esg matters

A ‘green’ price tag for sustainability?

Climate change: What investors need to know

Safety matters: Measuring companies’ safety performance

Fixed returns to fix the planet?

ESG mattersEnvironmental, Social and Governance thought pieces

Issue 8 | September 2014

Women in the Boardroom– Why Europe is winning the race

2

The Global ESG Team

LONDON

Bozena Jankowska, Global Co-Head of ESG

Marissa Blankenship, ESG Analyst

Brian Kennedy, Product Specialist, Global Sustainability & EcoTrends

Jeremy Kent, ESG Analyst

PARIS

David Diamond, Global Co-Head of ESG

Marie-Sybille Connan, ESG Analyst

Ange-Wilfried Ezoua, Proxy Voting Officer

Mathilde Moulin, ESG Analyst

FRANKFURT

Ioannis Papassavvas, Proxy Voting Specialist

Rainer Sauer, Proxy Voting Specialist

HONG KONG

Henrike Kulmann, ESG Analyst

SAN FRANCISCO

Verity Chegar, ESG Analyst

CONTACT DETAILS

For any further information please contact:

Bozena JankowskaGlobal Co-Head of ESG [email protected] +44 20 7065 1468

Allianz Global Investors Europe GmbH, UK Branch199 BishopsgateLondon EC2M 3TY www. allianzgi.co.uk 0800 317 573

© 2014 Allianz Global InvestorsAll rights reserved

Dear reader

Welcome to the 8th edition of ESG matters. Within the lead article, Marissa Blankenship examines the challenge companies face globally of achieving diversity in the boardroom and how the topic has progressed at differing speeds regionally. This issue commences with Henrike Kulmann examining how environmental risk assessment is driving innovation in the clothing industry and discusses its potential to impact consumer preferences. We look at the risk and opportunities which climate change presents to the investment community according to the latest report prepared by the Intergovernmental Panel on Climate Change (IPCC). Also, Jeremy Kent addresses the issues around workplace safety, focusing on the challenges around the measurement of workplace injuries and the potential of safety issues to materially impact companies’ financial performance. Finally, Ange-Wilfried Ezoua addresses at the rapidly developing market for green bonds and assesses their suitability for environmental financing.

We hope that you find the issues raised through the articles in this edition insightful and, as always, we welcome comment and questions on any of the pieces raised in this edition of ESG matters.

Bozena Jankowska

Global Co-Head of ESG

Bozena Jankowska

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EXECUTIVE PAY

Contents

ESG Matters | Issue 8

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21

08

04 A ‘GREEN’ PRICE TAG FOR SUSTAINABILITY?

08 CLIMATE CHANGE: WHAT INVESTORS NEED TO KNOW

12 SAFETY MATTERS: MEASURING COMPANIES’ SAFETY PERFORMANCE

16 WOMEN IN THE BOARDROOM – WHY EUROPE IS WINNING THE RACE

21 FIXED RETURNS TO FIX THE PLANET? PUTTING GREEN BONDS AT THE HELM OF ENVIRONMENTAL FINANCING

26 ALLIANZ GLOBAL INVESTORS AND ESG

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What do you pay attention to when shopping for clothes – design, fit, price, brand, fabric? What about the environmental impact of the piece of clothing you are intending to buy?

While factors such as price or fabric are very easy to consider for purchase, the big question for the conscious customer is HOW to integrate the environmental footprint of products when shopping for clothes. An industry-wide tag indicating how resource intensive the item was to produce simply does not exist yet. A big effort and willingness by the industry would be required in order to reach a scale which would allow for adoption of a common methodology to

calculate the footprint and promote clothes based on a ‘green’ tag together with the price tag. Yet, there are inspiring industry initiatives such as the Higg Index which could potentially provide a starting point for innovating the way brands interact with their clients.

If we look at consumers’ behaviour, the picture is quite paradox. On the one hand, there is evidence that environmentally friendly clothing is on customers’ minds. According to Hennes and Mauritz (H&M), which constantly measures how its brand is perceived from an environmental, social and governance (ESG) perspective, almost 30% of its customers say they are actively looking

A ‘green’ price tag for sustainability? HENRIKE KULMANN EXPLORES HOW ENVIRONMENTAL RISK ASSESSMENT DRIVES INNOVATION IN THE APPAREL INDUSTRY AND COULD CHANGE CONSUMERS’ SHOPPING BEHAVIOUR.

Price tag forSustainability/

section 1

Henrike KulmannESG Analyst, Hong Kong

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for environmentally friendly clothing. However, while the interest in the area is increasing, there has been no noticeable negative impact on clothing sales following negative media reporting about chemicals used in textiles or supply chain practices, for example. That said, customer behaviour could eventually change – especially if the means to assess the environmental footprint with a single look on the price tag were offered either by external parties or competitors.

We argue that one explanation of why controversies have not translated into negative sales impact is that the average customer does not have the tools to make an informed decision that enables him/her to differentiate brands based on the energy and water intensity of products expressed in one consolidated sustainability score that forms part of the price tag. As the apparel industry is in the spotlight of non-government organisations (NGOs) with controversies being reported constantly, the perception of the sector as a whole is suffering. In our view, this might give the majority of the consumers the impression that they do not have alternatives even if they wanted to include environmental concerns into their purchasing decision. This could be one reason why sales do not

decline significantly despite negative news flow. Going forward, an environmental tag at the product level could differentiate companies that follow high standards and set themselves apart from the competition.

However, a tag showing a standardized scale for the environmental footprint for example an item of clothing, is still some way from becoming the norm. There are initial steps being made in creating more transparency for customers. Testex, a Swiss based company providing certification for eco textiles, set up a platform to enable customers to check the validity of their Oeko-Tex label. Each textile carrying the label has a certification number which customers can validate online. When we turn to the consumer staples industry, mobile apps such as “My Food Facts” already allow consumers to scan any barcode with their phone and instantly receive inform ation on ingredients and food allergy alerts. In cosmetics, apps such as “Think Dirty” and “Skin Deep” rate the health impact of products focusing on potentially hazardous ingredients. The regulations around food products and cosmetics leave companies no choice but to disclose the ingredients of their products and this subsequently makes it easy for consumer advocacy groups to leverage the

information p r o v i d e d . While this is not the case in the textile and apparel sector, these examples still show that there’s a lot of innovation potential around the issue which could serve as an inspiration for apparel brands.

