Sustainable
Investing
Report 2023

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Contents

Introduction

Sustainability at PIMCOIntroduction
Sustainability at PIMCO
Foreword
Sustainability at PIMCO
PIMCO’s sustainability philosophy
Shaping market convention
Engagement approach
PIMCO partnerships
Client Focus
Sustainable investment solutions
Client reporting capabilities

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources3

Integration, Research, Engagement: Our Active Edge 21

3
6

ESG integration highlights: physical risks, sector
frameworks and structured products
Environmental and climate research
Alternative credit and private investments
Research tools, data and analysis
Engagement in action

7
8
9
13
15
17
18
20

Fixed Income and Sustainable Investing
Sustainable economic activities
The role of fixed income
Resources

22
35
43
46
49
62
63
65
67

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

Sustainability
at PIMCO
A leading investment solutions provider
Proprietary ESG frameworks
Influencing change to benefit investment outcomes$559bn1

AUM

in Sustainability Strategies

2

1 As of 31 December 2023. The figure includes Third party and Allianz AUM
with strategies that include (i) minimum standards that refine the investment
opportunity set based on client directed exclusions criteria (“exclusionary”
portfolios); (ii) a focus on enhancing the sustainable characteristics of theportfolio in comparison to its investment universe (“enhanced” portfolios) or (iii)a focus on achieving a specific environmental/social objective in addition to afinancial objective (“thematic” portfolios).

2 Sustainable Strategies are strategies with client-driven sustainability requirements.
For these strategies, PIMCO actively incorporates sustainability principles (i.e.
excluding issuers fundamentally misaligned with sustainability factors, evaluating
issuers using proprietary and independent ESG scoring) consistent with thosestrategies and guidelines. Further information is available in PIMCO’s Sustainable
Investment Policy Statement. For information about funds that follow sustainability
strategies and guidelines, please refer to the fund’s prospectus for more detailed
information related to its investment objectives, investment strategies, andapproach to sustainable investment.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Sustainability
at PIMCO
A leading investment solutions provider
Proprietary ESG frameworks
Influencing change to benefit investment outcomes

Fixed Income and Sustainable Investing

Resources

CONTINUED DEVELOPMENT OF PROPRIETARYFRAMEWORKS ACROSS MULTIPLE ASSET
CLASSES AND THEMES, INCLUDING:PIMCO CREDIT AND ESG
ANALYSTS HAVE SCORED OVER

3800

3

corporate issuerswith a proprietary ESG score• Enhanced corporate sector evaluation
for utilities and building materials; expanded
ESG scoring coverage and analysis of structured
products including auto-asset backed securities(ABS), collateralized loan obligations (CLO),
covered bonds, sovereigns, supranationals, andagencies (SSA)• In-depth climate risk and biodiversity analysis,
including additional carbon analytics, carbon
attribution and projection tools. For example,
evaluating mortgage-backed securities (MBS)physical risk exposure for the average annual
building loss rate of underlying collateral• Expanded analysis to additional alternative asset
classes including private credit and real assets• Ongoing advancement of GSSS-labeled4 bondanalytics, including tools for relative value andtracking the progress of sustainability-linked bonds

3 As of December 31, 2023.
4 Green Bonds: are a type of bond whose proceeds are used to finance or re-finance new and existing projects or activities with positive environmental impact. Eligible project
categories include: renewable energy, energy efficiency, clean transportation, green buildings, wastewater management and climate change adaptation.
Social Bonds: are a type of bond whose proceeds are used to finance or re-finance social projects or activities that aim to address or mitigate a specific social issue or seek
to achieve positive social outcomes. Social project categories include providing and/or promoting: affordable basic infrastructure, access to essential services, affordable
housing, employment generation, food security, or socioeconomic advancement and empowerment.
Sustainability Bonds: are a type of bond whose proceeds are used to finance or re-finance a combination of green and social projects or activities. Sustainability bonds withstrict accountability of the use of proceeds towards activities that advance the UN Sustainable Development Goals or SDGs may be labeled as SDG Bonds.
Sustainability-linked Bonds: are bonds which are structurally linked to the issuer’s achievement of certain sustainability goals, such as through a covenant linking the coupon ofa bond to specific environmental and/or social goals. Progress, or lack thereof, toward the aforementioned goals or selected key performance indicators results in a decreaseor increase in the instrument’s coupon. In contrast to the green, social and sustainability bonds described above, sustainability-linked bonds do not finance particular projects
but rather finance the general functioning of an issuer that has explicit sustainability targets that are linked to the financing conditions of the bond.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Sustainability
at PIMCO
A leading investment solutions provider
Proprietary ESG frameworks
Influencing change to benefit investment outcomes

Fixed Income and Sustainable Investing

Resources

NEW PARTNERSHIPSENGAGEMENT

1350+
engagements5

Member of the Core Team of The
Partnership for Carbon Accounting
Financials (PCAF)
The Core Team has an ultimate
goal of harmonizing GHG accounting andreporting across the financial industry.

75%+

Member of the Executive Committeeof the ESG Integrated Disclosure
Project (ESG IDP)

5 As of 31 December 2023. SOURCE: PIMCO. PIMCO firm-wide ESG engagement
activities, Jan 1 - Dec 31, 2023. 1,355 corporate issuers engaged in 2023 refers to
all tracked engagements that discussed sustainbility topics. Engagements wereconducted by ESG and/or credit analysts. Not all ESG analysts are 100% ESGdedicated, some split their time between ESG engagement and traditional credit
research. Refers to tracked engagements conducted by ESG or corporate analysts.
Due to PIMCO internal system mapping of issuers, engagement figures, includinginteraction data by pillar and topic as of 2023 can vary and are subject to change.

