European SRI Transparency Code
Statement of Commitment
Sustainable and Responsible Investing (SRI) is an essential part of the strategic positioning and
behaviour of Allianz Global Investors France S.A. (“AllianzGI France”). We have been involved in
SRI since 2002 and welcome the European SRI Transparency Code.
This is our second statement of commitment and covers the period 19/1/2012 to 18/1/2013. Our full
response to the European SRI Transparency Code can be accessed below and is available in the
annual report of the retail funds and on our web site.
Compliance with the Transparency Code
AllianzGI France is committed to transparency and we believe that we are as transparent as possible
given the regulatory and competitive environments that exist in the countries in which we operate.
AllianzGI France meets the full recommendations of the European SRI Transparency Code.
Code Categories
1
Section 1. Basic Details
Signatories should be clear about who they are and provide precise background
information on the fund management company and the fund(s)
The fund management company
Provide the name of the fund management company managing the fund(s) to which
this code apply.
1a
Allianz Global Investors France S.A.
20, rue Le Peletier
75444 Paris Cedex 09
France
Website: www.allianzgi.fr
Contact: David Diamond, Head of Sustainable & Responsible Investment
Describe, in a general way, the SRI philosophy of the fund management company
and the way it is implemented concretely.
1b
a / Philosophy
AllianzGI France engagement in SRI originates in the long term character of its activity, as
a fund management company within an insurance group. As such, our SRI convictions
stem from our traditional expertise in insurance-based fund management which has led to
the development within AllianzGI France of an active and fundamental investment
management style aiming to capture strong long-term trends, coupled with stock-picking
based wholly on intrinsic qualities.
As one of the sustainable development segments within the investment industry, SRI forms
a coherent part of the Allianz Group’s commitment to sustainable development. Allianz
commitments:
• Combating climate change
- Partnership since 2005 with the WWF (World Wildlife Fund) assessing the consequences
of climatic change and aiming to better integrate climatic risks into the insurance industry.
• Aiming to reduce CO2 emissions by 20% by 2012 (target reached in 2011 : 27%
reduction since 2006)
- A 500m € investment target for life insurance premiums into wind farms by 2010 (target
reached).
- A 1bn € investment target for wind and solar projects before the end of 2012 (target
reached: over €1bn invested since 2005).
• Micro-insurance development:
- Collaboration with non-governmental organisations, NGOs (CARE International), and
technical assistance organisations (PNUD, PlanetFinance).
- Development of micro-insurance products in India, Indonesia, Egypt, Senegal, Ivory
Coast, Cameroon (over 4 million beneficiaries to date).
• Improving employee practices and the company’s societal performance:
- The “Allianz 4 Good” internal programme aims to develop employee conduct regarding
sustainable development and social innovation.
- Diversity: aiming to increase the proportion of women in management.
AllianzGI France has also opted to include sustainable development at the heart of its
corporate project, with backing from employees. The project was launched in April 2003
with the creation of a sustainable development committee. This committee currently
comprises a dozen voluntary employees representing various departments. It role is to
implement and follow up sustainable development actions on all fronts.
Its main achievements include promoting every-day eco-friendly actions, such as putting
into place selective waste collection, and increasing awareness regarding energy saving
and paper use.
In 2009, AllianzGI France decided to assess its carbon footprint.
The corporate project includes the development of a range of SRI products.
AllianzGI France’s SRI approach involves both financial and extra-financial research based
on a best effort and best in class strategy. AllianzGI France’s equity investment process
forms part of its long-term strategy. Position turnover rates are low and stringent risk
control is permanently in place.
AllianzGI France is confident that investment choices which take into account
environmental, social and governance issues provide a fuller appreciation of issuers’
intrinsic medium-term value, whilst facilitating the detection of opportunities and reducing
the inherent risks of investment management based solely on financial criteria.
The characteristics and the scale of its SRI investment activity mean that AllianzGI France
is a major player in the French market. Finally, the SRI funds in our company are central to
our employee savings plan. Our profit-sharing agreement includes respect of
environmental performance (energy, water, recycling ...) as a factor in its calculation.
Today, our SRI approach is based on the Principles for Responsible Investment (PRI)
initiative that we signed in 2007.
Principles for Responsible Investment signatory
Why did AllianzGI France become a signatory in March 2007?
This initiative is in perfect harmony with our view of investment management based on
fundamental analysis over a long-term investment horizon which enhances the detection of
risks and opportunities. As such, this procedure conforms to Allianz group sustainable
development commitments.
Signing the PRI initiative illustrates AllianzGI France willingness to be present along the
entire responsible investment value chain:
• In the upstream segment, the fund management company aims to improve the business
environment and market governance, by joining in with Collective Investors Initiatives,
contributing to corporate sustainable development and social responsibility (principles 3, 4
and 5).
• During the investment phase, AllianzGI France takes ESG criteria into account in its
research and portfolio construction (principle 1).
• In the downstream segment: the fund management company fully assumes its role as an
active investor by voting at Annual General Meetings (AGMs) and promoting dialogue with
companies (principles 2 and 6).
Implementing PRI within AllianzGI France
Principle n° 1: taking ESG issues into account in research processes and investment
decision-taking:
• An SRI department with investment management teams specialised by asset class.
• An independent SRI Advisory committee to help us take all sustainable development
issues into consideration in our investments.
• An SRI product range which is continually expanding.
• ESG scores progressively being taken into account by all investment management
teams, particularly equities.
Principle n° 2: to be an active investor taking ESG issues into consideration in our
shareholder policies and practices:
• Voting right principles taking social and environmental criteria into account.
• AllianzGI France is a founding shareholder and administrator of the shareholder-initiative
open-ended investment fund Phitrust Active Investors (PAI).
