PIMCO overhauls ESG effort
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
portfolios.
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 EMEA.
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 reducing risk.
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”.
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