6 About 75% of PIMCO’s firmwide market value of corporate issuers engaged on
ESG topics from Jan 1 - Dec 31, 2023. Includes all engagements conductedby ESG and credit analysts. Calculated as % AUM as of 31 December 2023.
Corporate issuers are credits covered by PIMCO’s corporate analyst teams. This
percentage is based on corporate assets under management of engaged issuers
held (numerator) divided by firm wide corporate assets under management(denominator). Please note that issuers engaged over the course of the calendar
year may have been sold prior to the year end, and in such a circumstance, would
not contribute towards the proportion of issuers engaged.

PIMCO’s firmwide market
value in corporate assets6
in 2023

The Executive Committee supports
the consistent collection of data fromsponsored and non-sponsored borrowers
across the private and broadly syndicatedcredit markets.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

Foreword
In this year’s report, weconsider several secularsustainable investing drivers
that PIMCO believes will
reshape the investment
landscape, following
a year of robust market debate.

Emmanuel Roman
CEO of PIMCOFirst, evolving regulatory frameworks
around the globe seek to streamline theecosystem of sustainable investing tohelp protect investors and fortify market
resilience. Regulation that seeks to enhancetransparency and comparability on material
topics will benefit investors by further
supporting investment managers as they
execute their fiduciary duty to their clients.
Global forces which impact markets,
including climate change, remain
highly durable. As market participants
seek to reduce risks and capitalize on
opportunities, regulatory objectives willcontinue to have investment implications.

Second, we believe two themes will
dominate sustainable investing over the
long-term – climate finance and unlocking
capital flows to underserved markets.
Having attended the last three UN Climate
Conferences, it is clear to us that funding
for the transition and, increasingly, climate
resilience will headline the sustainability
agenda. Transition and resilience financeare intrinsically tied to quality of life,
particularly in emerging markets, andplay a vital role in how all economies
continue to develop with increasing equity.
PIMCO’s climate investing frameworks
and sustainable investing strategies
should support clients well in this rapidly
expanding space.
Third, we see an exciting nexus between
emerging themes (e.g., nature andbiodiversity, climate physical risks, affordable
housing) and steadfast investment vehicles,
such as thematic labeled bonds, structured
products, and private credit strategies.
We are working with several importantorganizations – including the International
Capital Market Association and the United

Nations – to expand the sustainable
investing market through new guidance
and resources, aligned with the Sustainable
Development Goals.
In the following pages, you will find detailed
information on how we are translating oursustainable investing policy statement intorobust investment processes, strategies
and solutions, consistent with our fiduciary
duty. We hope this report proves valuable
and informative.
As always, we welcome your views,
feedback, and ideas.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Sustainability
at PIMCO
PIMCO’s sustainability
philosophy

Shaping market
convention

Engagement
approach

PIMCO
partnerships

Resources

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

PIMCO’S SUSTAINABILITY PHILOSOPHY

Stewards of our clients’ capital
PIMCO seeks to deliver superior investment returns,
solutions, and service to our clients. For over 50 years,
our extensive resources, global presence, and timetested investment process have helped clients meettheir financial goals and investment objectives.

Fiduciary duty to consider relevant risks in
our investment process
Where applicable, we aim to integrate sustainability risks
in our investment process for our actively managed
assets as a key risk management tool. The considerationof ESG factors may be appropriate when evaluating longterm investment opportunities and risks for certain asset
classes across public and private markets. This integrationof sustainability risks can take place during both thebottom-up analysis of issuers and the top-down analysis
of cyclical and secular trends.

A client-centric approach to sustainability

A platform to engage with issuers

For clients seeking to achieve specific sustainability
outcomes alongside financial objectives, we offer asuite of dedicated investment solutions that incorporate
the firm’s proprietary ESG optimization criteria. PIMCO
recognizes that sustainable investment solutions are not
one-size-fits-all, and we are well equipped to partner withclients to identify and customize sustainability objectives
that can help satisfy their specific needs.

As a leading fixed income manager, PIMCO has the scale
and access to engage issuers on matters that we believe
are essential when pursuing compelling risk-adjusted
returns. We believe PIMCO’s size, scale, history, andinvolvement across industry initiatives provides a platform
to engage with issuers who are continuing to evolve theirsustainability practices.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

Shaping market
convention
FIXED INCOME AND THE TRANSITION
TO A SUSTAINABLE ECONOMY
Debt capital markets and bond investors can play a pivotal
role in financing the transition towards a more sustainableeconomy. By providing capital directly to issuers, bondholders can help shape economies and business models.
PIMCO employs a comprehensive toolkit across its
research, engagement and investment activities, designed
to facilitate the interaction between issuers and investors,
with the ultimate goal of fostering a resilient and inclusive
global economy. By leveraging these tools, PIMCO aims
to enhance its investment strategies, promote sustainable
practices, and contribute to economic resilience.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

PIMCO’S ROLE IN THE TRANSITIONPIMCO’s scale and experience across a range of markets
make us well positioned to play a vital role in strategic
industry efforts related to sustainable investing. Thisextends beyond corporates, into structured credit,
sovereigns, municipals, and alternatives, where applicable.
These multifaceted efforts provide a distinctive market
perspective that is unique to PIMCO.
Equipped with this perspective, PIMCO aspires to be anindustry leader for continued development in ESG labeledbond issuance. We demonstrate this through our activities
as a member of the ICMA Executive Committee of the
Principles, including as a coordinator of the SustainabilityLinked Bond Working Group7, and our publication of bestpractices guidance, covering corporate, sovereign, andmunicipal issuers8. As the Co-Chair of the CFO Coalition for
the SDGs, PIMCO engages directly with leading CFOs andcorporate executives to identify solutions in addressing the
Sustainable Development Goals. Through our participationin the Core Team of the Partnership for Carbon Accounting
Financials (PCAF), PIMCO aims to address the increasing
demand from market participants for more consistent,
comparable data to measure greenhouse gas emissions indifferent sectors and across the capital structure.

