Text on screen: PIMCO
Text on screen: Christian Stracke, President, Global Head of Credit research
Stracke: At PIMCO, we have a robust set of proprietary tools and frameworks that we use in deploying capital in sustainable investing, making sure that we see the degree to which issuers, companies are aligned with sustainable development goals, the 17 SDGs.
Power: I mean, I would add that the SDGs are global goals meant to apply to countries and economies everywhere. So both developed and developing markets.
Text on screen: Gavin Power, Sustainable Development and Internal Affairs
In terms of engagement, we're pleased to hold leadership seats in a number of international initiatives.
The global investors for the SDGs, the CFO Coalition for the SDGs, which Christian co-chairs and the Principles Responsible Investment or PRI and all of these programs are designed to mobilize private sector capital at scale towards the SDGs.
Stracke: PIMCO's influence in the sustainable bond market is considerable. We are one of the largest fixed income managers in the world.
Text on screen: We believe active management is the responsible way to invest
Images on screen: PIMCO building and trade floor
We believe that active management is the responsible way to invest and we see sustainability as a key part of active management. We also see our clients increasingly looking for sustainability aligned investing to help them to secure progress on the path to the SDGs, but also to the Paris Accord goals and with that in mind, we have a strong commitment to be a key part of enhancing the growth and robustness of sustainable finance.
Power: I agree, this is a very exciting area and indeed asset class. Related, we continue to see the development of new tools and resources to assist both issuers and investors in terms of SDG investing.
Text on screen: TITLE - PIMCO’s guidance for sustainable investing through key industry partnershipsThe International Capital Markets Association (ICMA), Global Investors for Sustainable Development (GISD), Organization for Economic Co-operation and Development (OECD)
Here, I would reference the trade body ICMA, where we support their general market standards and norms as well.
We have our own PIMCO bond guidance and are working with groups like GISD and the OECD to develop new tools and standards for the market.
Stracke: Recently around the UN General Assembly, PIMCO participated in a very exciting forum on sustainability finance, where we gathered a number of different issuers, market practitioners, as well as people from the United Nations and other bodies, that all of which are interested in developing sustainable finance.
Power: Another recent event was the PRI's annual conference in Tokyo in early October, where 2000 investor delegates attended. We were pleased to lead a session there on
Text on screen: SDG investing areas of interest include renewable energy and social thematics
Images on screen: Windmills, food bank
SDG investing. Areas of interest included renewable energy, but also some of the social thematics, including decent work, gender and food security.
Looking forward, the UN Climate Conference in Dubai could be a quite consequential event and summit. This will feature the world's first global stock taking in terms of where
Images on screen: European Union building
governments are progressing or not progressing in relation to the Paris commitments. I think it's important to stress over that where governments maybe lagging, the private sector is actually leading in many respects in terms of commitments towards the energy transition.
Images on screen: Windmills, solar farm, hydropower plant
We look forward to exciting conversations in Dubai in areas such as renewable energy, science-based targets and carbon markets.
Text on screen: For more insights and information, visit pimco.com
Text on screen: PIMCO
Please note that this video contains the opinions of the manager as of the date recorded, and may not have been updated to reflect real time market developments. All opinions are subject to change without notice.
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 with the goal of enhancing our clients’ risk-adjusted returns. Relevant factors may include, but are not limited to: climate change risks, resource efficiency, natural capital, human capital management, human rights, regulatory risks, and reputation risk at an issuer. Further information is available in PIMCO’s Sustainable Investment Policy Statement.
With respect to comingled funds with sustainability strategies and guidelines (“funds that follow sustainability strategies and guidelines”), we have built on PIMCO’s over 50-year core investment processes, while actively incorporating sustainability principles. Through these guiding principles—excluding issuers fundamentally misaligned with sustainability factors, evaluating issuers using proprietary and independent ESG scoring (in addition to externally sourced and internally developed criteria), and engaging with issuers on ESG-related topics with the objective of improving investment outcomes - funds that follow sustainability strategies and guidelines seek to deliver attractive returns while also pursing to provide a vehicle through which investors can meet their sustainability preferences. Please see each fund that follows sustainability strategies and guidelines prospectus for more detailed information related to its investment objectives, investment strategies and approach to ESG.
All investments contain risk. 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. 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.
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