• No stock loan facility.
Principle n° 3: request the entities into which we invest to publish information relating to
ESG issues:
• Participation in setting up international Corporate Social Responsibility (CSR) reporting
standards through working groups led by the Global Reporting Initiative (GRI). Participation
in the GRI food industry working group.
• Member of the AFG (Association Française de Gestion Financière)Corporate
Governance and SRI commissions.
Principle n° 4: promote the acceptance and application of principles within industry and
investment:
• Founding member of the Enhanced Analytics Initiative (EAI).
• Allocation of 5% of commissions to brokers publishing the best long-term ESG research.
• Founding member and administrator of the “Sustainable Finance and Responsible
Investment” rostrum in association with the Toulouse Institut d’Économie Industrielle and
the École Polytechnique.
• Member and administrator of the Responsible Investment Forum (Forum pour
l’Investissement Responsable: FIR; website: http://www.frenchsif.org/fir.html ).
Principle n° 5: collectively enhance our effectiveness in the application of principles:
• Active participation in multiparty initiatives: administrator for the Extractive Industry
Transparency Initiative (EITI).
• FIR/PRI European sustainable development finance research prize sponsor.
Principle n° 6: activity and progress reporting regarding the application of principles:
• AFG/FIR transparency code signatory.
• New SRI information letter entitled “Sustainable Values”.
• Annual public voting report.
b / Organisation & Management team
AllianzGI France has a dedicated SRI investment management team: a transversal
department, composed of a dozen employees, is in charge of SRI. This department
includes SRI portfolio managers on the one hand and on the other, teams in charge of
ESG research, AGM voting and shareholder dialogue. The head of SRI and the head of
Corporate Governance both report directly to the Chief Investments Officer (CIO), who
reports to Chief Executive Officer of the fund management company. The head of SRI
participates actively in internal and external SRI promotion. The head of Corporate
Governance is in charge of AllianzGI France sustainable development policy and voting
rights at AGMs.
The team is backed by:
• Internal SRI Committee: internal monthly committee comprising the AllianzGI France
CIO, SRI analysts and investment managers and marketing and sales department
representatives.
• SRI Advisory Committee: this committee is composed of external independent
members, all of whom are renowned for their expertise in sustainable development. Its role
is to support AllianzGI France to reinforce its expertise developed in the area of socially
responsible investment (SRI) and to find answers to any related question. It brings an
external view on the processes of SRI management in order to improve and deepen them.
It also enhance environmental, social or governance issues related to financial analysis of
an issuer or a sector. The SRI Advisory Committee does not make any portfolio
management decision.
c / History
Since the first SRI fund was launched in 2002, AllianzGI France has progressively stepped
up its involvement in social responsibility to become a committed contributor to sustainable
development, a signatory of the Principles for Responsible Investment initiative and the
United Nations World Pact.
An integral part of AllianzGI France’s identity, this commitment finds expression in the
development of a high-performance fundamental SRI investment management activity, the
nature and scale of which make the group a market leader.
Products launched
2002 SRI Equity Funds – launch of Allianz Valeurs Durables
2007 SRI Fixed-income Funds – launch of Allianz Euro Credit SRI
2007 Environmental Funds – launch of Allianz Euréco Equity
2008 SRI Money Market Funds – launch of Allianz Securicash SRI
2009 Social Funds – launch of Allianz Citizen Care SRI
2010 Allianz Euroland Equity SRI - UCITS 4 vehicle, mirror fund of Allianz Valeurs
Durables
Strategic choices
2006 Dedicated research team
2007 PRI signatory (Principles for Responsible Investment)
d / Assets under management
AllianzGI France is one of the SRI leaders in the French market in terms of assets under
management: 11 billion Euros (end of December 2011, including advisory).
At of end of December 2011, assets under management breakdown per asset class was
as follows:
-Equities: €2 bn
-Diversified: €4.3 bn
-Fixed Income: €2.8 bn
-Money Market: €1.9 bn
The SRI fund(s)
Provide the name of the fund(s) to which this code apply, and its (their) main
characteristics.
Allianz Euroland Equity SRI A EUR (ISIN LU0542502157)
Allianz Euroland Equity SRI N EUR (ISIN LU0542502660)
Allianz Euroland Equity SRI, which was launched in October 2010, is the fund managed
by AllianzGI France to which the code applies. The fund is a sub-fund of the Luxembourgregistered umbrella fund Allianz Global Investors Fund. Allianz Global Investors Fund was
established under the laws of the Grand Duchy of Luxembourg as an open-ended
investment company with variable share capital (Société d’Investissement à Capital
Variable – SICAV). The fund’s legal standard is UCITS (Undertakings for Collective
Investment in Transferable Securities) 4 Part 1.
Allianz Euroland Equity SRI is managed as a mirror fund of the French mutual fund
Allianz Valeurs Durables which was launched in 2002 and which applies the same
investment process. With Assets under Management (AuM) of more than 834 million Euros
(at end December 2011), Allianz Valeurs Durables is currently the largest SRI equity
UCITS in Europe.
1c
The objective of the fund is to invest over medium and long term in companies within the
Euro zone taking extra-financial criteria into account (social policy, human rights, market
conduct, governance and environmental policy). These criteria are taken into consideration
in combination with traditional financial criteria, such as earnings growth or company value,
with the aim of building a portfolio offering the best possible combination between societal
and financial qualities.
The open-ended fund adopts a long-term investment management approach based on low
portfolio turnover over a 5-year investment horizon. Investment management convictions
are based on sustainable corporate performance through a relatively concentrated portfolio
comprising some 50-70 positions.