7

Furthermore, PIMCO supports a number of international
climate-related disclosure standards and frameworks
such as the Institutional Investors Group on Climate
Change (IIGCC) and TCFD* increasing transparency,
measurement and management of climate risks. Our
longstanding history with numerous borrowers through arange of economic cycles provides a path for constructive
engagement on sector specific sustainability themes inseeking to uncover investment insight, and outcomes that
may reduce risks or capitalize on opportunities.
Our direct issuer engagement and industry leadershipefforts aim to support investment decisions byidentifying current and emerging risks, improving
market transparency, and informing proprietary credit
assessments and sector frameworks. These efforts feed
into our overall investment process in pursuing beneficial
investment outcomes for our clients.

In 2023, ICMA and the Executive of the Principles published updated Q&A and Sustainability-Linked Bond Principles notably featuring adapted language and metrics for sovereign issuers.
https://www.icmagroup.org/News/news-in-brief/the-principles-announce-updated-guidance-for-transition-finance-and-climate-themed-bonds-and-the-integration-of-sovereign-issuer-considerations-in-the-recommendations-and-tools-forsustainability-linked-bonds/
8 Source: PIMCO Guidance for Sovereign Sustainable Bond Issuance.
* As of 4Q23 the TCFD was disbanded and the FSB appointed the IFRS Foundation to take over the monitoring of companies’ climate-related disclosures. Please refer to PIMCO’s global Task Force on Climate-Related Financial Disclosures (TCFD) report.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

PIMCO AND THE PRIMARY MARKET
We believe that shaping market
convention on sustainability standards,
themes, and products can help
incentivize issuance and create diverse
sources of potential investment
opportunities for our portfolios.

As one of the largest investors in green, social, sustainable, and sustainability-linked (GSSS) bonds, the impact of ourinvested capital is sizeable and quantifiable. PIMCO uses its market position, and the demand for GSSS bonds, toencourage high quality issuance.
To allocate investor capital toward credible projects, there must be a variety of high quality GSSS bonds available in themarket. For over a decade, PIMCO has been one of the leading institutions supporting the GSSS bond market, and weremain committed to building the primary and secondary markets for labeled bonds:• As noted previously, PIMCO sits on the ICMA Principles
Executive Committee, and has been a member since2019. ICMA’s GSSS bond working groups shape theguidelines for issuers to follow when bringing thesebonds to market.
• PIMCO portfolio managers, credit research analysts, and
ESG analysts, conduct both routine and ad-hoc calls withbank syndicates and issuers.

• PIMCO offers feedback on recent GSSS bonds, advisingon how to strengthen issuer commitments and best alignthese commitments to global sustainability standards.
• PIMCO ESG analysts maintain due diligence on GSSS
bonds throughout stages of the issuance process,providing feedback on pre-deal calls through active
questioning of both the issuer and their advisors.

In order for GSSS issuance to be successful, for ESG risks to be managed, and opportunities to be identified, a market
environment that benefits all stakeholders needs to be realized.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

Creating GSSS supply throughroutine issuer engagement

Encouraging improved sustainability
practices for issuers of GSSS bonds

Credit research and ESG analysts regularly engage withthe executives and senior representatives of corporate,
sovereign, and quasi sovereign entities to encouragebalance sheet management and discuss bond issuance
where applicable. Routine engagement also serves toprovide additional data points on management quality andgovernance assessments.

PIMCO engages issuers on various elements of theirsustainability strategies to enhance access to the capital
markets, further supporting the implementation of
the GSSS bonds they may issue. These are long-term
relationships, which may also include a reverse inquiry. At
its best, engagement offers investment insight and may
help mobilize progress. PIMCO’s expertise across different
asset classes and global perspective offers a strong
position of counsel. Our analysts and portfolio managers
are in continuous communication with senior leadership
across our investee entities – guiding the development of
the sustainable bond market.

In the case where we believe sustainability topics arematerial to general corporate purpose (GCP) bondissuance, or the company is interested in issuing a GSSS
bond, our ESG and credit analysts work together to advise
on ideal structures, recommend the most applicablefeatures to the business model, and communicate criteria
we hope to see in a bond framework. PIMCO’s size, scale,and collaborative approach has led to routinely anchoring
deals for both GSSS and GCP bonds, to the benefit of ourclients. Additionally, the bond issuance from our long-term
engagements has supported shifts in corporate strategies
that we believe may benefit our clients, e.g. investing ingreen bonds from utilities to finance renewable energy
generation capacity, as they phase out thermal coal.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

Engagement approach
As one of the world's leading bondholders, we use our platform toengage with issuers on factors we believe are material to risk and returnconsiderations. We engage to uncover investment insights, mitigate risk,
and capitalize on prospective opportunities, with the potential to help
influence investment outcomes.
We believe that working with issuers to support enhancing their operational
practices can have a more significant impact – especially for issuers withhigher exposure to ESG related risks. We aim to create value and influence
forward momentum by engaging with companies at different stages of
their sustainability journey, particularly those in historically hard-to-abate
sectors. Our engagement practices, spanning diverse asset classes
and types of issuers, are designed to help drive efficiencies, which may
also benefit additional stakeholders. The purpose and structure of ourengagements are underpinned by creating value for our clients.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Purpose

