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“OUR KNOWLEDGE OF RISK, OUR FINANCIAL RESILIENCE AND LONG-TERM INVESTMENT HORIZON ENABLE US TO OFFER MORE EFFECTIVE SUPPORT FOR CLIMATE PROTECTION WHILE MAKING THE MOST OUT OF LONG-TERM OPPORTUNITIES FOR OUR CUSTOMERS” Oliver Bäte, CEO of Allianz SE

AUGUST 2017

GLOBAL WARMING THREATENS TO RADICALLY CHANGE OUR CLIMATE AND ENVIRONMENT

Climate change, mainly caused by human-activity induced global warming, poses a major risk to the livelihoods of millions of people worldwide. It affects the wealth of societies and the value of companies, since the frequency and severity of weather extremes – such as heat waves, droughts, floods, storms – are expected to increase and sea levels are rising. The first impacted sectors are coastal infrastructure, agriculture and water, but also energy generation.

WORLD GOVERNMENTS AGREED TO LIMIT GLOBAL WARMING TO ‘WELL BELOW 2°C’

In 2015, world governments have agreed to take action to limit global warming. The declared aim of the Paris Summit Declaration is to limit temperature rises to well below 2°C above preindustrial levels before the end of century. This will require a steep reduction of global emissions, with a peak in 2020 and net zero emissions in the second half of the century.

Climate-related regulation is likely to affect investment considerations. An investment may not deliver the expected return as regulation is put in place that restricts the assets’ oper-ational lifetime. This could particularly affect carbon- and energy-intensive industries but also e.g. the automotive industry. There are opportunities, too.

Some companies are faster than others in adapting to this transition and low-carbon and storage technologies become increasingly cost competitive.

CLIMATE CHANGE IMPACTS US

Insurers are exposed in two ways: through policies covering damage caused by natural disasters, e.g. storms and floods, and as large- scale institutional investors with e.g. significant stakes in companies affect-ed by changing weather patterns, tightening regulation and/or shifting consumer behaviour.

Growing populations in large parts of Africa and Asia and the increasing concentration of people and insured assets in cities, mean an accumulation of exposure to natural catastrophes in those regions.

The fact that climate change will also affect public health and increase the risk of pandemic outbreaks is relevant for Allianz not only as an insurer but also as an employer of over 140,000 people worldwide.

At the same time, this unprecedented challenge creates opportunities and incentives for the development of new products and services that can drive economic development and generate social benefits.

We encourage solutions for tomorrow’s climate. We anticipate the risks of climate change, work to protect and care for our customers and enable the transition to a low-carbon economy.

CLIMATE CHANGE STRATEGY OF ALLIANZ GROUP

G7InsuResilience

Munich Climate

Insurance Initiative United Nations

Environment Finance

Initiative

The B Team

Principles for Sustainable

InsurancePrinciples for Responsible Investment

Portfolio Decarbonization

Coalition

WE INTEGRATE CLIMATE PROTECTION INTO OUR CORE BUSINESS

As a leading global corporation and corporate citizen, Allianz is both capable of and responsible for devel-oping and offering solutions for a changing climate and enabling the transition to a low-carbon economy. Therefore, we are committed to inte-grating climate protection firmly into our core business.

Allianz is well positioned to finance sustainable infrastructure projects globally – in particular with the right partners. More systematic co-financing approaches with e.g. multilateral development banks could greatly fa-cilitate mobilizing the capital needed for a 2°C transition.

We are engaged in leading industry initiatives to share knowledge with peers, convey messages to decision makers and jointly develop innovative solutions.

Via targeted internal and external communication activities, we keep our employees informed and place climate change high on the public agenda.The Allianz Group Climate Change Strategy was put in place in 2005 and is regularly updated.

WE ANTICIPATE THE RISKS OF A CHANGING CLIMATE … AS AN INVESTOR

Recognizing that climate change can severely impact our business activities, we systematically consider

climate and sustainability criteria in our investment decisions across all asset classes.

