Partner Insight: The fight for ESG data on bonds

Fixed income investors need standardised data, and regulation will play its part, says PIMCO

clock • 1 min read
Partner Insight: The fight for ESG data on bonds

Incorporating ESG into fixed income strategies is not without its challenges. The biggest of these is the availability and quality of data, although the situation is getting steadily better.

"We are fighting tooth and nail for standardisation of data," says Ketish Pothalingam, portfolio manager and member of PIMCO's ESG team. "It will make all our lives easier, especially from a reporting perspective."

PIMCO has a dedicated team of ESG analysts who analyse the ESG merits of each issuer using various quantitative and qualitative factors and assign a proprietary score for each of the ‘E', ‘S' and ‘G' pillars.

"We are trying very hard to get standardisation as a key part of the process going forward, and regulation will be an important part of that, especially with regard to disclosing data," says Pothamlingam.

Regulators are increasingly placing more emphasis on the quality of reporting. Reporting against the Task Force on Climate-related Financial Disclosures (TCFD) is set to become mandatory in the UK for publicly quoted companies, large private companies and Limited Liability Partnerships (LLPs).

The International Financial Reporting Standards (IFRS) Foundation is also developing a new Sustainability Standards Board, with the intent of adopting a similar climate disclosure standard. With the support of the regulators, the quality of data is set to continue improving.


To read the full article,  click to access your exclusive Spotlight guide and learn more about the future of sustainable fixed income

This article is funded by Pimco



More on ESG

Demand for key inputs will rise sharply, as nations look to accelerate their renewables programmes.

Greenflation: What are the drivers and how long will it last?

Metal price rises 'structural'

clock 12 August 2022 • 3 min read
Invests in companies with strong biodiversity credentials.

HSBC launches biodiversity screened ETF

SFDR Article 8

clock 11 August 2022 • 1 min read
Charles Radclyffe of EthicsGrade

Avoid the watermelons: Time to think differently about ESG

Focus on investor needs

Charles Radclyffe
clock 10 August 2022 • 4 min read