Publisher: Facing Finance
Funded by: Swedish International Development Cooperation Agency (Sida)
Germany’s leading insurer invests in a number of controversial companies through its subsidiary Allianz Global Investors. How do such investments fit in with Allianz’s self-perception?
Allianz is one of the largest insurance companies in the world. The group manages 1.6 trillion euros for its customers, including its own investments, the funds amounted to 2.2 trillion euros. A considerable amount that has to be invested. What only becomes clear at second glance is that different units of the group also act differently. Different investment guidelines apply to the Group’s own investments than to the management of client funds. The Fair Finance Guide has analysed the guidelines for the group’s own investments and found some significant weaknesses (e.g. in the area of nature conservation, gender or taxes). Allianz Global Investors (AGI), one of the group’s asset managers along with Pimco, offers sustainability-oriented clients several investment strategies that are subject to social-ecological criteria. However, the corresponding investments amount to only 158 billion euros. The rest of the 563 billion euros that AGI manages are invested conventionally. With the exception of landmines and cluster munitions, AGI has not defined any exclusions that apply to all investments.
It is therefore not surprising that controversial companies can still be found in AGI’s portfolio. For a sample that included about 100 companies, we found holdings worth €10.8 billion (as of 30.09.2020), including defence, coal and mining companies.
AGI sees itself as an active investor, exercising its voting rights at portfolio companies’ AGMs and engaging in exchanges on ESG issues with selected companies.
Upon request, AGI stated (translation follows):
“Our core belief is that you have to address the problems of the present to positively shape the future. That is why our path-oriented approach focuses on actively engaging with companies to help them follow a path towards more sustainable business practices. Excluding companies is our tool of choice only for a few topics. Rather, we want to contribute to a just and inclusive transition to a sustainable economy.
We cast our votes at over 9000 AGMs in 2019 in the best interests of our investors. We have engaged in purposeful dialogue with 333 companies, and this dialogue will remain a high priority in the future.”
In our view, AGI lacks transparency above all else. The results of the votes at the AGMs are accessible, which is positive. However, if AGI relies so heavily on dialogue with portfolio companies, details of these processes should be made public. It is unclear which companies are involved – which goals were pursued in which time frame and what the results were. Moreover, AGI’s current sustainability reports do not allow us to conclude whether even one of these dialogue processes was deemed unsuccessful – and what the consequence would then have been.
Finally, the Allianz Group’s own investments are also partly managed by AGI. Internal control processes are designed to ensure that the investments comply with Allianz Group guidelines. However, as there is a lack of transparency here as well, it cannot be traced from the outside whether Allianz Group funds are not flowing into critical companies via Allianz Global Investors’ investments.