ESG Investing

PIMCO is committed to the integration of Environmental, Social and Governance (ESG) factors in our investment process and developing innovative ESG solutions for clients.

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ESG Integration

PIMCO has been managing socially responsible strategies since 1991 and since 2011 has been taking steps to incorporate ESG analysis in the firm’s investment process. ESG factors are now fully integrated in our assessment of corporate and sovereign risk, which is a key part of our active portfolio construction process.

PIMCO ESG Platform

In 2017 PIMCO launched a range of dedicated ESG strategies combining ESG-focused portfolio construction with active engagement and transparent reporting. Our ESG strategies are founded on the belief that it’s possible to achieve both attractive financial returns and positive impact.

Targeting Performance and Positive Change

Exclude

Restrict investment in issuers fundamentally misaligned with sustainability practices

Examples of exclusions

  • Controversial weapons
  • Tobacco
  • Pornography
  • Coal

Evaluate

Emphasize best-in-class ESG issuers and prime ESG engagement candidates in portfolio construction

Attributes of best-in-class issuers

  • Good environmental practices
  • Strong corporate governance
  • Industry-leading social policies

Engage

Engage collaboratively with issuers to change ESG-related business practices

Sample engagement questions

  • Are you developing a framework for climate risk reporting?
  • What is your policy on parental leave?
  • Do you have a culture and conduct committee?

Engagement & Impact

Within PIMCO’s dedicated ESG strategies, we focus on identifying and engaging with companies that have the ability and willingness to improve ESG-related business practices. We believe that successful engagement has the potential to lower credit risk, unlock value and influence change.

In 2017 we contacted 120 corporate issuers through our ESG engagement program

Overall response rate

Engagement activity by region

Engagement activity by topic

SOURCE: PIMCO as of 31 December 2017. In 2017 PIMCO contacted 120 corporate issuers and received detailed responses from 83 companies. Charts based on the percentage of companies contacted by region and the percentage of engagement questions by topic..

Investment Options

PIMCO manages a range of ESG-focused mutual funds and separate accounts. For further information on separate accounts please contact your PIMCO representative.

Disclosures

A word about risk: All investments contain risk and may lose value. There is no guarantee that socially responsible investing (SRI) products or strategies will produce returns similar to traditional investments. 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 the current low interest rate environment increases this risk. Current 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. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested.

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. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.