Some players in the industry are already working on solutions to track the environmental footprint across the life-cycle of a product. If successful, their work could lay the foundations for an environmental tag. A front runner is outdoor company Timberland which created a “Green Index®” to measure the impact of their products on the environment. Products are rated from a scale from 10 to 0 and are shown in a tag. The lower the score, the smaller the footprint compared to other Timberland products. However, the customer can only benchmark Timberland products against each other, without including industry information as it is not available yet. One key industry initiative trying to change that is the “Sustainable Apparel Coalition (SAC)” which has been developing the “Higg Index” to measure the environmental and social footprint of apparel and footwear products.

Some players in the industry are already working on solutions to track the environmental footprint across the life-cycle of a product.

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60 corporate members such as Nike, Burberry, VF (incl. Timberland), Adidas, Kering, Ikea, Gap, H&M, Inditex, Macy’s, Target and Walmart have teamed up with selected producers, industry associations and the US Environmental Protection Agency1 aiming to:

“lead the industry toward a shared vision of sustainability built upon a common approach for measuring and evaluating apparel and footwear product sustainability performance that will spotlight priorities for action and opportunities for technological innovation”.

Their key focus is the “development, piloting and broad adoption of the Higg Index”.

The work scope includes the following topics:

• Water use and quality

• Energy and emissions

• Waste

• Chemicals and toxicity

• Social and labour

In June 2012, the Higg Index 1.0 was released based on tools that have been developed separately before by companies such as Nike, industry associations and NGOs. After a pilot testing phase of 14 months, an updated version was made available in December 2013.

All Higg Index content is open source to allow for wider adoption. It was primarily designed for companies to identify areas for internal process improvement and help to evaluate impacts through three different lenses – facility, brand and product.2 In our view, this could set the foundation for a sustainability tag.

At the moment, the most robust data appears to be available for the product segment and is continuously evolving. Thus, this could be a good starting point for a green tag and could have the potential to eventually reflect the environmental impact of clothes across the full life-cycle. Currently, the product models are used by designers to integrate the environmental

Higg Index 2.0

• Environment: Apparel/Footwear: used to assess environmental performance of material, packaging and manufacturing facilities.

• Social/Labour: Apparel/Footwear – Beta: used to assess the social and labour performance of material, packaging and manufacturing facilities.

Facility

• Environment: Apparel: assess apparel product-specific environ mental practices at the brand level.

• Environment: Footwear: assess footwear product-specific environ mental practices at the brand level.

• Social/Labour: Apparel/Footwear – Beta: assess social and labour, apparel and footwear product-specific social and labour practices at the brand level.

Brand

• Rapid Design Module (RDM) – Beta: prototype to test how we can guide designers on sustainable product design with directi on ally correct inform ation and streamline decision support framework.

• Materials Sustainability Index (MSI) Data Explorer: online platform to allow users to understand the data and methodology behind MSI Base Material Scores, which can be seen in the RDM - Beta. Also serves as a data submission platform to improve the quality of material scores or add new materials, performance of material, packaging, and manufacturing facilities.

Product

Source: Sustainable Apparel Coalition - http://www.apparelcoalition.org/higgindex/

Price tag for Sustainability/section 1

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impact of materials in the design process. On the facility side, the modules available have only started to also integrate quantitative data such as energy and water usage in order to help facilities to create “baseline” measurements. At this stage, the Higg Index specifically mentions that the data collected in the facility segment is not intended to help create environmental product declarations.

That being said, the efforts of the SAC are quite remarkable and have been unprecedented. It showcases that key industry players are strategically thinking about assessing the environmental impact of their products across the life-cycle of their products even though there is still a

long way to go. In our view, companies ahead of the curve could also use these tools to help sell their most innovative products. Nike and Adidas, for example have started to produce apparel via a waterless and chemical dyeing process. A green tag would help to get out the message to customers in an easy and efficient way. Currently, these efforts are mainly driven by considerations related to operational risk management, i.e. by preparing for water and energy related risks. In the future they could benefit further by developing a tag that translates these efforts into a score to be communicated to a broad customer base. There is a significant number of customers

that consider themselves to be environ-mentally conscious but it is still a niche market. A green price tag could release that untapped market potential.

1 http://www.apparelcoalition.org/current-members/

2 The web tool for the index is currently available for SAC members and non-member manufacturers only.


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Climate change/

section 2

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For investors wanting to avoid uncertainty and identify opportunity, it will be increasingly critical to understand the unappreciated complexities and mechan-isms that are working in tandem with climate change. So what do investors need to know and what can they do?

in areas such as agriculture, water use, land management and infrastructure. In addition it states that poor policies and management of these areas will act to magnify climate change, further spurred by the stresses imposed on the world’s resources by a growing global population which,

The fifth IPCC report highlights that the consequences of climate change are not solely limited to the decisions we make about the environment. It states that, the scale and impact of climate change will also be determined by a myriad of socio-economic factors and the decisions we take

Climate change: a new era of uncertainty and opportunityIN THE INVESTMENT WORLD, UNCERTAINTY AND OPPORTUNITY SIT AT OPPOSITE ENDS OF THE INVESTMENT APPETITE SPECTRUM. YET, ACCORDING TO THE LATEST ASSESSMENT REPORT FROM THE INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE (IPCC), THIS IS EXACTLY THE KIND OF MIXED FUTURE THE WORLD IS FACING. BOZENA JANKOWSKA INVESTIGATES.

Bozena JankowskaGlobal Co-Head of ESG,London

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Climate change/section 2

according to the World Bank and United Nations, is expected to reach over 9bn by 2050.

The now familiar call to move away from ‘business as usual’ continues to resonate in the IPCC report coupled with calls from the Co-Chairs of the Working Group III (responsible for the fifth IPCC report), to “decouple greenhouse gas emissions from the growth of economies and populations” which can only be achieved via major institutional change, technological change and investment.

So what are we looking at? In 2010, total man-made greenhouse gas emissions were the highest in human history. Emissions have grown at double the rate per year in the last decade compared to 1970-2000. Food production is expected to be impacted, particularly wheat, rice and maize yields, in already poor and vulnerable areas of the world such as Africa. Combined with poorly thought-out policies around land and water management which leave little room for climate change adaptation, we can expect to see complex economic scenarios play out. For example, we may see greater volatility in soft commodities prices, higher input costs for food manufacturers and retailers and higher food prices. Recent history has shown food price hikes can be a catalyst for political and social instability and uncertainty, all of which among other things, impact investor confidence. Major unpredictable weather events which the IPCC expects to become more frequent, will require appropriate infrastructure systems to protect us from the worst effects of climate change. The current infrastructure may have been adequate to deal with weather events of the past but may not be suitable to deal with the climate change driven weather patterns of the future. For example, inadequate inland and coastal flooding defence pose risks for large urban areas in addition to heat stress, extreme rainfall, droughts and water scarcity. Decisions taken today on infrastructure systems and spend therefore need to incorporate long-term thinking on climate change if they are to remain resilient and future proof.

