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We believe the size of bond markets and recurring nature of debt issuance make fixed income investors a meaningful force in driving sustainable change.
Find sustainable fixed income strategies with PIMCO's range of ESG investing funds.
Time tested: Our active ESG investment process takes the same rigorous approach applied to all PIMCO portfolios a step further by also pursuing sustainability objectives.
A+ PRI Ratings (2018, 2019, and 2020): PIMCO is committed to the integration of ESG factors in our investment process and we scored A+ across all Fixed Income categories in our Annual UNPRI Assessment Report.Footnote1
Sustainable Investment Assets under managementFootnote2
of holdings of corporate bond issuers engaged on ESGFootnote3
PRI Assessment Score (2018, 2019, and 2020) across all Fixed Income categoriesFootnote1
By investing in PIMCO's GIS Climate Bond Fund as compared to the Bloomberg Global Aggregate Credit Index (EUR Hedged), your potential impact could be:
More green, social, and other impact bonds than the indexFootnote4
Reduction in carbon intensity compared to the indexFootnote5
Renewable energy-based utilities sector holdingsFootnote6
Engagement with corporate issuers in the FundFootnote7
Case studies of engagement with bond issuers, industry groups, and clients
PIMCO’s approach to considering material ESG factors in bond markets
An educational overview of the ESG Bond market including green, social, and sustainability-linked bonds
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1 UNPRI assessment report limited to asset managers signed up to the Principles for Responsible Investment (PRI) and based on how well ESG metrics are incorporated into their investment processes. UNPRI Transparency Reports are available at https://stpublic.blob.core.windows.net/pri-ra/2020/Investor/Public-TR/(Merged)_Public_Transparency_Report_PIMCO_2020.pdf . Prior to 2021, PRI assessments were awarded scores based on A+ - E scale. A+ being highest score, while E being the lowest. PRI Assessments awarded from 2021 onward are based on a scale of 1-5 Stars. 1 star being the lowest score, 5 stars being the highest. For methodology prior to 2021, please refer to: https://www.unpri.org/reporting-and-assessment/how-to-access-reported-data/3073.article#downloads. For 2021 Methodology, please refer to https://dwtyzx6upklss.cloudfront.net/Uploads/v/g/y/2021_assessmentmethodology_jan_2021_403875.pdf.return to content↩
2 Sustainable Investment AUM includes third party and Allianz Socially Responsible AUM (negative screened portfolios), ESG AUM (portfolios with ESG objectives) and thematic AUM. $ referenced above is in USD.return to content↩
3 Calculated as % by par-adjusted Firm AUM. Corporate issuer is defined as a non-government legal entity that develops, registers and sells securities to finance its operations. The statistic relates solely to the in-depth engagement activities by PIMCO's ESG analysts.return to content↩
4 Calculated as % AUM of green, social, and other impact bonds as compared to the index. Green bonds are defined as bonds with use-of-proceeds devoted to environmental projects. Social bonds are defined as bonds with use-of-proceeds devoted to social projects or activities that achieve positive social outcomes and/or address a social issue. Impact bonds are defined as bonds with use-of-proceeds used to finance or re-finance a combination of green and social projects or activities. Impact bonds also include sustainability-linked bonds, which are bonds structurally linked to the issuer's achievement of climate or broader goals.return to content↩
5 Source: Carbon intensity is intended to reflect how an issuer’s greenhouse gas (GHG) emissions (expressed as tonnes of CO2 equivalent (tCO2e)) compares to its overall revenues. The carbon intensity of the securities portfolio is defined as the weighted average carbon emissions (Scope 1 + Scope 2 emissions (tCO2e))/Revenues in USD of corporate bond holdings only in the portfolio (for issuers with available data). Absolute carbon emission analysis takes the total emission per issuer into consideration. As defined by the U.S. Environmental Protection Agency (EPA), Scope 1 emissions are direct GHG emissions that occur from sources owned or controlled by a company (for example, company vehicles and facilities), and Scope 2 emissions are indirect GHG emissions from the purchase of electricity, steam, heating or cooling. Data used by PIMCO to calculate carbon intensity is (i) sourced from MSCI based on data reported by companies, a company specific model, or an industry specific model (MSCI’s methodology is available here: https://www.msci.com/index-carbon-footprint-metrics), or (ii) estimated by PIMCO for “use of proceeds” bonds not covered by MSCI. PIMCO’s estimates generally apply absolute emissions of the issuer’s parent company/companies to its subsidiaries. Green bonds issued by utility companies, however, are generally assumed at 10% of the parent company's CO2e intensity. Green bonds from Paris-aligned utility issuers (i.e., those who have represented that their current and future carbon emissions targets are consistent with the global accord to limit the global temperature rise by year 2100 to 1.5°C – 2°C above pre-industrial levels, notably based on methods validating that such targets are ‘science-based’) are treated as having zero carbon emissions and, therefore, zero carbon intensity. Paris-aligned utility issuers of sustainability bonds with use of proceeds partly (but not exclusively) dedicated to renewable energy receive 50% of the issuer’s carbon metrics (while they receive 60% if issued by a non-Paris aligned utility).return to content↩
6 Universe is based on utilities sector holdings. 100% of the fund's utilities sector exposure is in renewable energy-based utilities, calculated as % by par-adjusted AUM.return to content↩
7 Calculated as % by par-adjusted Fund AUM. The statistic relates solely to the in-depth engagement activities by PIMCO's ESG analysts.return to content↩
All investments contain risk and may lose value. Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and low interest rate environments increase this risk. Reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed.
PIMCO is committed to the integration of Environmental, Social and Governance ("ESG") factors into our broad research process and engaging with issuers on sustainability factors and our climate change investment analysis. At PIMCO, we define ESG integration as the consistent consideration of material ESG factors into our investment research process, which may include, but are not limited to, climate change risks, diversity, inclusion and social equality, regulatory risks, human capital management, and others. Further information is available in PIMCO's Environmental, Social and Governance (ESG) Investment Policy Statement.
ESG investing is qualitative and subjective by nature, and there is no guarantee that the factors utilized by PIMCO or any judgment exercised by PIMCO will reflect the opinions of any particular investor, and the factors utilized by PIMCO may differ from the factors that any particular investor considers relevant in evaluating an issuer's ESG practices. In evaluating an issuer, PIMCO is dependent upon information and data obtained through voluntary or third-party reporting that may be incomplete, inaccurate or unavailable, or present conflicting information and data with respect to an issuer, which in each case could cause PIMCO to incorrectly assess an issuer's business practices with respect to its ESG practices. Socially responsible norms differ by region, and an issuer's ESG practices or PIMCO's assessment of an issuer's ESG practices may change over time. There is no assurance that the ESG investing strategy or techniques employed will be successful. Past performance is not a guarantee or reliable indicator of future results.
PIMCO as a general matter provides services to qualified institutions, financial intermediaries and institutional investors. Individual investors should contact their own financial professional to determine the most appropriate investment options for their financial situation. This material contains the opinions of the managers and such opinions are subject to change without notice. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America L.P. in the United States and throughout the world. ©2021, PIMCO.