By Carmen Nuzzo, Head of Fixed Income, PRI, and Jonathan Jones, Analyst, Fixed income, PRI

The PRI’s annual reporting cycle provides the largest public global record of ESG practices across capital markets, offering a wealth of information on how investment managers and asset owners integrate ESG considerations into policy and practice.

Our latest fixed income snapshot report, which compares signatories’ responses to the PRI Reporting Framework between 2017 and 2019[1], indicates that while responsible investment practices are not as advanced in fixed income as they are in listed equity[2], they have developed incrementally over the period.

The PRI’s snapshot reports

Snapshot reports are interactive data analyses that capture selected responsible investment practices as they apply to a given asset class, group of signatories, or theme at a specific point in time as part of PRI’s annual signatory reporting. The data in each report can be filtered to show differences in trends, based on signatory geography, size and type. Other recently published snapshot reports include the Climate change snapshot 2020 and the Listed equity snapshot 2020.

In 2019, 1,706 signatories reported on US$38trn in fixed income assets – representing approximately 41% of total PRI signatory AUM (US$91.9trn[3]).

As highlighted in the trends below, the data shows that fixed income investors have become more systematic in their ESG approaches, reflecting an increased appreciation that risks must be assessed more holistically, a desire to allocate capital in pursuit of sustainability goals and a fast-changing regulatory landscape – especially in Europe.[4]

Improving rankings

Fixed income investors have developed their approaches to ESG integration, as evidenced by an increase in the proportion high scores achieved in the Fixed Income Module. In 2019, 37% of signatories achieved an A, up from 23% in 2017, while 10% scored an A+, compared to 4% doing so two years previously.

A changing engagement landscape

Engagement by fixed income investors has grown rapidly. Some 27% of signatories engaged with issuers on more than 50% of their fixed income AUM in 2019, compared to only 14% in 2017, while the number of signatories that did not engage shrank significantly – from 43% in 2017 to 7% in 2019. This is a clear sign that fixed income investors have become more vocal about ESG topics when interacting with issuers.

Regional differences in ESG incorporation

When looking at ESG incorporation[5], most signatories preferred combining screening with thematic strategies, although there were regional differences. Nordic signatories favoured using screening alone rather than using it in combination with other approaches, while signatories from the Americas, Middle East and North Africa favoured using ESG integration techniques – a trend mirrored in listed equity incorporation[6].

More focus on corporate bonds

The snapshot shows crucial differences across fixed income instruments. Most of the efforts are concentrated on ESG integration in non-financial corporate bonds – even if they represented only 26% of the fixed income AUM reported on 2019. In contrast, efforts are lagging for other types of instruments – especially sovereign bonds which account for 48% of fixed income AUM.

Diversified focus

Signatories have increasingly requested guidance and support to analyse sovereign bonds, local government bonds, securitised products and private debt – a sign that ESG consideration is broadening across different funding channels. The PRI is conducting ongoing work across these areas with engaged advisory committees.

New fixed income resources

Alongside guides on incorporation and engagement, the PRI has produced an array of webinars, podcasts and case studies, including those published as part of our flagship initiative on ESG in credit risk and ratings. We also recently published a report on ESG engagement and sovereign debt investors, which highlights current practices and challenges facing sovereign bondholders and how they can scale up their actions to better contribute to a sustainable financial system. All of these resources can be found on the fixed income webpage.

As we enter the new year, our work will continue to focus on improving the tools available to signatories wanting to incorporate ESG considerations into their fixed income investments. This includes work on topics and initiatives such as structured debt, sub-sovereign bonds, thematic bonds and improving stakeholder outreach to issuers, credit ratings, ESG information providers and company advisors.


Please get in touch if you would like to be involved, by writing to [email protected].


This blog is written by PRI staff members and guest contributors. Our goal is to contribute to the broader debate around topical issues and to help showcase some of our research and other work that we undertake in support of our signatories.

Please note that although you can expect to find some posts here that broadly accord with the PRI’s official views, the blog authors write in their individual capacity and there is no “house view”. Nor do the views and opinions expressed on this blog constitute financial or other professional advice.

If you have any questions, please contact us at [email protected].