What can investors do and how can than they find opportunities in all of this uncertainty?

The most obvious investment route that investors can explore lies with low carbon technologies, i.e. those which specifically provide climate change mitigation

and adaptation solutions such as alternative energy, energy efficiency or technologies which address broader climate concerns such as water and pollution control. The market opportunity despite the recent downturn cannot be ignored. According to the Global Trends in Renewable Energy Investment 2013 Report1, investment in renewable power and fuels was US$244 billion in 2012, down 12% from the previous year’s record figure of US$279 billion. Despite this, 2012’s total was still the second-highest ever and 8% up on 2010. Part of this slowdown is attributable to uncertainty in policy regimes for alternative energy in developed economy markets. However, activity in developing markets is acting to shift the balance, whereby total investment in developed economies in 2012 was down 29% at US$132 billion. In developing economies it was up 19% at US$112 billion, the highest ever suggesting that over the next few years, the majority of renewable energy investment is likely to be in developing countries.

The green bond market (bonds whose proceeds are used to fund environmentally friendly projects) is another emerging investment opportunity. Since government funds alone will not be enough to build the resilience needed to address the extreme weather events that threaten energy, water and food supply, there is a need for private and institutional investors to step in and provide much needed investment. Two entities of the World Bank – the International Bank for Reconstruction and Development and the International Finance Corporation (IFC) – have been at the heart of the development of the global green bond market. The added benefit for investors is that they are Aaa/AAA2 rated issuers. What contribution can green bonds make towards climate change mitigation and adaptation? In China, green bonds have helped to reduce community vulnerability to natural disasters through flood defences and warning systems. In Colombia and Mexico they have helped to support mass transport systems and renewable energy projects, whilst in Tunisia improved efficiency in irrigation and reliable water supply in areas of groundwater stress have been funded via green bonds. The most recent offering from the IFC of $1 billion issued in November 2013, attracted a new set of green bond investors, including the Ford Motor Company, Microsoft, and the central banks of Brazil and Germany. Corporates themselves are also issuing green bonds as evidenced by the French utility company EDF, which

11

issued a €1.4 billion green bond and was two-times oversubscribed suggesting that appetite for green bonds is solid.

At the stock level, investors may want to take a closer look at how companies within their portfolios are mitigating and adapting to climate change. For instance, evaluating what climate change strategies and innovations are being developed across the business to manage material climate change. Companies reporting to the Carbon Disclosure Project (CDP) have described how climate change related factors have already impacted their operations. Gap Inc. reported experiencing higher material costs for cotton due to changes in rainfall and drought in China. Hewlett-Packard described a decline in revenue of 7% following the 2011 floods in Thailand, whereas Consolidated Edison, Inc. disclosed costs related to Superstorm Sandy at over $431 million. The level of

Global new investment in renewable energy: developed vs. developing countries, 2004-2012, $bn

3248

73

103112 104

150

186

132

817

2743

59 6477

94112

2004 2005 2006 2007 2008 2009 2010 2011 2012

Developed Developing

Source: UNEP, Bloomberg New Energy Finance, June, 2013


disclosure by companies on their climate change exposure including their carbon emissions is increasing (as evidenced by the Carbon Disclosure Project and data available on Bloomberg) allowing investors to compare and contrast how companies are performing, as well as managing and identifying future business opportunities arising from climate change impacts. It is here where focused environmental, social and governance research can come into its own for the climate change engaged investor.

Climate change and its interplay with various socio-economic factors are highly complex issues. Yet, the supporting science continues to evolve and contributes to our growing level of confidence (which, according to the IPCC Fifth Assessment Report published on 30th September 2013 shows a 95% confidence level) that climate change and human activity are linked. With the high level of scientific confidence, growing body of evidence from corporates and evolving capital markets, this surely lays the foundation for investors to begin to explore what climate change means for their investments.

1 Report compiled by Frankfurt School United Nations Environment Programme (UNEP) Collaborating Centre for Climate & Sustainable Energy Finance and Bloomberg New Energy Finance.

2 Standards and Poor’s.

The most obvious invest ment route that investors can explore lies with low carbon technologies.

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Safety matters: Measuring companies’ safety performanceMATERIAL, ENVIRONMENTAL, SOCIAL AND GOVERNANCE ISSUES DRIVE THE ALLIANZGI ESG RATINGS. JEREMY KENT LOOKS AT ONE METRIC AND WHY IT IS AN IMPORTANT FACTOR FOR INVESTORS TO INCORPORATE IN THEIR ANALYSIS.

In the next 15 seconds 160 workers will experience a work related accident and one will die as a result of a work related accident or disease. The social and economic costs of work related incidents are vast with the International Labour Organisation (ILO) estimating poor occupational safety practices coming in at a staggering cost of 4% of global gross domestic product (GDP) every year. These costs burden both society and companies where they occur. Before taking the decision to invest in a company, assessment of how the business manages its exposure to safety risk should be conducted.

Safety is important across most sectors and all regions. Activities such as mining, energy, and construction are well known for their dangerous work environments highlighted by headlines

Safety matters/section 3

Jeremy KentESG Analyst, London

13


such as the Gulf of Mexico oil spill in 2010 or more recently the Turkish mining disaster in May 2014 where 301 miners died. The importance of safety is not limited to dangerous industries, it can be equally relevant to companies in less hazardous sectors such as retail. Employees working in a store front may only be exposed to slips, trips and falls but the more important aspect of safety to control is throughout the supply chain where incidents can cause significant disruption to the business. The Rana Plaza factory collapse in Bangladesh last year is an extreme example of the potential impact that poor safety standards can have for the industry. The tragic loss of life illustrates the direct effect of improper safety controls but the indirect effects can cause severe disruptions to the business.

