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PIMCO

PRI reporting framework 2020

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

Our approach is guided by four key beliefs:

1. ESG analysis is consistent with PIMCO's long-established investment process.

2. ESG investing doesn't need to be an 'either/or': either financial performance or positive impact.

3. Engagement is crucial to successfull ESG investing.

4. ESG issuance is about more than green bonds.

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

01.6. Additional information [Optional].

          
        

SG 01 CC. Climate risk

01.6 CC. Indicate whether your organisation has identified transition and physical climate-related risks and opportunities and factored this into the investment strategies and products, within the organisation’s investment time horizon.

Describe the identified transition and physical climate-related risks and opportunities and how they have been factored into the investment strategies/products.

When evaluating climate-related risks and opportunities of specific sectors and issuers, we begin with two broad categories:

1) Transition risks (e.g., tighter regulations on carbon emissions and changing economics that have affected the Auto and Utilities in the recent period) and

2) Physical risks (e.g., how the rising intensity and frequency of extreme weather events affects critical assets and natural resources used by the issuer, with consequences for credit risks similar to the wildfires that occurred in Brazil, Australia and California)

01.7 CC. Indicate whether the organisation has assessed the likelihood and impact of these climate risks?

Describe the associated timescales linked to these risks and opportunities.

Transition risks are already occurring in some industries and geographies and their intensification across a broader range of sectors due to a potential acceleration in the energy transition in the coming years is a possibility on the back of government responses to climate risks in the form of regulation, carbon taxes, and public investment, as well as shifts in consumer sentiment and business models. We expect this will change the investment landscape: The transition away from fossil fuels toward clean energy, for example, could transform the global economy and create significant investment opportunities that will expand over the next years, notably in conjunction with the Paris Agreement timetable (2020-2030).

Regarding physical risks, while some of the natural catastrophes linked to climate change are already affecting capital markets, the greatest disruptions, notably the rise in the intensity and frequency of extreme weather events, are generally projected to unfold over a long time horizon and there are larger uncertainties.

01.8 CC. Indicate whether the organisation publicly supports the TCFD?

01.9 CC. Indicate whether there is an organisation-wide strategy in place to identify and manage material climate-related risks and opportunities.

Describe

PIMCO’s climate strategy is led by our ESG team. PIMCO’s climate research is undertaken by sector credit analysts, working in close coordination with our ESG specialists. Climate risk features for example in our proprietary ESG scores for the issuers we evaluate.

To help analysts evaluate climate risk, PIMCO’s ESG specialists designed proprietary tools, looking within and across markets globally at the potential impact of extreme weather events, the transition to a low-carbon economy, and other climate-related factors.

PIMCO has also launched a climate bond strategy that specifically emphasises opportunities linked to climate investment solutions.

1.10 CC. Indicate the documents and/or communications the organisation uses to publish TCFD disclosures.


SG 02. Publicly available RI policy or guidance documents

 

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

URL/Attachment

URL/Attachment

URL/Attachment

02.3. Additional information [Optional].


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

PIMCO has implemented policies and procedures relating to, among other things, portfolio management and trading practices, personal investment transactions, and insider trading that seek to identify, manage and/or mitigate actual or potential conflicts of interest and resolve such conflicts appropriately if they occur. PIMCO seeks to resolve any actual or potential conflicts in each client’s best interest.

03.3. Additional information. [Optional]

We have appropriate systems and controls in place internally to ensure that conflicts of interests policies are adhered to and checked regularly by compliance.


SG 04. Identifying incidents occurring within portfolios (Not Completed)


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