Allianz Valeurs Durables, the fund on which Allianz Euroland Equity SRI is mirrored, is the
largest open-ended SRI equity UCITS in France. The fund was awarded 4 stars in the
Morningstar ratings (December 2011).
Please also refer to the full portfolio holdings of the fund Allianz Euroland Equity SRI
enclosed in the Appendix at the end of this document.
Provide details on how to find further information regarding the funds.
There is a dedicated SRI space on the AllianzGI France website in French language only
http://www.allianzgi.fr/developpement-durable-et-SRI/
1d
Information regarding AllianzGI France’s involvement in SRI is available in this dedicated
space in French language (section names):
• a major SRI player in France
• SRI value chain
• PRI
• Presentation of our SRI fund range
• Our SRI investment management process
• SRI and CSR (Corporate Social Responsibility) authorities
• Corporate governance
Also available on our website:
• A letter “Valeurs” over SRI (English version available) is published three times a year:
http://www.allianzgi.fr/fileadmin/contribution/pdf/ISR/let_trim_isr_DECEMBRE_2011.pdf (in
French). This 4-page quarterly newsletter details our convictions, investment choices and
group SRI news. Newsletter archive can be found under http://www.allianzgi.fr/presse/nospublications The newsletter in English language is available upon request to our
communication department: amcomm@allianzgi.fr.
• A product detail sheet (two-page presentation of the main product characteristics), a
monthly report, a full prospectus and an investment management outline are available for
each fund in our SRI product range (in French language): http://www.allianzgi.fr/isr/notreoffre-isr/
You will find further information on the fund on the following websites:
www.allianzglobalinvestors.de (in German)
Basic information, including fund prices and sales prospectus of the fund.
Provide details of the content, frequency and means of communicating information
to investors.
1e
Fund prices, Performances, Net Asset Value (NAV) can be consulted on the following
website in the products section http://www.allianzglobalinvestors.lu/products/products.html
For further information in German on the fund Allianz Euroland Equity SRI please refer to
www.allianzglobalinvestors.de
2
Section 2. ESG Investment Criteria in SRI fund
Signatories should be clear about the fund(s) purpose and its (their) ESG
investment criteria.
How does the fund define SRI?
AllianzGI France SRI investment management philosophy is based on a long-term
conviction process. Allianz Global Investors SRI portfolio management aims to guarantee:
 Durability: ensuring a long-term financial performance to our clients
 Responsibility: adding environmental and societal value to the society
Extra-financial environmental, social and governance criteria, and the respect of human
rights provide a more exhaustive evaluation of issuers’ long term risk.
2a
For this reason, extra-financial analysis is as important as fundamental analysis within the
investment process.
AllianzGI France combines a “Best in class” / “Best effort” approach for its 5 SRI funds
together with Allianz Euroland Equity SRI which promotes, in any given sector, the
application and improvement of good ESG and human rights practice. AllianzGI France
SRI funds are therefore invested partly in securities considered Best in Class, i.e. with an
ESG rating situated between 3 and 4 on an internal rating scale ranging from 0 to 4, and
partly in securities considered Best Effort, rated between 2 and 3.
What are the ESG investment criteria of the fund?
2b
AllianzGI France does not adopt any sector or thematic exclusion policy in the context of
its open-ended fund management, except for companies related to cluster bombs and
antipersonnel mines, as defined by Oslo and Ottawa’s conventions.
Corporate issuer analysis is undertaken for Allianz Euroland Equity SRI.
Issuer analysis covers 5 SRI criteria:
1. Human rights: the sole exclusion criteria for AllianzGI France. The evaluation of
corporate securities in the light of this criterion is based on the issuer’s respect of human
rights in its business conduct (integration of Universal Declaration of Human Rights
principles, respect of major International Labour Organisation conventions, Global
Compact). For sovereign issuers, the signature of the 8 major International Labour
Organisation conventions and the Universal Declaration of Human Rights is also taken
into consideration in combination with an assessment of citizen political rights and civil
liberties (including freedom of association) and freedom of the press.
2. Environment: providing an assessment of the company’s direct and indirect
environmental impact and risks incurred. The analysis of sovereign issuers includes a
global appraisal of government environmental policy: energy production mix and CO2
emission variations are examples of the criteria examined. The state’s willingness and
capacity to commit to reducing its environmental impact is also scrutinised.
3. Social: the issuer’s direct social responsibility is taken into account. Appraisal of
companies is based on the extent of dialogue with shareholders, workplace health and
safety considerations and career management. General social policy is considered in the
assessment of government states with a particular focus on topics such as the healthcare
system, education; the role played by women in civil society and infrastructures providing
citizens with access to basic needs.
4. Governance: includes an analysis of the issuer’s willingness and capacity to organise
its internal structure to limit dysfunction risks.
For corporate issuers, this criterion includes an evaluation of Management Board structure
and independence, transparency of remuneration systems and the existence of
independent remuneration, nomination and audit committees. For sovereign issuers, this
criterion includes an evaluation of systems used in the prevention and fight against
corruption, the stability of political structures and government capacity to introduce
necessary reforms.
5. Market conduct: analysis of the relationships between the issuer and other parties
(client suppliers, local authorities...). For companies, this criterion also includes an
evaluation of the impact the products or services have on society (mainly health and
safety) as well as the respect of market regulations (absence of anticompetitive practices).
Equity funds (such as Allianz Valeurs Durables/ Allianz Euroland Equity SRI) take into
account the five criteria listed previously.
For Allianz Valeurs Durable/ Allianz Euroland Equity SRI, 100% of the portfolio securities
must display a human rights rating higher than 1.5 and an overall ESG rating higher or
equal to 2. This ESG rating is a weighted average of the 4 listed criteria: environment,
social, market behavior and governance.
