PRI German Network meeting: Allianz’s Ralph renews call for ESG criteria in main indices

This year’s meeting of the German network for the Principles for Responsible Investment (PRI) was held at Munich-based German insurance/asset management giant Allianz, one of the country’s first signatories to the charter.

Close to 40 German PRI signatories, among them pension funds, asset managers and consultants, attended the meeting, whose purpose was to learn about what the PRI has been doing since last year’s gathering and to discuss ways to further promote the movement in Germany. Attending the meeting on the PRI’s behalf were Yann Gindre, the newly appointed Director of Networks & Global Outreach; Alyssa Heath, Senior Manager for Reporting & Assessment; and Dustin Neuneyer, European Network Manager.

The meeting was opened by Jay Ralph, Head of Allianz Asset Management (near €2trn under management), who recounted how Allianz became committed to sustainability. Ralph said the story really began in May 2012, when, during its annual general meeting (AGM) several NGOs slammed Allianz for doing business with coal and investing in foodstuffs.

“We (the management) were shocked by the criticism, as we always thought we were the good guys. Some of our business units had signed up to the PRI by that point and we were doing business in the renewable industry,” said Ralph. “But then we recognised that we could take some of the criticism on board and I suggested to our Chief Executive Michael Diekmann that we do more on this front.”

Diekmann agreed, and in the months after its 2012 AGM, Allianz created an “ESG Board” made up of Ralph, Chief Financial Officer Maximillian Zimmer and Clement Booth, Allianz’s Chief Administrative Officer, to coordinate the implementation of sustainable principles in asset management and insurance underwriting.All Allianz business units, including US bond specialists PIMCO, joined the PRI and Allianz also became a signatory to the Principles for Sustainable Insurance (PSI). Moreover, the Munich-based firm has emerged as one of Europe’s biggest investors in renewable energy, with a portfolio worth close to €2bn.

Convinced that sustainable investing is not only the right thing to do ethically speaking but with respect to risks, Ralph wants the movement to become part of the mainstream. In December 2013, he wrote an article for the German business daily Handelsblatt urging index providers to integrate ESG criteria in their benchmark products, whether the S&P 500, the MSCI World or the FTSE100. Almost a year later, Ralph explained how his firm has met with the likes of MSCI and Barclays to press for the idea.

The meeting continued with a presentation by Yann Gindre, who told the audience that following a record number of new signatories this past year, the PRI now represented investors and asset managers with more than $45trn in assets. Other highlights Gindre mentioned were the Montreal Carbon Pledge, a carbon footprint disclosure initiative that has attracted investors with $500bn in assets and the PRI’s new governance structure.

Regarding the latter issue, Gindre said he expected the new structure – which calls for a unified PRI Association Board instead of, as now, a separate Council and Board – to be in place by April 1, 2015.

Gindre also said that on April 1, 2015, two new network and outreach specialists would start working for the PRI in its New York office. With the new hires, the PRI hopes to get more investors and asset managers in the US to join the organisation.