Structure

The purpose of our engagement is to gain investment insights andpursue outcomes aimed at reducing risks. We prioritize issuers acrossthe platform where we have meaningful9 financial and ESG risk exposure,focusing on what we believe to be material topics. Active management
can greatly benefit from engagement, particularly when it comes tomitigating potential regulatory and secular ESG risks.10 By offering
best practices for issuers to consider, we aim to enhance their risk
management strategies, strengthen their credibility through increasedtransparency, and avoid potential controversies. We hold the view thatconsistent issuer engagement is essential for a thorough understandingof the investment’s risk-reward scenario, which is critical to making
informed buy or sell decisions.

At PIMCO, our engagement approach is designed to leverage thefull scale of our global team of credit analysts and build upon our
firm’s decades of experience working constructively with issuers.
Our engagement structure is built on two key mechanisms: bilateralengagement and collaborative engagement.
As previously covered, our bilateral engagements, conducted by our credit
research analysts, portfolio managers, and ESG analysts, allow us toaddress ESG risks platform wide. Guided by three principles – thinking likea treasurer, engaging like a partner, and holding to account as a lender –we seek to identify issuers that may benefit from engagement, develop
tailored engagement objectives, foster productive dialogue, and measureprogress against pre-defined internal benchmarks.
We actively participate in a wide range of industry initiatives and working
groups that seek to advance sustainability efforts, help define global
standards, encourage greater disclosure from issuers, and promote a
more resilient marketplace. Where we think it can benefit our clients,
industry initiatives allow PIMCO to participate with other investors to
advocate for clarity in ESG guidance to issuers/companies.

9 Defined through a proprietary determination which considers the size of the investment position, the presence of material ESG risk and the robustness of the ESG-risk mitigants implemented by the issuer.
10 Non-regulatory drivers such as consumer trends, a changing climate, political risks, market access risks, etc

Resources

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

PIMCO PARTNERSHIPS
As a leading
global investment
manager, wepartner with anumber of key
industry groups,
including thoselisted, to help drivea coordinatedglobal approach.

Industry Affiliations

Overview

Access to Nutrition Initiative (ATNI)
Signatory• Collaborating with investors, academics, non-profits, and foundations across the globe, ATNI establishes partnerships with organizations committed to solving
the world’s nutrition challenge, specifically working with food and beverage companies to improve their business practices.

Bank of England Climate Financial
Risk Forum (CFRF)
Member• CFRF works to build capacity and share best practice across industry and financial regulators to advance the sector’s responses to the financial risks fromclimate change.

Carbon Disclosure Project (CDP)
Signatory• Backed by approximately 680 investors totaling over $130 trillion in assets, CDP runs the disclosure system for stakeholders across the globe to manage theenvironmental impact of greenhouse gas emissions.

Climate Bonds Initiative (CBI)Partner• A leading organization focused on fixed income and climate change solutions, CBI has been instrumental in supporting more robust data and standards topropel the green bond market and remains heavily involved in shaping new green bond-related regulations.

The ESG Integrated Disclosure
Project (ESG IDP)
Executive Committee Member• The ESG Integrated Disclosure Project (ESG IDP) template provides borrowers with a harmonized and standardized means to report ESG information to their lenders.

Farm Animal Investment Risk
and Return (FAIRR)
Member• A global network of investors addressing ESG issuers in protein supply chains, FAIRR has over $23 trillion in member AUM.

Global Investors for Sustainable
Development Alliance (GISD)
Member• PIMCO is one of only 30 members of the UN Secretary-General’s GISD Alliance, which focuses on accelerating investment into sustainable development. In
partnership with investors, governments, and multilateral institutions, GISD will drive investment towards achieving the UN’s Sustainable Development Goals.

International Capital Markets
Association (ICMA) Principles
Executive Committee Member• ICMA promotes the development of appropriate, broadly accepted guidelines, rules, recommendations, and standard documentation to maintain and enhance
the framework of cross-border issuing, trading, and investing in debt securities.

Investor Group on Climate
Change (IGCC)
Member• Collaboration of Australian and New Zealand investors focused on the impact of climate change on investments.

• Brings together senior representatives from across the financial sector, including banks, insurers, and asset managers and includes observers from trade bodies
to represent a broader range of firms to ensure the output of the CFRF is communicated to their members.

• The Executive Committee oversees the use and development of the ESG IDP template, to support the consistent collection of data from sponsored and nonsponsored borrowers across the private and broadly syndicated credit markets.

• The aim of the initiative is to build a network of investors who are aware of the issues linked to intensive animal production and who seek to minimize therisks within the broader food system.

• The executive committee is responsible for the management and administration, which includes addressing all matters relating to the ICMA’s Principles: The
Green Bond Principles (GBP), Social Bond Principles (SBP), Sustainability Bond Guidelines (SBG), and Sustainability-Linked Bond Principles (SLBP).

• Represents investors with total funds under management of over $3 trillion in Australia and New Zealand and $30 trillion around the world. IGCC members
represent over 7.5 million people in Australia and New Zealand.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

PIMCO PARTNERSHIPS(CONTINUED)
Industry Affiliations

Overview

ISSB Investor Advisory Group (IIAG)Founding Member• Under the umbrella of the Value Reporting Framework, IIAG comprises asset owners and managers who recognize the need for consistent, comparable,
and reliable disclosure of ESG information. The group participates in the ongoing standards development process and encourages companies to participate
in the development process.