For non-listed assets, such as infra-structure and real estate, we apply comprehensive environmental, social and governance (ESG) guidelines, based on international best-practice and jointly developed with NGOs. For listed assets, like equities and bonds, we systematically take ESG criteria into account1, including carbon emissions, energy efficiency, and environmental footprint.

In response to transition risks, Allianz has stopped financing predominantly coal-based business models.2

Allianz SE is a member of the Port-folio Decarbonization Coalition (PDC) and, together with both our asset management entities Allianz Global Investors3 and Pimco, signatory to the Principles for Responsible Invest-ment (PRI). These commitments help us to leverage our responsible investment practice.

Allianz partners with peers, research institutes and NGOs to undertake, commission and support cutting-edge research to better understand the impacts of climate change, to share expertise and to develop tools and

1 Based on MSCI ESG Research data.

2 For details see Allianz’s Statement on Coal-based Investments.

3 For details see AllianzGI’s Climate Risk Statement.

ALLIANZ CLIMATE SOLUTIONS GMBH (ACS) is the Climate Change Center of Excellence of Allianz Group. ACS is responsible for Allianz’ Climate Change Strategy. It acts as a focal point and platform for Allianz’ risk and investment expertise worldwide to encourage the develop-ment of solutions for a changing climate.

models e.g. for the assessment of carbon risks and for analyzing the low-carbon transition like in our yearly Allianz Climate and Energy Monitor report.

WE CARE FOR OUR CUSTOMERS … AS AN INSURER

Managing risks is our profession. We will further expand our offers to com-prehensively insure climate-related risks for commercial and private cus-tomers – also incentivizing preventive measures to increase our customers’ resilience to a changing climate.

We build on our experience as a leading micro-insurer and reinsurer in agriculture to bring climate risk insurance mechanisms, including weather index insurance and yield loss or animal mortality covers, to vulnerable regions.

We actively support the InsuResilience initiative of the G7, which aims to pro-vide climate risk insurance to additional 400mn vulnerable people by 2020.

We are researching the actual and future impacts of climate change, in order to provide the best possible risk advice for society and our customers. We develop prevention and resilience approaches to respond to the chal-lenges that arise.

Allianz is signatory to the UNEP FI Principles for Sustainable Insurance (PSI) and leads global efforts on the creation of ESG standards for underwriting.

WE ENABLE POSITIVE CHANGE…

… as an investorWe are committed to further expand-ing our investments in low-carbon assets like renewable energy, with a track record of over EUR 4.6 bn invested to date. Allianz also offers several renewable energies funds for institutional investors, who want to invest in low-carbon infrastructure.

Once the newest fund, AREF II, is fully invested, the team at Allianz Global Investors will manage ca. EUR 1.6 bn in renewable energy and infrastruc-ture projects in Europe.

As one important element of our oper- ational decarbonization strategy we have directly invested in certificate- generating carbon reduction projects in Kenya, the Democratic Republic of Congo and Indonesia, which also help protect biodiversity and support local communities.

… as an insurerWe provide over 150 sustainable solutions for our customers, from special tariffs for electric cars over energy efficiency advisory to environ-mentally themed funds.

We are a leading insurer for renew-able energy, developing and offering insurance solutions for renewables technologies and energy efficiency via Allianz Group’s risk carriers.

… as a company and corporate citizen Allianz is operating carbon neutrally since 2012. Since 2006 we have been annually measuring and reporting on our environmental performance. We are firmly committed to minimizing our environmental impact in line with our published Group Environmental Guideline. Key measures include energy efficiency, sourcing renewable energies, low-carbon travel alternatives and resource efficiency.

Supported by our network of more than 60 Local Environment Officers in our entities worldwide, we will continue to drive lighthouse initiatives to inspire others and to continuously improve our environmental performance: Our 2020 targets include reducing CO2 emissions and energy use per employee by 30% (against 2010).

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