The use of derivatives financial instruments is limited to instruments with stable leverage
and a use of hedge cover against certain market situations. The use of the derivatives is in
conformity with SRI management of the funds: the derivatives whose subjacent are not
eligible according to SRI process of the funds are limited to 10% of the funds in term of
exposure. This rule does not apply to the swaps of currency and the swaps of rate insofar
as ESG analysis and SRI approach of the funds cannot apply to their subjacent.
How are the ESG criteria defined?
Criteria were initially based on the three pillars of sustainable development: economy,
social and environment. Based on these three pillars, AllianzGI France developed an
analytical structure composed of five criteria: environment, social, governance, market
conduct and human rights.
2c
These five core criteria have not been modified since. Each of the criteria itself comprises
sub-criteria which have not been revised, but have been enriched by the SRI analytical
team internally.
Any criteria modification would necessarily be carried out in collaboration with the
investment management teams and after consultation with the internal SRI committee and
the SRI Advisory Committee.
AllianzGI France draws its main input for issuer SRI analysis from selected rating
agencies. The SRI analytical team carries out complementary qualitative research which is
used primarily to determine the weighting of sub-criteria and criteria on which the rating is
based.
How are criteria changes communicated to investors?
2d
3
The only changes to date concern the weighting of sub-criteria in each of the five
analytical domains. As these were minor modifications, they were not communicated to
investors. Any major changes to the structure of ESG analysis would feed through into the
global research process accessible via the website (in French language only).
http://www.allianzgi.fr/isr/processus-de-gestion/
Section 3. ESG Research Process
Signatories should provide clear information on the ESG research process of their
investments.
Describe your ESG research methodology and process.
The SRI research team draws on data from independent extra-financial rating agencies.
Data provided by agencies is processed quantitatively and fed into an in-house database
which ranks issuers on a scale of 0 to 4 in 5 categories for equities funds (social,
environment, governance, human rights and market conduct) and 4 for fixed income funds
(social, environment, governance and human rights). As an eliminatory criteria, the
respect of human rights is taken into consideration upstream in the process whilst an
average ESG rating is calculated using the other 4 criteria.
3a
The average rating and the human rights filter determine whether it is possible or not to
invest in the issuer. This selection principle is also reinforced by a “worst practice” alert
rule. Issuers scoring the lowest corporate governance, environment or social rating are put
on the “alert” list and the SRI analysts have to carry out further research before investing.
The aim of this rule is to ensure that an issuer scoring below the minimum requirement in
one criterion does not qualify as a result of a satisfactory global rating due to high scores
in the other criteria. In addition to the quantitative processing of data from extra-financial
ratings agencies, the SRI analysts undertake complementary qualitative research and can
upgrade or downgrade average criteria or ESG ratings in the in-house ratings database.
The SRI research team intervenes in the following situations:
• Appraisal divergence between ratings agencies. Insufficient or out-of-date research
• Criteria alert arising from the database (predetermined alert thresholds).
• Controversies notified by the press or concerned parties (NGOs, unions...).
• Unrated issuers by rating agencies.
• Inclusion of complementary data from brokers, contact with company representatives,
particularly sustainable development teams, CSR experts or concerned parties.
Does the fund manager use an in-house ESG research team and/or does he
delegate this research to one or several external specialised providers?
3b
3c
In-house research is a core part of the research process into the ESG profile of an issuer.
AllianzGI France has at its disposal a dedicated transversal SRI unit, comprising a head of
department and 3 analysts covering all asset classes.
In parallel, another team is in charge of exercising voting rights for all of AllianzGI France
funds and the 5 fund managers are involved in the management of the SRI funds.
The SRI analysts use data provided by the 3 extra-financial rating agencies (Vigeo
(www.vigeo.com), EIRIS (www.eiris.org), and Oekom (www.oekom-research.com). The
research team has regular contact with these specialist agencies in order to enrich the
ESG data provided.
Is there an external control or external verification process in place for the ESG
research process?
AllianzGI France is backed by the SRI Advisory committee in the implementation of SRI
management. It is currently composed of 13 members including 10 independent externals
members, all renowned for their expertise in one of the facets of sustainable development.
The SRI Advisory Committee includes M. Grignard (deputy leader of the CFDT; one of the
French national trade unions), M. Perrin (vice-president of Amnesty International France),
Mrs. Aloisi de Larderel (ex-director of the technological, Industrial and economic division of
the United Nations programme for the environment) and also M. Moingeon (deputy
managing director of HEC; one of the foremost business schools in Europe).
The aim of this committee is to help AllianzGI France take sustainable development into
consideration along the entire SRI value chain. It also provides independent opinions
regarding conflicts of interest with financial investment requirements, and advises the SRI
research team in the event of any ESG dilemma pertaining to an issuer, a sector or theme.
Does the ESG research process include stakeholder consultation?
3d
Our research process includes consultation with concerned parties (NGOs, unions, group
committees...) through regular consultation of web resources linked to these bodies but
also more directly in the event of specific ESG problems associated with an issuer (e.g.
restructuring, doubt concerning supplier chain social standards...). Consultation also takes
place with companies either in the context of sustainable development strategy
presentations or more proactively if the research team requires complementary
information on specific topics.
Do companies/issuers have the opportunity to see their profile or analysis?
3e
Companies and issuers do not have access to their profile but an appraisal of their activity
may form a part of bilateral discussions.
How frequently is the ESG research process reviewed?