Institutional Investors Group on
Climate Change (IIGCC)
Member• IIGCC is a leading investor coalition on climate change, with more than 350 members across 23 countries, and over €50 trillion in assets.

One Planet Asset Management (OPAM)
Initiative Member• Initiative created following the 2015 Paris Agreement to mitigate the effects of climate change.

The Partnership for Carbon
Accounting Financials (PCAF)
Core Team Member• PCAF is a global partnership of financial institutions working together to develop and implement a harmonized approach to assess and disclose thegreenhouse gas (GHG) emissions associated with their loans and investments.

Principles for Responsible
Investment (PRI)
Signatory• The UN-supported Principles for Responsible Investment (PRI) is the world’s largest investor initiative focusing on integrating ESG factors into theinvestment processes.

• The group drives investor collaboration on climate change and takes action for a prosperous, low carbon future.

• Aims to help Sovereign Wealth Funds foster a shared understanding of key principles, methodologies, and indicators related to climate change; identify
climate-related risks and opportunities in their investments, and enhance their decision-making frameworks to better inform their priorities as investors andfinancial market participants.

• The Core Team of PCAF governs the Global GHG Accounting and Reporting Standard for the Financial Industry and all its updates and expansions, with theultimate goal of harmonizing GHG accounting and reporting across the financial industry.

• PIMCO is an active signatory of the PRI and engages in several work streams, including:• Chair of the PRI Sustainable Development Goals Advisory Committee (SDG)• Member of the Advance Initiative’s Advisory Committee, engaging companies to strengthen commitment, due diligence, and remediation of humanrights issues.

Transition Pathway Initiative (TPI)
Supporter• A global asset owner-led initiative (including clients and investment consultants), TPI assesses companies’ preparedness for the transition to a lowcarbon economy.
• TPI data and tools help inform our assessment of climate risks and engagement with bond issuers.

UN Global Compact (UNGC)
Member• UNGC is a principles-based framework for businesses aimed at advancing sustainable and responsible policies and practices.
• PIMCO supports the Ten Principles of the UN Global Compact with respect to human rights, labor, environment, and anti-corruption – and is committed toincorporating these principles into our strategy, culture, and day-to-day operations.
• PIMCO co-chairs the UN Global Compact’s CFO Coalition, which is an effort to create a movement of chief financial officers to address SDG investment
and financing.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Client
Focus
Sustainable
investment
solutions

Clientreportingcapabilities

Fixed Income and Sustainable Investing

Resources

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

PIMCO’S SUSTAINABLE INVESTMENT SOLUTIONS
For clients seeking greater sustainability orientation in their portfolio, PIMCO manages a dedicatedsuite of mandates that follow sustainability strategies and guidelines. These strategies11 utilize thethree building blocks of PIMCO’s ESG portfolio construction process:
Limit exposure to sectors and issuers with higher ESG risk factors.
Emphasize issuers with leading and improving ESG risk-mitigation strategies and those who seek tocapitalize on sustainable operations and business models.
This includes issuers of green, social, sustainability, or sustainability-linked (GSSS) bonds who want to improve their ESG risk
management or seek to take advantage of secular sustainability trends. Issuers and GSSS bonds are identified through PIMCO’s
proprietary ESG scoring system, which considers both an issuer’s momentum and their performance relative to industry peers.
In addition to pursuing risk-adjusted returns, these portfolios may seek to actively manage the portfolio’s carbon footprint,
achieve a meaningful GSSS allocation and/or tilt toward issuers with leading, or improving, ESG characteristics.

Engage constructively with issuers to help influence ESG and sustainability practices over time.
PIMCO’s engagement practices are conducted on behalf of the firm to gain insight into an issuer’s management quality andinform investment decisions. Engagements may focus on sustainability practices and ESG risks that could have the potential
to enhance risk-adjusted returns. We believe that collaborating with, and allocating capital to issuers willing to improve thesustainability of their business practices has the potential to benefit a strategy’s investment outcomes, rather than simply
avoiding issuers with poor ESG metrics and favoring those with strong metrics.
11 Sustainable Strategies are strategies with client-driven sustainability requirements. For these strategies, PIMCO actively incorporates sustainability principles (i.e. excluding issuers fundamentally misaligned with sustainability factors, evaluating issuers using
proprietary and independent ESG scoring) consistent with those strategies and guidelines. Further information is available in PIMCO’s Sustainable Investment Policy Statement. For information about funds that follow sustainability strategies and guidelines, pleaserefer to the fund prospectus for more detailed information related to its investment objectives, investment strategies, and approach to sustainable investment.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

PIMCO’S RANGE OFSUSTAINABILITY STRATEGIES
We offer a wide range of sustainability
strategies across the spectrum of fixedincome markets.
PIMCO acknowledges that clients around the world define
their sustainability objectives differently and may requirea range of tailored solutions to achieve their objectives.
We are committed to helping clients pursue their investing
goals, and are well equipped to partner with clients to
explore the possibility of implementing custom mandates
with sustainability strategies and guidelines12 tailoredto their needs, as well as their risk and return profiles.
We have collaborated with clients on numerous tailoredsolutions to help pursue their financial and sustainability
objectives, including but not limited to portfolios withallocations weighted towards sustainability leaders, GSSS
labeled bonds, relative carbon intensity targets, and lowcarbon transition strategies.
As markets and investor demands continue to develop,
PIMCO will actively engage with our clients to implement
thoughtful solutions that aim to deliver on their goals
and objectives.

