Fixed income is an ideal asset class to drive meaningful ESG change.
That's because in terms of sheer size, it is larger than the equity market. And there is a strong need for issuers to engage with buyers as they have to fundraise.
One company that PIMCO has engaged with is a British mutual financial institution. The bulk of the indirect GHG emissions created across their value chain (known as scope 3 emissions) relates largely to their mortgage portfolio.
PIMCO engaged with management to help shape their new sustainability KPIs, specifically on setting targets on net-zero portfolio emissions and improving the Energy Performance Certificates ratings (EPCs) for the assets secured by their mortgage lending.
In 2021, the institution pledged to go net-zero by 2050, joining the Net-Zero Banking Alliance (NZBA) and the Glasgow Financial Alliance for Net Zero (GFANZ). They also set a target for their mortgage portfolio to reach 50% of C-rated or above by 2030 in line with our recommendations.
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