3f
Following a review in 2008, two major modifications were made to the ESG research
process for SRI equity funds which had been in place since 2002. Firstly, data from a new
extra-financial service provider was included in the SRI rating databases. Secondly, a
sector weighting system was put in place, taking into consideration environmental, social,
governance and market conduct criteria whereby global scoring is adjusted according to
industrial sector. These changes have helped fine-tune ESG ratings and optimise
investment management.
The ESG fixed-income and Money Market research processes have been created more
recently and are still being developed, principally in terms of convergence with the equity
process.
All changes are carried out through consultation with the investment management teams
and the SRI Advisory Committee.
What research findings are disclosed to the public?
Various communication channels exist for SRI investors.
Investors have at their disposal a dedicated SRI and sustainable development section on
the AllianzGI France website: http://www.allianzgi.fr/isr/ (in French language only).
3g
There is a subsection entitled “investment management processes”
(http://www.allianzgi.fr/isr/processus-de-gestion/) (in French language only)
which details, for each of the SRI funds, its SRI means and resources and investment
philosophy and provides examples of eligible or disqualified securities. There is a contact
link on the website (http://www.allianzgi.fr/menu-bottom/privacy-principles/ ) (in French
language only) through which questions can be submitted by all web users.
AllianzGI France also publishes an SRI newsletter “Valeurs” three times a year. The SRI
newsletter includes an outline of ESG research themes, an interview with a well know
figure from the world of sustainable development and presents an investment case. The
letter is available on the website
(http://www.allianzgi.fr/fileadmin/contribution/pdf/ISR/let_trim_isr_DECEMBRE_2011.pdf)
and a hard copy is sent to clients.
Finally, monthly SRI fund reports include the ESG profile of the fund (average score for
each of the criteria) in comparison with benchmark ESG profile and the global score for
the 10 largest positions can be fund here: http://www.allianzgi.fr/isr/notre-offre-isr/ (in
French language only). Please refer to section “reporting” to obtain the fund reports.
4
Section 4. Evaluation and Implementation
Signatories should provide information on how the ESG research is used to build
and maintain their portfolio.
How are the results of ESG research integrated into the investment process,
including selection and approval of companies/issuers for investment?
There is full overlap between the financial and extra-financial constituents of our issuer
evaluation process. ESG criteria are included in our issuer evaluation methodology in the
same way as traditional financial criteria, aiming to construct a portfolio with an optimum
ESG quality / financial quality profile. An issuer will therefore be included in the portfolio if,
and only if, the ESG profile and financial appraisal are both positive.
4a
Financial and extra-financial analysis is carried out based on the core investment universe.
The financial analysis opinion can be positive, neutral or negative whilst the extra-financial
analysis determines an issuer score on a scale of 0 to 4. An issuer can enter the portfolio if
the average ESG score is equal to or above 2 and if it is not excluded on human rights
grounds or due to an insufficient score in one of the rating criteria.
For Allianz Valeurs Durables/Allianz Euroland Equity SRI, 100% of the securities must be
display a rating profile of at least 2.
If the score of a security in the portfolio is downgraded and if the revised rating is confirmed
by an internal analysis, there is a one-month delay for the portfolio manager to liquidate the
position.
In order to facilitate combined SRI and financial analysis, SRI analysts work closely with
portfolio managers. SRI analysts therefore participate in equity, fixed-income and Money
Market investment management meetings, as well as monthly internal SRI committee
meetings attended by SRI teams and investment management teams for the different
asset classes.
What internal and/or external measures are in place to ensure portfolio holdings
comply (or not comply) with ESG investment criteria?
The SRI equity investment management process involves pre-trade and post-trade
controls. The order transmission system alerts the SRI equity fund manager of any
purchase of securities with an ESG score below 2. Post-trade monitoring is carried out by
reporting teams which ensure the absence of low-scoring securities and rate the SRI fund’s
ESG score against benchmark (MSCI EMU for Allianz Valeurs Durables/Allianz Euroland
Equity SRI).
4b
The SRI fixed-income investment management process does not include a pre-trade
control to ensure that securities included in the portfolio comply with minimum rating. The
fund manager, in collaboration with the ESG research team, ensures that the proposed
investment can be made in compliance with the fund’s constraints.
Post-trade monitoring is carried out via an internal system which gauges the proportion of
the fund which is invested in high-scoring securities as well as the fund’s SRI rating
compared to benchmark.
What is the policy and procedure for divestments on ESG grounds?
4c
If the ESG criteria rating of a security or an issuer is modified so that it no longer meets the
required conditions for the fund in question, or if it is subject to any ESG controversy, the
SRI research team studies the issues, enters into discussion with the parties concerned
(companies, NGOs, experts...), possibly submits the case to the SRI Advisory committee
and draws a conclusion. If the judgment is negative, the fund manager must have
liquidated the position within one month.
What divestments occurred in the past year related to the SRI fund criteria?
4d
Divestment resulting from ESG criteria occurs regularly. This is the case when SRI
analysts form a negative opinion regarding securities or issuers with a deteriorating ESG
performance. Some issuers which are subject to negative publicity regarding ESG issues
are held in portfolio if the facts do not justify a divestment to be made, or if the issuer has
put in place appropriate measures to remedy any dysfunctions observed and to avoid
further incidents. In controversial cases, the SRI analysts contact the issuer concerned to
assess the reactivity and explanations given and to enter into discussion with any relevant
parties (NGOs, unions...). Subsequently, the research team can opt not to exclude the
issuer from SRI portfolios.
In the specific case of fixed-income investment management, the lack of market liquidity
may mean that an issuer subject to negative publicity remains in the portfolio. It will be sold
as soon the market makes it possible.
Are investors informed about divestments on ESG grounds?
4e
For the time being, investors are not informed of divestments on ESG grounds.