The American Society of Safety Engineers estimates that the indirect costs of injuries can be as much as 20 times the direct costs. Indirect costs of a workplace injury include training and compensation, repairing damaged equipment, scheduling delays, lost productivity, and lower workplace morale. The aftermath of the building collapse in Bangladesh shows the ongoing efforts needed to remedy safety issues when they are not managed properly. More than 200 factory inspections a month were being conducted as a result of the collapse but 12 months after the incident only a quarter of garment factories in the country had been inspected.

Measuring safety performance

There are several measures that can be used to asses a company on its safety performance:

• Number of fatalities

• Frequency of injuries

• Near-misses

• Hours of safety training provided

• Evidence of management systems and policies

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A common metric that we highlight here is the lost time incident rate (LTIR). This metric measures the number of incidents that result in an employee losing time from work per 200,000 hours worked (roughly equivalent to 100 full-time employees).

Nearly 1,000 companies across the world report the LTIR for the business which allows for comparison across peers and even industries. Figure 1 shows the lost time incident rate by sector for the companies in the MSCI World Index.

It is perhaps surprising to see consumer companies with the highest lost time injury rates but familiar injuries such as a back strain explain many of the workplace injuries. According to a 2011 study by Liberty Mutual’s Research Institute for Safety, overexertion such as lifting a heavy object accounted for more than 25% of all workplace injuries in the US by direct cost. Most of these injuries are preventable and eliminating them can drive productivity gains and cost savings. The relatively low LITR’s seen in intensive industries such as energy and mining is a reflection of the significant effort that these industries have placed on improving safety during the last decade and a testament that progress can be made. Figure 2 from the International Association of Oil & Gas Producers shows the industry has cut the injury rate by more than half during the last 10 years.

Linking the lost time injury rate metric to an employee’s pay is a good mechanism for driving improvement in safety. While it is relatively uncommon for the highest level executives to have compensation tied to safety performance, though there are exceptions, mid-level managers will often have safety objectives tied to compensation.

The LTIR metric is not without imperfections as a tool for analysing safety performance. This indicator is not often verified or audited by a third party, so the accuracy of the data

Safety matters/section 3

Figure 1: Lost time incident rate

Info

rmat

ion

Tech

nolo

gy

Ener

gy

Heal

th C

are

Mat

eria

ls

Utilit

ies

Tele

com

mun

icatio

ns

Finan

cials

Indu

stria

ls

Cons

umer

Sta

ples

Cons

umer

Disc

retio

nary

0.12 0.160.28 0.32

0.450.56 0.58

0.69 0.70 0.72

Source: Bloomberg data as of June 2014, lost time injury rate per 200,000 hours worked. Y axis – Lost time injuries per 200k hours worked.

Figure 2: Lost time industry frequency – company and contractors (per million hours worked)

Contractor Overall Company

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

2.0

1.5

1.0

0.5

0.0

Source: OGP; Safety Performance Indicators Report, June 2013.

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is subject to the diligence of the company. Also, different countries have different standards on reporting and classifying whether an injury should be recorded. This can make it difficult to collate a group rate for a company that has operations in many regions. However, as more companies record and report this figure, the quality of the information should continue to improve.

The LTIR is just one of several factors that AllianzGI ESG research uses to assess the social performance of a company. Within the social domain many indicators can be qualitative by nature, whereas this metric allows for quantitative measurement. Materiality to the business and measurability are just the type of characteristics we like when generating ESG ratings for our global universe of companies.

The LTIR is just one of several factors that AllianzGI ESG research uses to assess the social performance of a company.

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Women in the Boardroom /

section 4

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But unlike the famous Aesop fable, The Tortoise and the Hare, slow and steady is unlikely to win the ‘race’. With European states leading the way in the form of quotas and the United Kingdom embracing voluntary targets, the rest of the world lacks strategy and has failed to take enough action to make a difference in balancing the boardroom.

A further look at some of the leaders shows that positive change has resulted from a combination of quotas, voluntary targets, corporate governance codes and shareholder activism. The laggards have demonstrated that historic corporate governance structures as well as cultural norms can create a significant barrier to achieving balanced boardrooms. This includes the risk that reforms are not taken seriously and can lead to tokenism which is neither good for business nor diversity.

Adding one is not enough

Based on analysis completed by governance specialist and proxy voting house Glass Lewis in 2013, of 1,400 global companies and 15,500 board directors, 69% of companies have at least one female director but at the current pace of change, it will take an astonishing 70 years to reach boardroom equality.1

Any discourse focused on adding one woman to the board is simply not productive. To balance the boardroom, companies, governments, and investors must raise awareness and set the bar

high. Taking Europe and the UK as models, the benchmark must be at least 25% women’s representation on boards. Currently only Norway, Sweden, Finland and France meet this benchmark but Germany, Italy and the Netherlands are not far behind and recent data from the UK also suggest that representation is now over 20%.

The leaders - Europe

Increasing diversity in Europe has largely taken effect due to changes in legislation and the introduction of quotas. The trend began in 2005, when Norway amended the Norwegian Public Limited Liabilities Act and implemented the 40% requirement for women on boards. Companies which did not meet the requirement faced fines or dissolution and companies who did not want to comply went private.

Other European countries followed suit. Both France and Italy passed quota legislation. Germany amended its corporate governance code to encourage companies to respect diversity and consider women when nominating directors. Subsequently Germany passed legislation requiring 30% of supervisory boards to be women by 2016. Most recently, the European Union has considered adopting quotas with a proposal of 30% representation by 2015 and 40% by 2020.

It is important to note that not all success in Europe has been driven by quotas as Sweden (27% representation),2 Finland (26.8% representation) , and the UK (20.7% representation) have done so with a voluntary approach. In Sweden, the corporate governance code recommends that companies strive for equal gender distribution. The Finnish corporate govern ance code

Women in the Boardroom – Why Europe is winning the raceACHIEVING DIVERSITY IN THE BOARDROOM IS A FUNDAMENTAL CHALLENGE TO ALL COMPANIES GLOBALLY. OUTSIDE OF EUROPE, THE PATH TO INCREASING DIVERSITY IN THE BOARDROOM IS UNDENIABLY SLOW, REPORTS MARISSA BLANKENSHIP.

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Marissa BlankenshipESG Analyst, London

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recommends the both genders should be represent ed on the board and companies that fail must explain why.

