PIMCO has launched a dedicated global
environmental, social and governance (ESG) investment platform
and overhauled its related fund products range.
The ESG platform includes three key
elements: exclusion, evaluation and engagement. Companies with
business practices that are misaligned with sustainability
principles are excluded from PIMCO’s ESG
Companies are also evaluated on their ESG
credentials and those with the "best-in-class" ESG practices
are favoured in these solutions.
The launch of the platform coincides with
the launch of the PIMCO GIS Global Bond ESG Fund in the
The new fund invests in a range of
sovereign and investment grade global corporate bonds. It aims
to maximise total returns while investing with issuers with
favoued ESG practices.
The fund is managed by a team led by
Andrew Balls, managing director and CIO of global fixed income,
and Alex Struc, portfolio manager, co-heading the ESG
initiative at PIMCO.
"For many investors, screening out
undesirable investment categories isn’t enough
anymore - they want to use their investments to promote change
in the world," said Balls.
Additionally, PIMCO has enhanced two of
its socially responsible funds in the US to incorporate a wider
range of ESG considerations into the investment process. These
teams are managed by a team led again by Struc, and also Scott
Mather, managing director and CIO for US core strategies.
The Total Return ESG and Low Duration ESG
funds are additionally managed by Mark Kiesel and Jerome
Schneider, respectively. The funds converted on 6 January.
AXA Investment Managers announced in July that it had
designed a new smart beta equity ESG fund in a bid to allow
responsible investment, while generating long-term returns and
Approximately $90bn of "green bonds" were
issued in 2016, more than double the volume of 2015. However
HSBC expects the growth in issuance could slow to the $90bn -
$120bn mark this year, mainly due to China and also on the back
of policymakers refraining from intervening in the market.
A report by MSCI ESG Research earlier this month
set out how Asia is lagging behind Europe when it comes to
sustainable investing and stewardship, as reported by
Global Investor on 12 January. Despite six Asian
countries that have been developing stewardship codes since
2014 "the hard part starts in 2017".