Does the fund manager inform companies/issuers of portfolio movements due to
non-compliance with its ESG policy and criteria?
4f
For the time being, issuers are not informed of portfolio movements due to non-compliance
with ESG principles.
To what extent do any results of engagement activities feed into companies/issuers
selection?
4g
5
Following contact and dialogue, SRI analysts can modify an issuer’s ESG score in the
database.
Section 5. Engagement Approach
Signatories should explain their approach to engagement if the fund has such a
policy.
What are the aims of the engagement policy?
5a
5b
Engagement has several aims:
• To contribute to the improvement of the ESG practices of companies and governments
represented in our portfolio or within our investment universe.
• To reduce material ESG risks incurred by investments in non-SRI portfolios.
• To preserve or even broaden the SRI universe through engagement with issuers which
are on negative-watch regarding their ESG rating.
• To promote the inclusion of sustainable development in the business of companies.
How does the fund prioritise which companies/issuers it will engage with?
The SRI and Corporate Governance teams engage with issuers based on identified ESG
issues and upcoming annual general meetings, including any sensitive items on the
agenda. Priorities are identified based on the level of risk associated with the ESG issue
and also according to the size of investment in our portfolios.
Who undertakes engagement on behalf of the fund?
5c
Both the SRI and Corporate Governance Team are responsible for engaging with issuers.
Members of both teams also participate in collective investors or multi-stakeholder
initiatives, which regularly dialogue with issuers, including the Extractive Industries
Transparency Initiative, the Global Reporting Initiative and others linked to the PRI
Engagement platform.
What methods of engagement are employed?
AllianzGI France engages through several channels:
• Exercise of voting rights and filing external resolutions: For further information
please refer to Section 6: Voting Policy.
• Dialogue with companies and concerned parties.
The ESG team contacts companies directly, mainly the sustainable development
representatives, to discuss socially responsible investment. Face to face meetings are
organised providing the opportunity to discuss company CSR policy and highlight any
channels for improvement.
The ESG team also contacts companies in the event of specific ESG problems or
controversies. The company is questioned in order to evaluate its reactivity and to
understand its arguments as well as any remedial actions envisaged.
These contacts by email, by post, telephone or through meetings are frequently backed up
by discussion with NGOs, company or branch unions and any other parties which can
have an input to the situation.
5d
• Participation in Collective Investors Initiatives at national or international level.
AllianzGI France participates in Collective Investors Initiatives promoting SRI and serving
to improve issuer ESG practices.
AllianzGI France is a member of the FIR http://www.frenchsif.org/membres.html),
Responsible Investment Forum and is active more specifically within CorDial, a dedicated
discussion platform involving issuers created by the FIR. AllianzGI France pilots one of the
CorDial working groups on governance, which aims to study changes to governance
practices, especially at AGM. 26 French companies have been selected for the study. 22
of them have been interviewed by a member of the working group: a questionnaire has
been drawn up involving four themes: remuneration, inclusion of social and environmental
issues at AGMs, improved shareholder mobilisation and AGM functioning, and finally, the
role of the leading independent director.
AllianzGI France is also a founding member and administrator of the open-ended fund
Phitrust Active Investors group which aims to improve CAC40 company governance
practices; is a founding member of the Sustainable Finance and Responsible Investment
rostrum with the Toulouse IDEI-R (Industrial Research institute) and the Polytechnique
business school and board member of the ITIE (Extractives Industries Transparency
Initiative). Through our engagement within ITIE, we encourage companies and
governments involved in extraction to be more transparent, which contributes to an
improvement in issuer profile and reduces risk for portfolios invested in these issuers.
How is the effectiveness of engagement activity monitored/addressed?
5e
Engagement activity is considered a success if dialogue has been established with the
issuer and if the elements provided by the issuer enable the SRI team to take a decision
whether to maintain or not the issuer in the socially responsible investment universe:
• Maintained within the investment universe if the problem is correctly addressed and
remedied by the issuer or if the issuer undertakes to do so.
• Otherwise, the issuer exits the investment universe.
What further steps, if any, are taken if engagement is considered unsuccessful?
5f
If engagement is unsuccessful (no dialogue or unsatisfactory elements), the issuer is
excluded from the socially responsible investment universe.
If our mainstream portfolios are invested in the issuer, we continue engagement dialogue.
How, and how frequently, are engagement activities communicated to investors and
other stakeholders?
5g
In accordance with the Financial Security laws, our 2010 votes, together with the reasons
for voting against or abstaining on some resolutions, are disclosed on our website at the
following address:
http://www.allianzgi.fr/developpement-durable-et-isr/ (French language) on a regular
basis.
Hard copies are available upon request to our headquarters.
The ESG team’s direct dialogue with companies which can take place through face-toface meetings, phone, email or mail, is not disclosed on our website. However, as a
member of the FIR http://www.frenchsif.org/membres.html), AllianzGI France is active
more specifically within CorDial, a dedicated discussion platform involving issuers created
by the FIR. Information on activities of the working group can be found under
http://www.frenchsif.org/cordial.html.
What engagement activity has been carried out on behalf of the fund during the
past year?
5h
For example, AllianzGI France participated in the PRI working group on the issue of
cluster bombs and antipersonnel mines.
Section 6. Voting Policy
6
Signatories should make clear their policies on voting.
Does the fund have a voting policy?
For AllianzGI France, the exercise of voting rights is an investment management deed in
its own right. AllianzGI France voting policy applies to all of our portfolios, whether the
portfolios are SRI or not. Voting perimeter therefore includes all SBF120 index and
Eurostoxx 324 companies as well as those in which we hold more than 0.50% of the
capital across all portfolios managed by AllianzGI France.