In the UK, the balanced boards’ voluntary approach has resulted that 20.7% of board directors are women at FTSE 100 companies as of March 2014. The UK differs from Europe in its push for women on boards as the Department of Business, Innovation & Skills (BIS), which is the UK department for economic growth, instituted the target programme in 2011. While it is not completely free from political pressure, it is driven from the perspective that women on boards make good business sense. In order to reach the 25% target, less than 50 new appointments need to be made to FTSE 100 boards by the end of 2015.3

The laggards - The United States, Japan, India, and Brazil to name a few

Generally perceived to be behind its Euro-pean competitors on all areas environ-ment al, social, or governance related, the United States is in favour of voluntary change, collective engagement or investor pressure. Three major road blocks for women to reach the boardroom exist in the form of the high number of combined Chair/CEO roles, large number of non-executive directors, and variable board

Women in the Boardroom/section 4

Figure 1: Female board representation by country (2011-2013)

0%

10%

20%

30%

40%

50%

Norw

ay

Fran

ce

Swed

en

Neth

erla

nds

Germ

any

Italy

Cana

da

Unite

d St

ates

Unite

d Ki

ngdo

m

Aust

ralia

Indi

a

Braz

il

Japa

n

Kore

a

2013 2012 2011

Source: Glass Lewis.

tenure resulting in fewer turnovers in board seats.

The biggest obstacle is the combined role of Chair and CEO. Institutional Shareholder Services (ISS) has analysed Annual General Meetings (AGMs) from 2011-2014 with data on 39,000 public companies and has found that there are 4,405 separate companies with a combined CEO and Chair. Of these companies, 62.5% or 2,754 companies are in the United States and only 2.8% or 78 companies are chaired by women. Figure 1 above further demonstrates that this type of governance structure leads to restrictive growth for women not only in the United States but also in other countries including the United Kingdom, Brazil, Canada and South Korea.

Japan – just off the blocks

Japan’s statistics are dismal and indicate that change has not been a priority for

companies or shareholders. Of a sample of 447 companies, Japan only has 1.1% female directors meaning that less than five women serve on boards. In 2013 there were not any shareholder resolutions relating to board diversity yet 21% of governance resolutions were related to appointing more outside directors or outside chairmen.4

It is curious that Japan has finally sought to address this issue with the launch of the Japan Stewardship Code in February 2014. However, the code is not progressive enough and even though Prime Minister Abe has urged companies to promote more women to executive roles, the language dictates that business leaders set a target of appointing at least one female executive at each company. This is obviously an enormous task but still falls far short of what it will take to achieve balance both in language and action.

India – Family matters

Japan could be at serious risk of falling into the same trap which is plaguing India. India currently sits at the lowest position among st its emerging market peers with women occupying 4.7% of board seats. Despite heavy corporate lobbying against a quota system, India passed the Companies Bill in December 2012 with the require ment that public companies must have at least one woman director in place by October 2014. This was enacted to improve upon the low level of women on boards with only 40% of companies on the National Stock Exchange having at least one woman director.

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Positive change has resulted from a combination of quotas, voluntary targets, corporate governance codes and shareholder activism.

“

“Figure 2: Percentage of women on the board where the CEO/chair are combined as of March 2014 (number of companies in parenthesis)

France (160)

Spain (51)

Italy (36)

Hong Kong (142)

China (34)

USA (2,754)

UK (72)

Brazil (44)

Canada (751)

S. Korea (112)

0% 20% 40% 60% 80% 100%

0 Women

1 Women

2 Women

3 Women

4 Women

5 Women

6 Women

10% 19%

22% 37%

31% 42%

44% 35%

44% 44%

45% 31%

71% 19%

73% 18%

77% 18%

88% 12%

Source: ISS.

Figure 3: Percentage of women on the board in emerging markets (March 2014)

0.0%

5.0%

10.0%

15.0%

20.0%

SouthAfrica

Turkey China Brazil Indonesia Mexico Russia India

Source: Catalyst.org.

The catch here is that the one woman director does not need to be independent and in order to comply with the deadline of October 2014; companies have started to add women to their boards who do not bring expertise or have the necessary qualifications. The most recent blatant violation of the spirit of the law comes from Reliance Industries where the chairman Mukesh Ambani has just named his wife to the board in order to meet the deadline.

Brazil – BOVESPA Bust?

In a much different light to Japan and India’s tokenism, Brazil’s lack of diversity planning almost appears to be an oversight. The BM&FBOVESPA stock exchange has been praised globally for its forward thinking and for promoting the business case for sustainability through the creation of the Novo Mercado in December 2000. The Novo Mercado is the elite listing board only accessible to companies meeting a set of voluntary best practice guidelines on corporate governance which are more rigid than current legislation requires.

However, these best practices do not include a provision for diversity. In fact, Brazil still has very low levels of women directors being proposed to boards and there is an absence of recommendations or regulation on how to move diversity

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forward. The Senate has discussed a compulsory quota of 40% but only for state-owned or mixed capital companies with compliance by 2022. There is clearly room for voluntary reform by adding additional guidelines to the Novo Mercado which currently has 165 companies in compliance.5

Conclusion

The race to increase diversity is indeed two separate competitions. Europe is running a marathon, committed for the long term while the rest of the world is running a sprint either setting up policies likely to have a short life span or not starting the race at all.

The lack of success in increasing diversity is not completely down to governments how-ever. Companies need evidence that board diversity is essential to improving long-

term corporate performance in order to act. Active shareholders are one way in which investors can vote and influence what they believe is best for optimising performance but this needs to be a wide-spread and concerted effort amongst investors.

In order for the world to converge on this issue, a top down voluntary framework by governments and a bottom-up approach from investors may be the most practical way to encourage companies to place qualified and committed women on boards. Governments and companies that are slow to change will miss opportunities and are likely to be subject to greater risk from a lack of diversity. Furthermore, companies need to communicate and share best practices with other companies on what has changed and why action to

make the boardroom look like modern society is a valuable culture shift.

1 Keantinge, Courteney and David Eaton, “Mind the Gap, Board Gender Diversity in 2013,” Glass Lewis & Co. 2014.

2 http://www.catalyst.org/knowledge/women-boards.

3 https://www.gov.uk/government/publications/women-on-boards-2014-third-annual-review.

4 Keatinge, Courteney and David Eaton, “Shareholder Proposals, An Overview of the 2013 Proxy Season,” Glass Lewis & Co., 2013.

5 http://www.bmfbovespa.com.br/en-us/markets/equities/companies/corporate-governance.aspx?Idioma=en-us.