12 Sustainable Strategies are strategies with client-driven sustainability requirements. For these strategies, PIMCO actively incorporates sustainability principles (i.e. excluding issuers fundamentally misaligned with sustainability factors, evaluating issuers using proprietary and independent ESG scoring) consistent with those strategies and guidelines. Further
information is available in PIMCO’s Sustainable Investment Policy Statement. For information about funds that follow sustainability strategies and guidelines, please refer to the fund prospectus for more detailed information related to its investment objectives, investment strategies, and approach to sustainable investment.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

CLIENT REPORTING CAPABILITIESCredible ESG data is the foundation for arobust sustainability platform.
Access to credible ESG data has historically been oneof the biggest challenges to sustainable investing. While
traditional financial statements are readily available,credible and reliable ESG data is only now being reportedby the largest companies. Unlike accounting data,
ESG data can be primarily qualitative and is often notcomparable across issuers.
In recent years, the quality and quantity of ESG data
has improved rapidly as stakeholders push companies
globally to disclose more ESG information, which may help
improve investment decision-making. PIMCO has been
investing in the team and the technology to incorporate
ESG data into our investment process for many years. Our
dedicated ESG technology team has developed tools thatenable portfolio managers across the firm to integrate
third-party and proprietary ESG data into the investment
process where relevant. We centralize and incorporate
ESG data into our research and investment processes
where relevant.

In addition, we are committed to transparency with ourclients and our ESG technology team has developed
proprietary tools to support ESG reporting. For accounts
that follow sustainability strategies and guidelines13, weregularly publish reports in an effort to provide portfolio
information, including sustainability metrics such as GSSS
bond allocations, carbon metrics, and portfolio aggregate
ESG scores.
We can also develop robust custom reporting packages
for separate account clients depending on the nature of
their requests. These may include monitoring of carbon
footprint and metrics to help illustrate the outcomes fromrelevant investment decisions, measurement of the carbon
footprint in corporate credit and sovereign portfolios, ormeasurement of carbon emissions and carbon intensity at
the portfolio or select sector level.
As PIMCO’s sustainability efforts continue to grow andthe quality and quantity of industry available ESG data
improves, we will continue to invest in our infrastructure,monitoring, and reporting to seek increased value for ourclients. In 2023, we incorporated reporting functionalities
linked to various use cases, including climate risk,
portfolio decarbonization, impact reporting, and exposure
to climate solutions.

13 Sustainable Strategies are strategies with client-driven sustainability requirements. For these strategies, PIMCO actively incorporates sustainability principles (i.e. excluding issuers fundamentally misaligned with sustainability factors,
evaluating issuers using proprietary and independent ESG scoring) consistent with those strategies and guidelines. Further information is available in PIMCO’s Sustainable Investment Policy Statement. For information about funds that
follow sustainability strategies and guidelines, please refer to the fund prospectus for more detailed information related to its investment objectives, investment strategies, and approach to sustainable investment.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Integration, Research,
Engagement:
Our Active Edge
ESG integration
highlights

Environmental
and climate
research

Alternative credit
and private
investments

Research
tools, data andanalysisEngagementin action

Resources

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

ESG INTEGRATION HIGHLIGHTS: PHYSICAL RISKS, SECTOR
FRAMEWORKS AND STRUCTURED PRODUCTS
As outlined in PIMCO’s sustainability philosophy, we believe the consideration of
relevant ESG factors is part of a robust investment research process. ESG factors may
be important inputs when evaluating long-term investment opportunities and risks
across asset classes in both public and private markets. ESG factors may include but
are not limited to: climate change risks, resource efficiency, natural capital, humancapital management, human rights, regulatory risks, balance sheet management, andreputational risk at an issuer level, among others. We recognize that ESG factors may be
increasingly important inputs when evaluating global economies, markets, industries, andbusiness models.
The relevance of ESG factors to PIMCO’s investment decisions may vary across asset
classes, strategies, products, valuations, and investment horizons. Integrating relevant
ESG factors into the evaluation process does not mean that ESG-related information is
the sole or primary consideration for an investment decision; instead, PIMCO’s portfolio
managers and analysts consider a variety of factors and their materiality when making
investment decisions. By increasing and diversifying the information available to theportfolio management team, we seek to provide a more holistic view of an investment,
which we believe will benefit our clients.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

PIMCO INCORPORATES ESG CONSIDERATIONS FROM A TOP-DOWN AND BOTTOM-UP PERSPECTIVE
TOP-DOWN

Speakers include Nobel prize winners,
heads of state, renowned academics,
global central bankers

Themes identified through annual
Secular Forum process

Climate change

Geopolitics

Healthand Safety

Corporate
governanceSpecialty desks, credit analysts,
security selection

Demographic
trendsCybersecurity

Understanding all material risks is critical tomaking sound investment decisions

ENVIRONMENTSOCIAL

GOVERNANCE

Employs resource efficiency, fromwaste to energy consumption

Ensures sound product safety andquality standards to protect end-users

Management’s capacity to
manage risk over the cycle

BOTTOM-UP
Source: PIMCO. Including indicative examples of themes and risks. For illustrative purposes only.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

