Integration of ESG into fixed income investing set to grow
Integration of environmental, social and governance (ESG) principles into fixed income investing is gaining momentum globally, according to PIMCO.
The firm also said that bonds issued under the United Nations Sustainable Development Goals would be a key part of the fixed income market in the future, and issuers should put the ESG criteria high on their agendas.
In 2018, PIMCO engaged with 147 issuers of investments held in its ESG strategies, which translated to a 22 per cent increase over the previous year.
At the same time, the engagement issuer response rate grew to 81 per cent from 69 per cent in 2017, with Asia-Pacific recording the highest rate.
Response rates for European and North American issuers also went up to 96 per cent (from 79 per cent in 2017) and to 68 per cent (from 57 per cent in 2017), respectively.
Additionally, of the issuers with whom PIMCO engaged, 64 per cent declared that they were considering how their businesses could contribute to the advancement of sustainable development goals.
“At over $100 trillion, global bond markets are essential to financing a sustainable future. PIMCO is well positioned to spearhead this positive change and we integrate ESG analysis into our broad investment process,” PIMCO’s chief investment officer, Scott Mather, said.
“We do this because we believe it makes good investment sense, consistent with our goal of generating attractive risk‐adjusted returns for our clients.”
AUTHOR
Oksana Patron
Recommended for you
Lonsec and SQM Research have highlighted manager selection as a crucial risk for financial advisers when it comes to private market investments, particularly due to the clear performance dispersion.
Macquarie Asset Management has indicated its desire to commit the fast-growing wealth business in Australia by divesting part of its public investment business to Japanese investment bank Nomura.
Australia’s “sophisticated” financial services industry is a magnet for offshore fund managers, according to a global firm.
The latest Morningstar asset manager survey believes ETF providers are likely to retain the market share they have gained from active managers.