Women in the Boardroom/section 4

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Closing the environmental investment gap

In order to limit global warming to two degrees, according to the International Energy Agency, investments in low-carbon energy technologies will need to at least double, reaching US$500bn annually by 2020 and then double again to US$1trn by 20301.

There is already an international consensus on the fact that transitioning to a low-carbon and climate resilient economy will require significant investment. However, the funding largely exceeds the capability of the public sector. Indeed, one of the major barriers to the deployment of technologies that would significantly increase energy efficiency, reduce carbon emissions and provide other environmental benefits is lack of capital: corporates,

Green bonds /section 5

Fixed returns to fix the planet? Putting ‘green’ bonds at the helm of environmental financingTHE ENVIRONMENTALLY FRIENDLY FIXED-INCOME MARKET IS IN ITS INFANCY, BUT AS THE GREEN BOND TREND GAINS MOMENTUM IT MAY BE A SIGN OF THINGS TO COME, WRITES ANGE-WILFRIED EZOUA.

Ange-Wilfried EzouaProxy Voting Officer,Paris

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infrastructures and other projects have reduced access to traditional finance given the financial crisis effect on the global financial sector. This is a Herculean funding challenge of environmental initiatives which lie ahead, but the truth is that governments lack the financial resources to meet current and future requirements. The natural solution is to attract private sector investment and debt capital markets represent a key pool of assets that must be tapped – that’s where an innovative funding stream is starting to make a difference; welcome to the concept of Green bonds.

One color, different shades

Green bonds are fixed-income securities issued by governments, supranational institutions or corporations in order to raise capital that is used exclusively to support projects with specific environmental benefits. They can be asset-backed securities tied to specific green infrastructure projects or plain vanilla treasury-style bonds issued to raise capital that will be allocated across a portfolio of green projects. They don’t expose holders to any specific risk related to funded projects and are issued with the same yield and risk as the issuer’s traditional bonds.

There is some debate on defining exactly what green really is, but beyond these differences issuers and investors have converged on a set of products they agree can constitute an emerging space. Within this scope, one can find projects based on their contribution to emissions mitigation, which might include a variety of investments in, for instance, energy efficiency retrofitting, alternative energy or transit infrastructure, or business development for green technologies, which have the intended impact. But others may define the concept of being green as being beyond emissions mitigation, and include issues such as conservation and sustainable agriculture.

The great quest for the universally accepted green bond definition picked up steam this year with the introduction of the Green Bonds Principles in early 2014 by a coalition of leading investment banks including Merrill Lynch, Goldman Sachs and HSBC. They outline a voluntary process that aids issuers launch credible green bonds, ensure investors had the necessary information to evaluate the environmental impact of their investments and assist underwriters by moving towards standardized disclosure requirements.

“Now it’s up to the market to determine how green an issuer’s green bond is” said Marilyn Ceci, Managing Director at JPMorgan, who co-authored these Principles. The market reacted positively as the Principles are likely to drive volume, but their implementation would need to be clearly monitored to see if issuers meet the expectations they have established.

Market at a glance

Seven years after being developed by the World Bank and the European Investment Bank, a record US$16.6bn of green bonds have been issued to-date in 2014, vs. US$10.9bn last year2.

At the last World Economic Forum in Davos, World Bank Group President Jim Yong Kim called for a doubling of the global market for green bonds to US$20bn by September 2014.

Issuance has begun to spread from supranational organizations. With growing investor demand, there is also growing numbers of issuers setting up programs to meet the demand, ranging from development banks to local authorities, corporates and utilities: the Commonwealth of Massachusetts even issued the first municipal green bond last year, while the largest green bonds to date was issued by a corporate, GDF Suez, which printed a US$3.4bn transaction that smashed the US$1.9bn previous record set by Electricite de France.

Green bonds/section 5

The Green Bond Principles recognize several broad categories of potential eligible green bonds. The main use of proceeds categories include:

• Renewable energy.

• Energy efficiency (including efficient buildings).

• Sustainable waste management.

• Sustainable land use (including sustainable forestry and agriculture).

• Biodiversity conservation.

• Clean transportation.

• Clean water and/or drinking water.

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The Climate Bond Initiative, a UK-based not-for-profit working at mobilizing the bond market for climate change solutions, made a first estimate of the global bond market size linked to key climate change themes. It found a US$346bn outstanding universe where low-carbon transport and energy sectors account for the bulk of issuance3. There is the potential to fund a variety of projects outside of a common conception of climate projects, matching investor demand for both refinancing of existing assets and new assets.

Keep in mind that whatever the actual market size is, it is probably growing rapidly. The multiple issues and reissues by institutions suggest that both the issuers and investors are generally satisfied with green bonds as an investment vehicle, while common oversubscription is indicative of growth in demand among investors and increased confidence in the products by issuers.

The appeal for institutional investors

For investors concerned about climate change, the opportunity to invest in bonds that meet their existing yield and risk requirements

while also addressing green issues is generally seen as attractive. Internationally, this investor pool is large.

Institutional investors – such as pension funds, mutual funds, insurance companies and sovereign wealth funds – fear the risks of environmental issues that increase uncertainty and as such need to be proactively managed. This leads to greater integration of environmental, social and governance (ESG) issues into investment decision-making to signal commitment to stakeholders ranging from policymakers to clients. Therefore they appear as the natural market for high-quality-credit, green bond investment

All stakeholders should have an eye on green bonds evolution, in the hope that they lead to a new era of environmental financing.

“ “

24

opportunities. The interest for these bonds goes well beyond the scope of responsible investors. Not so much because they are green, but because they position themselves as long-term financial instruments with inflation protection and providing attractive returns that match their long-term liabilities, as any regular bond.

Green bonds also appeal to retail investors, albeit on a much smaller scale. Households may not be directly managing these funds, but they can raise their voice and set guidelines for the institutional investors who manage their wealth. The World Bank has already targeted this market with green bonds tailored for Japanese individual investors on the Uridashi bond market.

Whereas institutional investors initially played the main role in the early days of supranational issuance, that has changed over the past year and investment managers have now taken over as the market’s largest investor group.

Why painting bonds in green?

Bonds are ideal for financing the long-term environmental infrastructures required to build a low-carbon, climate resilient economy. They can provide a constant stream of capital over long term periods, allowing projects on a large scale to be launched and kept afloat before they become profitable; while also giving

investors the long-term returns that they are looking for and fulfilling their desire to improve their green credentials.

