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: Are investors looking for an AI bubble in the wrong place?

Partner Insight: Are investors looking for an AI bubble in the wrong place?

As the AI industry expands rapidly, Vaughan Nelson thinks we should be wary of booms in narrower parts of the AI ecosystem.

Vaughan Nelson, Natixis Investment Managers
clock 08 October 2026 • 9 min read
Peel Hunt selects SJP, Rathbones and IntegraFin as top wealth stocks

Peel Hunt selects SJP, Rathbones and IntegraFin as top wealth stocks

Asset & Wealth Management outlook

Patrick Brusnahan
clock 07 October 2026 • 2 min read
Partner Insight: Digging into the investment case for copper

Partner Insight: Digging into the investment case for copper

Copper prices have risen sharply in recent months, but a combination of geopolitical and broader macroeconomic themes have left the near-term pricing outlook uncertain. At the same time, structural demand remains robust and supply is increasingly challenged. James Richards and Oliver Hextall discuss their conviction in the long-term investment case for copper, and emphasise the importance of remaining selective.

James Richards and Oliver Hextal - Co-Portfolio Managers, Fidelity Transition Materials Fund
clock 07 October 2026 • 4 min read
Trustpilot