CLIMATE PHYSICAL RISKS AND RESILIENCE
Weather disruptions are intensifying
As underscored by the Intergovernmental Panel on Climate Change (IPCC), risks fromextreme weather events are considered likely to increase in frequency and severity inthe coming decades as global average surface temperatures continue to rise. However,effects are already visible14 and 2023 has been identified as the hottest year on record
globally, with an average temperature of almost 1.5 degrees celsius above pre-industrial
levels15. This has been linked by scientists to various climate anomalies and events, suchas severe heatwaves and wildfires in places with very different climates16.
Extreme weather events appear more frequently, occurring simultaneously in different
locations, and may pose market risk since they reduce the possibility to diversify sourcing,which could trigger supply chain shortages and disruptions. These factors affect criticalassets and natural resources within the production value chain of global debt issuers.
These effects are expected to increasingly impact company financials17 (e.g., via growing
costs of raw materials or insurance premiums, increased investment needs to cope withthese risks, or the heightened volatility of revenues linked to business disruptions or shifts
in customer demand) and in turn, valuations. Consequently, adaptation and resilience are
becoming pivotal topics for capital markets, as a lack of climate action likely means greaterrisk to return potential and higher volatility.

14 Assessment Report 5 – Topic 2: Future Climate Changes, Risks and Impacts.
In 2023, losses from natural catastrophes could total US$ 270bn according to Munich Re (a slight reduction over 2022 but a material increase over previous years).
15 Copernicus: 2023 is the hottest year on record, with global temperatures close to the 1.5 degrees limit.
16 Sources: https://www.ipcc.ch/assessment-report/ar6/ and https://www.worldweatherattribution.org/
17 As estimated by various external sources, including academics, central banks, businesses, think tanks, data providers, or credit rating agencies, such as S&P (https://www.
spglobal.com/marketintelligence/en/news-insights/blog/using-scenarios-to-evaluate-the-medium-to-long-term-impact-of-transition-and-physical-climate-risks-on-credit-quality),
Fitch (https://www.fitchratings.com/research/corporate-finance/climate-risk-related-downgrade-may-affect-20-of-global-corporates-by-2035-08-03-2023) and Moody’s (https://www.moodys.com/sites/products/ProductAttachments/Infographics/Environmental-Risks-Global-Heatmap-Overview.pdf)

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PIMCO SUSTAINABLE INVESTING REPORT 2023

SCORING FRAMEWORKS ACROSSASSET CLASSESPIMCO has developed a proprietary framework to assess
the physical risk exposure of corporate bonds, sovereigns,
municipal bonds, and securitized asset classes; eachof these leverage third-party data specifically suited tothe particular instrument, which is then adjusted andconverted into proprietary physical risk scores andrelated metrics. In all cases, low scores may lead to lower
fundamental valuations versus market pricing.

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Application

Fixed Income and Sustainable Investing

Resources

Methodology and sources

Corporates

Sub-pillar of the Environmental pillar score
for corporates, using different weights
depending on the sector. See case study
on page 26.

Exposure scores across several hazards building on climate models using theRepresentative Concentration Pathway 8.5 (RCP 8.5) for the period 2030-40 coupledwith geolocation of the assets owned by the companies covered. Includes impacts tobroader parts of the value chain.

Sovereigns

Sub-pillar of the Environmental pillar
score of PIMCO’s proprietary sovereign
quantitative model.

Current exposure to climate hazards as well as projected climate change under the
RCP8.5, consideration of human population’s sensitivity to extreme climate events,
including on health, poverty, knowledge, infrastructure, conflict, agriculture, andpopulation pressure to assess the current capacity of a country to adapt to or leverage
existing or anticipated stresses resulting from climate change.

Municipals

Sub-pillar of the Environmental pillar scoreof PIMCO’s proprietary framework.

Third party climate data that includes a relative assessment of physical climate hazards
based on climate models and geospatial data, as well as assessments of projected
property value at risk and economic output at risk over various time periods.

Mortgage-and assetbacked securities(MBS and ABS)

Identification of RMBS exposed to physicalrisk across 17 natural hazards, as partof environmental evaluation of the asset
class. See case study on page 27.

Public source Federal Emergency Management Agency’s National Risk Index for Natural
Hazards provides U.S. census tract-level data to produce different metrics such as anannual building loss rate.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

CORPORATE CASE STUDY:PORTFOLIO LEVELASSESSMENTPIMCO’s proprietary framework allows us
to develop a suite of metrics and charts
to help understand the exposure of ourportfolios.

PHYSICAL RISK EXPOSURE PERCENTILE SCORES (CORPORATES)

  Representative ESG Portfolio

  Bloomberg Global Aggregate Credit Index

The chart includes the total physical risk
exposure score of an illustrative portfolio,
including its breakdown per the different
pillars of the corporate score, and suggests
lower potential exposure than the benchmark:26• Direct Impacts:
Assets and Operations Risk
• Indirect Impacts:
Supply Chain Risk (upstream)
Market Risk (downstream)

Total Physical Risk
Exposure Score

Operations
Risk Score

Supply Chain
Risk Score

MarketRisk Score

As of 31 December 2023. Source: Sample for illustrative purposes only. Moody’s ESG Solutions. Weighted average percentile scores per sector based on corporate issuers. This percentile score means that each company score has been rescaled by percentile with respect to the universe of companies covered by Moody’s ESG Solutions to put them on
a 0-100 scale: 0 (low risk) and 100 (high risk). The percentile score is useful to directly benchmark the hazard score of a company relative to the others. Moody’s ESG Solutions’ physical climate risk scoring methodology for corporations assesses three types of risk: Operations Risk, Supply Chain Risk, and Market Risk. Operations Risk measures the overall
climate hazard exposure associated with the facilities a company owns or operates. Supply Chain Risk and Market Risk capture respectively upstream (supply chain) and downstream (distribution, customers) climate risks for companies. Operations Risk constitutes 70% of the total company score, while Supply Chain and Market Risk each account for 15%.
The total risk is below the average which would be equivalent to the 50th percentile. This Figure is provided for information purposes and should not be construed as a solicitation or offer to buy or sell any PIMCO or other securities or related financial instruments in any jurisdiction.

