Partner insight: Looking beyond the labels

Investors should look beyond ESG-labelled debt and at opportunities like unlabelled green bonds and climate leader bonds

clock • 1 min read
Lorenzo Brunelli, ESG product strategist at PIMCO
Image:

Lorenzo Brunelli, ESG product strategist at PIMCO

PIMCO believes it is critical that a well-rounded sustainability strategy shouldn't be limited only to ESG-labelled debt, even in the context of an ESG-optimised thematic strategy like the PIMCO GIS Climate Bond Fund.

"That would be sub-optimal because you would be missing a number of interesting opportunities in bond markets, especially from those issuers that are not in a position to issue dedicated instruments or use-of-proceeds bonds with a certification," says Lorenzo Brunelli, ESG product strategist at PIMCO.

These segments could be unlabelled green bonds or they could be climate leader bonds, both of which are critical categories for PIMCO's Climate Bond Strategy - a multi-sector thematic bond portfolio that invests beyond the green bond market.

Unlabelled green bonds are issued by companies that are structurally low carbon, for example a solar panel company or an electric passenger railway company.

"These are pure play or almost pure-play type of companies, and while they may not issue green-labelled, certified bonds, their businesses are nevertheless important to support the transition to a low carbon economy," says Brunelli.

As for climate leaders, PIMCO defines them as issuers deemed to be at the forefront of net zero transition in sectors that are not structurally green.

"These are issuers that are demonstrating a strong commitment to mitigate their carbon emissions at company level across the full value chain, encompassing the reduction of their environmental impact overall," Brunelli says.

For more on the latest trends in sustainable fixed income, read PIMCO's exclusive Spotlight guide. Complete your details in the form below to receive it by email

More on Investment

Partner Insight: Agentic AI and alpha - Where the AI edge really lies

Partner Insight: Agentic AI and alpha - Where the AI edge really lies

Robeco
clock 02 September 2026 • 9 min read
Lexolent's Nick Rowles-Davies: How to access diversification potential of litigation finance

Lexolent's Nick Rowles-Davies: How to access diversification potential of litigation finance

Beyond private markets

Nick Rowles-Davies
clock 28 August 2026 • 4 min read
Young investors trust AI more than TV or social media

Young investors trust AI more than TV or social media

73% know AI can provide inaccurate information

Sophia Panayi
clock 27 August 2026 • 5 min read
Trustpilot