Partner Insight: The fight for ESG data on bonds Investment WeekPartner Insight: The fight for ESG data on bonds Investment WeekPartner Insight: The fight for ESG data on bonds Investment Week
Impact Investing Forum 2022
London. April 28-29, 2022.
ESG integration into fixed income strategies isn’t easy. The most important of these is the lack of data and the quality of data. However, the situation is improving steadily.
“We are fighting tooth-and- nail for standardisation,” says Ketish Pthalingam, portfolio manager and member the PIMCO’s ESG Team. “It will make our lives easier, especially from the reporting perspective.
PIMCO employs dedicated ESG analysts to analyze each issuer’s ESG merits using various quantitative as well as qualitative factors. They then assign a proprietary score to each of the pillars ‘E, ‘S, and ‘G.
Pothamlingam says, “We are working very hard to get standardisation to be a key part the process going forward. Regulation will be an important aspect of that, especially in regard to disclosing information.”
The quality of reporting is becoming a more important aspect of regulation. The UK will soon make it mandatory for large companies, public companies, and limited liability partnerships (LLPs) to report against the Task Force on Climate Related Financial Disclosures (TCFD).
International Financial Reporting Standards Foundation (IFRS) Foundation is currently developing a new Sustainability Standards Board with the intention of adopting a similar climate disclosure norm. The quality of data will continue to improve with the support of regulators.
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Pimco funded this article