To fully undertake this commitment, AllianzGI France follows a precise voting policy but
takes care to study the resolutions of each AGM on a case by case basis.
http://www.allianzgi.fr/fileadmin/contribution/pdf/ISR/PrincipeDeDroitDeVote2012_VA.pdf
(in English & French language).
6a
Voting policy is updated each year by the Corporate Government Committee in order to
take into account any changes in corporate government.
In the context of AllianzGI France PRI engagement, we include environmental, social and
governance criteria in our voting policy. This is consistent with our fundamental medium
and long-term investment management, and helps to understand risk and provide a global
appreciation of investment opportunities.
Our engagement is expressed through participation in the AFG corporate government
commission and in addition this year, through heading the working group created at the
end of 2009 by the FIR Responsible Investment Forum on corporate governance within
listed companies (http://www.frenchsif.org/etudes-et-dossiers ). Finally, AllianzGI France is
engaged through company contact before and after AGM.
Does the fund disclose its voting practices and reasoning for decisions?
In accordance with the Financial Security laws and with the AMF general regulations, we
have disclosed our voting statistics since 2006, accessible on our website or available at
the company registered offices.
6b
Please find hereafter the latest voting right exercise report for 2010 (French version):
http://www.allianzgi.fr/fileadmin/contribution/pdf/ISR/Rapport%20AMF%20DROITS%20DE
%20VOTE%202010.pdf. To this effect, we keep a database detailing our votes and
reasons for voting against or abstaining for each AGM. This database provides an internal
statistical monitoring and justification of our votes.
Does the fund sponsor/co-sponsor shareholder resolutions?
The funds have promoted shareholder resolutions and will continue to do so, in the
context of AllianzGI France voting right policy.
6c
AllianzGI France is a founding shareholder and administrator of the open-ended fund
Phitrust Active Investors, an open-ended shareholder initiative fund. In 2010, AllianzGI
France co-sponsored a resolution aiming to amend Société Générale's articles of
association to include the dissociation of President and Managing Director functions.
In 2010, AllianzGI France supported external resolutions filed by shareholders at the BP
and Shell AGMs requesting more transparency and information regarding the exploitation
of oil-baring sands in Canada.
What voting actions occurred that were related to the SRI fund ESG criteria?
During the fiscal year 2010, we have voted in 262 AGMs (vs. 282 in 2009). Out of them,
147 related to French companies (166 in 2009) and 115 top the Euro zone excluding
France (116 in 2009). 2009).
Nb of meetings
Nb of meetings with
votes
Proportion of meetings
with votes
France
147
147
100%
Euro zone excluding France
116
115
99%
Total
263
262
99%
Zone
Votes breakdown:
6d
Zone
Number of voted
resolutions
Vote “For”
France
2600
1889
Vote
“against”
and
abstention
711
Euro zone excluding France
1179
955
224
19.0%
Total
3779
2844
935
24.7%
Percentage
of negative
votes
27.3%
For more details, you will find the report on the exercise of voting rights in 2010 on the
website of AllianzGI France via the link below:
http://www.allianzgi.fr/fileadmin/contribution/pdf/ISR/Rapport%20AMF%20DROITS%20DE
%20VOTE%202010.pdf. As mentioned in point 6.c, in 2010, AllianzGI France supported
external resolutions filed by shareholders outside AGMs of BP and Shell requesting more
transparency and information regarding the exploitation of oil-baring sands in Canada.
Appendix
Portfolio Holdings Allianz Euroland Equity SRI as at 30/09/2011:
Security Name
Identifier
ABENGOA
ES0105200416
AIR LIQUIDE PRIME FIDELITE
FR0000053951
AKZO NOBEL NV
NL0000009132
ALLIANZ
DE0008404005
ALLIANZ CITIZEN CARE SRI I
FR0010727792
ALLIANZ CITIZEN CARE SRI R
FR0010716837
ALLIANZ SECURICASH SRI I
FR0010017731
ALSTOM
FR0010220475
AXA
FR0000120628
BAYER
DE000BAY0017
BIOMERIEUX
FR0010096479
BNP PARIBAS
FR0000131104
BUREAU VERITAS
FR0006174348
CARREFOUR
FR0000120172
CGG VERITAS
FR0000120164
DANONE
FR0000120644
DEUTSCHE BANK
DE0005140008
DEUTSCHE TELEKOM
DE0005557508
DIA
ES0126775032
ENI
IT0003132476
ESSILOR INTERNATIONAL
FR0000121667
GDF SUEZ
FR0010208488
GDF SUEZ STRIP VVPR
BE0005628020
GEMALTO
NL0000400653
GROUPE EUROTUNNEL REGROUPT
FR0010533075
HEINEKEN NV
NL0000009165
HENKEL VZ
DE0006048432
IMERYS
FR0000120859
INFINEON TECHNOLOGIES N
DE0006231004
ING GROEP CVA
NL0000303600
K+S AG NOM.
DE000KSAG888
KON.PHILIPS ELECTRONICS
NL0000009538
LAFARGE
FR0000120537
LAFARGE PRIME FIDELITE
FR0000066946
METRO
DE0007257503
MICHELIN
FR0000121261
NEXANS
FR0000044448
NOKIA
FI0009000681
NOVARTIS N
CH0012005267
REED ELSEVIER NV
NL0006144495
REPSOL YPF
ES0173516115
ROYAL DUTCH SHELL A SHARES
AGF000765105
SAFRAN
FR0000073272
SAFT GROUPE
FR0010208165
SAINT-GOBAIN
FR0000125007
SANOFI
FR0000120578
SAP
DE0007164600
SCHNEIDER ELECTRIC
FR0000121972
SUEZ ENVIRONNEMENT
FR0010613471
TATE & LYLE PLC
GB0008754136
TELEFON AB LM ERICSSON B
SE0000108656
THALES
FR0000121329
TOTAL
FR0000120271
UMICORE
BE0003884047
UNICREDIT
IT0000064854
VALLOUREC
FR0000120354
VEOLIA ENVIRONNEMENT
FR0000124141
VINCI
FR0000125486
VIVENDI
Source: Allianz Global Investors, as at 30/09/2011
FR0000127771
Definitions of key terms used in the Code
Term
AGM
Divestments
ESG
Engagement
Exclusion
Fund manager
Fund(s)
Fund Purpose
Holdings
Portfolio
Signatories
SRI
Voting Policy
Definition
General Assembly Meeting
Companies that are sold from the fund portfolio.