As growing consciousness of environment and reputation enhancement become investment criteria, this is a remarkable opportunity for green bonds to capture significant amounts of capital from the international bond market, valued at around US$100trn4. It suggests a competitive advantage for green bonds over traditional ones coming from the satisfaction of knowing investment proceeds will be used in a positive manner.

Furthermore, investors are extending the integration of sustainability factors beyond listed equities into other asset classes, creating appetite for bonds linked to climate change. Green bonds allow investors’ money to be directly invested in environment-friendly projects rather than a whole company. This is quite an advantage given that company-level equity metrics such as ESG scores have limited ability to determine what a bond is financing and whether it has an environmental impact.

Then investors can easily integrate environmental initiatives into their portfolios, notably with a structure identical to traditional treasury-style bonds. This means green bonds can fit into existing asset structures and boost environmental responsibility profiles without requiring additional effort.

First things first, get standards! Investors need to be assured that green bond funds are genuinely being invested in green assets. That will depend on clear and coherent definitions of green and on verification and monitoring systems being in place. Until now, issuers have been well-known, trusted names, but as the market grows one expects the third-party certification to become the norm. The hope is that once standards are in place and

Figure 1: Historical green bond issuance (US$bn)

Cumulative amount outstanding

Issued per year

0

10

20

30

40

50

60

2007 2008 2009 2010 2011 2012 2013 2014

Source: Bloomberg New Energy Finance - Green Bonds Market Outlook 2014 - As of June 2014.

Figure 2: Disclosed use of proceeds by bank (US$Bn)

World Bank (IFC & IBRD)

African Development Bank (AfDB)

0

10

20

30

40

Climatechange

Energyefficiency

Forestry Renewableenergy

Trans-mission

Transport Water

European Investment Bank (EIB)

Source: Bloomberg New Energy Finance - Green Bonds Market Outlook 2014 - As of June 2014.

Green bonds/section 5

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broadly endorsed, investors can be assured that green bonds from the private sector really are green and not just “green washed,” that part of the market will get a boost.

The way the green bond market is defined impacts the types of projects supported and the ability of the instrument to narrow the environmental investment gap. These standards would de facto help to consolidate the market by identifying unlabelled bonds for projects that are not specifically tagged as green but which qualify as such since they have a beneficial impact on environment – therefore enabling market liquidity.

To succeed in providing the massive amounts of financing required green bonds will have to participate in leveraging the power of the market by targeting the majority of investors, profit could be the incentive bringing investors to the table. Institutional investors have a responsibility to clients meaning that the top priority is to maximize their risk-adjusted returns. If it is in their financial interests to go green, they will do so, but only to the degree that stakeholder pressure and profitability concerns dictate. Hopefully, green bond issuances to-date demonstrate that investors do not have to sacrifice yield to invest in assets and projects that support climate change mitigation and adaptation efforts.

The development of this new market demonstrates that this is truly a green bonds ecosystem that is emerging around this market. As evidence, the launch in March 2014 of the first index to offer exposure to green bonds, the “Solactive Green Bond” index should improve access for passive and small investors, should open up development opportunities for ETFs and structured products using the index as the underlying for a capital-return product in order to

maintain the green theme throughout the whole structure of a product.

Finally, Governments can help setting in place policy and regulatory frameworks that provide guarantees, tax incentives, a secure environment for environmental initiatives and support public/private issuance of green bonds that lead to market development.

Bottom line

The green bond market seems poised to accelerate in growth as an attractive theme bond to investors looking for secure returns in a time of volatile equity markets.

Time will help in building a robust track record required to support the creditworthiness of potential bonds and attract mainstream institutional capital.

All stakeholders should have an eye on green bonds evolution, in the hope that they lead to a new era of environmental financing. The best is yet to come.

1 Energy Technology Perspectives 2012 – International Energy Agency.2 Green Bonds market outlook 2014 – Bloomberg new energy finance. 3 Bonds and Climate change state of the market in 2013 – Climate

Bond Initiative and HSBC.4 Bond Markets 2012 - TheCityUK.

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AllianzGI and ESG /

section 6

Allianz Global Investors and ESG

At Allianz Global Investors, we have a long-standing commitment towards sustain-ability, dating back to 1999, recognizing that sustainability issues have the potential to materially impact the performance of our investee companies. Our commitment to sustainability is integrated with the work of our parent company, Allianz SE, with whom we jointly run a Group ESG Board.

The importance of sustainability to Allianz Global Investors is demonstrated through our:

• Dedicated ESG team. Allianz Global Investors maintains a team of 10 ESG specialists who are wholly committed to providing proprietary ESG research and supporting our proxy voting activities. This team has been in place since 2000.

• Holistic approach. We believe in an integrated approach with involvement

upstream, through involvement in industry-wide initiatives, and downstream, through individual company engagement. This involve-ment complements our proprietary security-specific ESG research to form the cornerstone of our ESG proposition.

• Dedicated ESG strategies. We operate dedicated SRI (sustainable and responsible investment) strategies across the asset class spectrum, including equity, fixed income, multi-asset and money market funds, with combined assets under management or advisement of over EUR 23 billion.

What we do

We believe that the analysis of ESG factors provides vital input in analysing potential security-specific investment risks. Our

commitment to fundamental analysis is underlined by the importance we place on sustainability criteria. We believe that through consideration of sustainability criteria, our clients will be rewarded with enhanced investment performance, while also contributing to creating a more stable, sustainable market and society. As such, all our investment staff have access to our ESG research through our proprietary research database.

In order to add true and lasting value, we are committed to engaging on ESG issues across the entire investment process, from industry-wide initiatives through to company research and engagement. This holistic approach aims to support our core business purpose of generating long-term returns for our clients, and is fully aligned with our commitment as signatories to the UN Principles for Responsible Investment.

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We seek to integrate ESG considerations into the investment process in the following ways:

• Upstream: participating in corporate or multi-stakeholder initiatives and investor networks to bring about more sustainable government policies, financial markets and corporate practices.

• Investing: identifying and understand-ing, through proprietary research, the financial impact of ESG factors on investments and acting on this in our investment decisions.

• Downstream: demonstrating active share ownership for improved corporate governance and ESG performance of investee companies through proxy voting and engage-ment.

ESG Matters

ESG Matters is the flagship publication of our ESG team. Here, we draw on the insight of our ESG team in an attempt to highlight some of the most topical ESG trends of the quarter.

