Asset manager Allianz Global Investors (AllianzGI) has grown the volume of sustainable investments it manages over the last three years from around 25 billion euros to 165 billion euros as of the end of 2019.
The largest portion of these assets, 80%, are a result of the asset manager’s push towards integrating environmental, social and governance (ESG) criteria into portfolios’ opportunity and risk management.
Sustainably managed assets across the categories of integrated-ESG, socially responsible investment, sustainable development goals (SDGs), and impact investing grew by around 20 billion euros, or 14%, in 2019 alone.
Last year’s increase in assets is due to sustainability strategies that were either newly launched or converted from traditional ones, and innovations in the area of impact investing, according to a recent AllianzGI sustainability report.
Active stewardship, through engagement and proxy voting, also continues to become increasingly important. In 2019, AllianzGI intensified its company engagement programme, engaging on 448 occasions, 31% more than the previous year, with 333 companies, verses 247 in 2018.
Corporate governance is traditionally the main focus, but AllianzGI also addressed environmental and climate risks with over 80 companies.
Climate concerns have also emerged as an important theme in proxy voting. In a report by the non-governmental organization ShareAction on how global asset managers deal with climate-related shareholder proposals, AllianzGI was ranked second out of 57.
“Given the human and financial damage inflicted by the coronavirus crisis, the focus on responsible and sustainable business conduct is likely to increase,” says Tobias Pross, AllianzGI’s chief executive officer. “A similar kind of international focus and co-ordination will be required to prevent global warming and facilitate the transition to a carbon-neutral economy.”
However, “the nature of some risks is that they are almost impossible to predict – so-called “black swan” events like the coronavirus outbreak – but the consensus is that there is a “green swan” risk emerging: the failure to address climate change”, says Beatrix Anton-Groenemeyer, AllianzGI’s chief sustainability officer. “We are at a turning point where private investors want to invest their money not only for positive returns but also in a sensible, beneficial way for society.”