also announced the establishment of the Climate Engagement with Outcome approach, a new stewardship strategy guiding engagement with companies on the climate transition pathway towards a low carbon economy. According to AllianzGI, its fund managers will actively engage with the top 10 absolute carbon emitters (scope 1 and 2) within their portfolios, promoting initiatives including setting greenhouse gas emissions reduction targets or board level remuneration targets linked to climate change.

Matt Christensen, Global Head of Sustainable and Impact Investing at Allianz Global Investors, said:

“Climate change is one of our planet’s most pressing challenges, and AllianzGI believes that asset managers should take a more active role in shaping the future. The Climate Engagement with Outcome approach represents further development in our proactive stewardship approach. Given our experience from engagement with companies so far, we are confident that companies are open to this dialogue and will share these views.”

Investment funds joining the sustainable investment offering will follow either the new engagement approach, or the firm’s SRI Best-in-class considerations approach, in which portfolio construction is geared towards companies with superior ESG credentials compared with their peers. Portfolio construction for the sustainable funds also utilizes AllianzGI’s Sustainable Minimum Exclusion list, screening companies with links to controversial weapons, as well as those that demonstrate severe controversies with respect to the United Nations Global Compact, and companies that earn a significant share of revenues from coal and tobacco or weapons.

Christensen added:

“The COVID-19 crisis has renewed the focus both on climate change and social factors. Many policymakers and investors are viewing the crisis as a wake-up call that accelerates the need for sustainable investing. The increased demand for sustainable funds is a trend we have seen across the globe and we want to offer our clients sustainable products that are based on their preferred outcomes.”