Our team

As mentioned, we maintain a Global ESG team consisting of 10 dedicated ESG analysts, some of whom also have overlapping proxy voting responsibilities. The team was founded in 1999 and is jointly led by Bozena Jankowska, who is primarily responsible for ESG research, and David Diamond, who is primarily responsible for engagement and proxy voting.

Each analyst on the team specialises in a specific sector recognizing the different

ESG characteristics of different sectors. In practice, this means they have the in-depth knowledge necessary to identify and track key ESG matters impacting the issuers in their sectors. This approach also ensures we are not overly reliant on external research providers and sell-side brokers, enabling us to generate independent and differentiated insights into ESG topics ahead of the market.

With ESG analysts based in London, Paris, San Francisco and Hong Kong, the Global ESG team’s global footprint allows us to examine ESG factors from a regional as well as a sector-specific perspective, accounting for cultural ESG differences.

In turn, these geographical and sector-specific insights feed into our holistic ESG approach, influencing our research, engagement approach and also our positions on ESG initiatives.

Global ESG team

ESG Research Engagement** and Proxy Voting

Jeremy Kent, CFAAnalystLondon

David DiamondGlobal Co-Head of ESGEngagement and Proxy Voting

Bozena Jankowska*Global Co-Head of ESGESG Research

* Partial Proxy Voting responsibilities. **ESG Research also responsible for implementing AllianzGI’s engagement strategy. Source: AllianzGI, as at 30 June 2014.

Marissa BlankenshipAnalystLondon

Marie-Sybille ConnanAnalystParis

Mathilde MoulinAnalystParis

Verity Chegar*AnalystSan Francisco

Ioannis PapassavvasEuropean Proxy Voting OfficerFrankfurt

Henrike Kulmann*AnalystHong Kong

Rainer Sauer*European Proxy Voting OfficerFrankfurt

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Please find below biographies of the contributors to this edition of ESG Matters:

Bozena Jankowska Global Co-Head of ESG

Bozena Jankowska is based in London and is responsible for running ESG research globally. This involves the ongoing evolution of Allianz Global Investors’ ESG research and thought leadership relating to strategy and process at a global level. Bozena is Chair of the UKSIF Analyst Committee and also sits on the UKSIF Leadership Committee. She also represents Allianz Global Investors on the Cambridge Sustainability Leaders Investment Leader ship Group (ILG) programme.

Henrike Kulmann ESG Analyst

Henrike Kulmann is an ESG analyst with Allianz Global Investors, which she joined in 2011. She is a member of the Asia Pacific Environmental, Social and Governance (ESG) research team and is responsible for ESG stock analysis, engagement and proxy voting. Ms. Kulmann has three years of investment-industry experience and six years of overall experience in the ESG field. She previously worked at Deutsche Post DHL in environmental-strategy manage-ment and corporate-responsibility evalua-tion. Ms. Kulmann has an M.A. in political science, with a focus on business communication and economics, from Friedrich Schiller University of Jena, Germany.

Marissa Blankenship ESG Analyst

Marissa Blankenship is an ESG analyst with Allianz Global Investors, which she joined in 2011. As a member of the firm’s Environmental, Social and Governance (ESG) team, she is responsible for conducting sustainability research on the financial sector. Marissa has 13 years of investment-industry experience. Before joining the firm, she worked as an associate in the equity-strategies group at Hall Capital Management. Ms. Blankenship also conducted sustainability research on a wide range of sectors, companies and funds at Truestone Impact Investment Management and Incofin Investment Management. She has a B.S. in economics from the University of California, Davis and a master’s in Latin American economic development from the University of London. Marissa holds the IMC designation.

Jeremy Kent ESG Analyst

Jeremy serves as back-up portfolio manager for the Global Sustainability strategy and is an ESG analyst responsible for covering Industrials. Jeremy joined AllianzGI in 2008 through the graduate programme, starting an 18 month rotation of roles within the company which include investment management and research analysis. Jeremy graduated from California State University in 2007 with a BA in Entrepreneurial Management. Jeremy is a CFA charterholder and holds the IMC designation.

AllianzGI and ESG/section 6

Biographies

Ange-Wilfried Ezoua Proxy Voting Officer

Ange-Wilfried Ezoua serves as Proxy Voting Officer with Allianz Global Investors, which he joined in 2013. As a corporate governance specialist, Ange works on policy develop-ment and process management for proxy voting on behalf of the firm and its clients, and, engagement with French issuers with a focus on governance-related themes. Prior to this role, he gained experience in listed equity investment strategies and investment advisory services. Ange holds an MSc in Financial Markets from Toulouse Business School, France.

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Disclaimer

Investing involves risk. The value of an investment and the income from it will fluctuate and investors may not get back the principal invested. Past performance is not indicative of future performance. This is a marketing communication. It is for informational purposes only. This document does not constitute investment advice or a recommendation to buy, sell or hold any security and shall not be deemed an offer to sell or a solicitation of an offer to buy any security.

The views and opinions expressed herein, which are subject to change without notice, are those of the issuer or its affiliated companies at the time of publication. Certain data used are derived from various sources believed to be reliable, but the accuracy or completeness of the data is not guaranteed and no liability is assumed for any direct or consequential losses arising from their use. The duplication, publication, extraction or transmission of the contents, irrespective of the form, is not permitted.

This material has not been reviewed by any regulatory authorities. In mainland China, it is used only as supporting material to the offshore investment products offered by commercial banks under the Qualified Domestic Institutional Investors scheme pursuant to applicable rules and regulations.

This document is being distributed by the following Allianz Global Investors companies: Allianz Global Investors U.S. LLC, an investment adviser registered with the U.S. Securities and Exchange Commission (SEC); Allianz Global Investors Europe GmbH, an investment company in Germany, authorized by the German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin); Allianz Global Investors Hong Kong Ltd. and RCM Asia Pacific Ltd., licensed by the Hong Kong Securities and Futures Commission; Allianz Global Investors Singapore Ltd., regulated by the Monetary Authority of Singapore [Company Registration No. 199907169Z]; and Allianz Global Investors Japan Co., Ltd., registered in Japan as a Financial Instruments Business Operator; Allianz Global Investors Korea Ltd., licensed by the Korea Financial Services Commission; and Allianz Global Investors Taiwan Ltd., licensed by Financial Supervisory Commission in Taiwan.


Allianz Global Investors Europe GmbH, UK Branch199 BishopsgateLondonEC2M 3TYwww. allianzgi.co.uk

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