Environment, Social and Governance
A long-term process of dialogue with companies by investors which
seeks to positively influence company behaviour in relation to their
social, ethical, governance and environmental practices. This includes
vote at AGM, filing or co-filing shareholder proposals, asking questions at
AGM, collaborative engagement initiatives, individual company contact
and dialogue with policy makers and industry organisations.
The exclusion of sectors or companies from a fund if involved in certain
activities based on specific ESG criteria.
The entity responsible for overall management of the fund.
A legal entity, the purpose of which is solely the acquisition of portfolio
investments. This also includes compartments and sub-funds.
The spirit and overall focus of the fund, but not the investment criteria
employed.
Equities and/or bonds of companies that collectively comprise the fund
portfolio.
A collection of investments managed by the fund manager.
Fund(s) and/or fund manager that commits to disclose SRI information in
line with the Code.
SRI, a generic term covering sustainable, responsible, ethical,
environmental, social investments and any other investment process that
integrates financial analysis with the influence of environmental, social
and governance (ESG) issues. It includes an explicit written policy to
make use of ESG criteria.
Policy of a fund to exercise its voting rights as investors to influence
company behaviour.
About Eurosif
EUROSIF, the European Sustainable Investment Forum, is the pan-European network whose mission
is to address sustainability through the financial markets. Eurosif works as a partnership of the national
Sustainable Investment Forums (SIFs) within the EU and with the support and involvement of Member
Affiliates. Recognised as the premier European forum for sustainable investment, Eurosif’s Member
Affiliates are drawn from leading pension funds, asset managers, NGO’s, trade unions, academic
institutes and research providers, together representing assets totalling over €1 trillion. Eurosif's work
includes a focus across asset classes - equity and fixed income markets, microfinance, renewable
energy, property, private equity and hedge funds - all centred around the industry trends and future
legislation affecting this space. The key benefits that Eurosif affiliate members receive include EU
interfacing, SRI information and European wide initiatives that integrate Environmental, Social and
Governance (ESG) issues into the financial services sector. For the full list of Eurosif Member
Affiliates, please see www.eurosif.org.
National social/sustainable investment forum to date include:
 Belsif, Belgium
 Dansif, Denmark
 FNG – The German, Austrian and Swiss Sustainable Investment Forum
 Forum per la Finanza Sostenible, Italy
 Forum pour l'Investissement Responsable, France
 Norsif, Norway
 Spainsif, Spain
 Swesif, Sweden
 UKSIF, UK
 VBDO (Vereniging van Beleggers voor Duurzame Ontwikkeling), The Netherlands
For further information contact Eurosif at +33 1 40 20 43 38 or by email at contact@eurosif.org.
Additionally, feel free to see the most updated information on the Transparency Code at
www.eurosif.org.
Eurosif
La Ruche – 84 quai de Jemmapes, 75010 Paris, France
Tel: +33 1 40 20 43 38
www.eurosif.org
Disclaimer
Investing involves risk. The value of an investment and the income from it may fall as well as rise and
investors may not get back the full amount invested.
The volatility of fund unit prices may be increased or even strongly increased. Past performance is not
a reliable indicator of future results. If the currency in which the past performance is displayed differs
from the currency of the country in which the investor resides, then the investor should be aware that
due to the exchange rate fluctuations the performance shown may be higher or lower if converted into
the investor’s local currency.
This is for information only and not to be construed as a solicitation or an invitation to make an offer, to
conclude a contract, or to buy or sell any securities. The products or securities described herein may
not be available for sale in all jurisdictions or to certain categories of investors. This is for distribution
only as permitted by applicable law and in particular not available to residents and/or nationals of the
USA. The investment opportunities described herein do not take into account the specific investment
objectives, financial situation, knowledge, experience or particular needs of any particular person and
are not guaranteed. The views and opinions expressed herein, which are subject to change without
notice, are those of the issuer and/or its affiliated companies at the time of publication. The data used
is derived from various sources, and assumed to be correct and reliable, but it has not been
independently verified; its accuracy or completeness is not guaranteed and no liability is assumed for
any direct or consequential losses arising from its use, unless caused by gross negligence or willful
misconduct. The conditions of any underlying offer or contract that may have been, or will be, made or
concluded, shall prevail.
Contact the issuer electronically or via mail at the address indicated below for a free copy of the sales
prospectus, the incorporation documents, the latest annual and semi-annual financial reports and the
key investor information document in English. Please read these documents - which are solely binding
- carefully before investing.
This is a marketing communication. Issued by Allianz Global Investors Europe GmbH,
www.allianzglobalinvestors.eu, a limited liability company, incorporated in Germany, with its registered
office at Mainzer Landstrasse 11-13, D-60329 Frankfurt/Main, authorized by Bundesanstalt für
Finanzdienstleistungsaufsicht (www.bafin.de). The duplication, publication, or transmission of the
contents, irrespective of the form, is not permitted.