PIMCO SUSTAINABLE INVESTING REPORT 2023

STRUCTURED PRODUCTS
CASE STUDY:MORTGAGE-BACKED
SECURITIES IN THE U.S.

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Within structured products, the physical risk for individual
subsectors is different. Residential mortgage-backed
securities (RMBS) or commercial mortgage-backed
securities (CMBS), where collateral is mostly concentrated
in real assets, are exposed to higher physical risk.

ANNUAL BUILDING LOSS RATE BY STATE

Fixed Income and Sustainable Investing

Resources

Our assessment combines climate risk data from Federal
Emergency Management Agency (FEMA) and PIMCO’sexisting geo-spatial mortgage analytics that help locate thereal estate assets. By doing so, we can estimate the physicalrisk exposure of MBS from a host of natural hazards inaggregate in the U.S. The exposure is expressed throughmetrics at the security and portfolio level, which serve as
proxies to help clients understand the gross exposure of MBS
investments to physical risk. Our work continues as we explore
ways to incorporate more climate scenarios into the analysis.

Weighted Average of Annual Building Loss Rate%

0.60%

0.50%

27
0.40%

0.30%

0.20%

0.10%

0.00%
PR VI FL LA GU SC CA MP MS UT TX OR WA NC AL HI AK NV ND NE NJ AR SD OK TN CO GA AS IA VA KS ME MO KY MD DE ID NH CT RI MA NM MT MN WY IN WV NY IL AZ VT MI PA WI OH DC
Source: FEMA, PIMCO. As of March 2023. For illustrative purposes only

State

Weighted Average Annual Building Loss Rate. The building loss rate is derived from the National Risk Index which is developed by the Federal Emergency Management Agency to provide a relative measurement of community-level natural hazard risk in the US region including US territories. Building exposure is defined as the dollar value of the buildings
determined to be exposed to a hazard according to a hazard-specific methodology. Annual Building Loss Rate is calculated as a ratio of total expected loss of buildings within a specific location relative to the total value of buildings in the same location (e.g. buildings within the same state).

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

APPLYING PHYSICAL RISK RESEARCH TO OURISSUER ENGAGEMENT PROCESSPIMCO has incorporated specific physical risk elements as part of its
ESG engagement framework. This helps us determine the extent to which
corporate issuers are assessing and monitoring those risks internallyand, most importantly, the extent to which they are developing adaptation
solutions, since there is typically less data available on such actions.
Questions covered relate to the assessment, disclosure, findings andactions – which may include how impacts are calculated across thevalue chain, business segments or geographies, alignment with the TCFD
recommendations – and the significance of results on the business andfuture risk mitigation strategies.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

SECTOR FRAMEWORK SNAPSHOTIn this example, we outline the 2023
enhancements to the Environmental pillar in
our Utilities Sector Framework.
Utilities play a key role in energy transition.
The utility sector accounts for 44%18 of the
global energy-related CO2 emissions andplays a critical role in broader economy
wide de-carbonization efforts. The energy
transition and grid reliability are highly
material as the sector faces financial
impacts from the increase in severity
and volume of climate-related weather
events. This translates accordingly into
PIMCO’s sector-specific framework withrespective weight assigned to these
topics. In addition, ESG and credit analysts
collaboratively engage with issuersof existing – and potential – portfolio
companies on the importance of climatetransition and resilience.

UTILITIES SECTOR FRAMEWORK AND KEY PERFORMANCE INDICATORS (KPIs) – ENVIRONMENTAL PILLAR

Resource Efficiency
and Natural Capital

Climate Change

Greenhouse
Gas Emissions

Physical Risks
and Resilience

Transition Exposure

Physical Risk Exposure

Transition Performance

Climate Resilience
Management

Transition Target

Transition Disclosure
18 Source: IEA Greenhouse Gas Emissions from Energy, as of 2021. https://www. iea.org/data-and-statistics/data-product/co2-emissions-from-fuel-combustion
Source for chart: PIMCO, as of 31 December 2023. Chart is for illustrative purposes only.

Pillar

ENVIRONMENT

Theme

Water

Air Pollution
and Biodiversity

Issue

Exposure andReliance on Water

Emissions of
Air PollutantsCore andsub-KPI

Water Use Management

Conduct on Biodiversity

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

STRUCTURED PRODUCTS
MBS, ABS, CLO AND COVERED BONDS
Structured products account for almost 25% of all outstanding fixed income
securities19. We view the asset class as an essential investment component
when it comes to supporting PIMCO clients in their sustainability journeys.
Compared to corporates, securitized products offer their own unique advantages as well as challenges.
The variety within the asset class has allowed our clients to explore investment opportunities that offer
either environmental or social benefits.

30

19 SIFMA, as of 2022

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

STRUCTURED PRODUCTS
MBS, ABS, CLO AND COVERED BONDS (CONTINUED)

Data quality and disclosure continue to pose challenges forinvestors. Consistent with our overall engagement approach(page 13), PIMCO views active engagement with originators/
sponsors, and with the broader investor community, as
playing a key role in bridging the gap and contributing toa positive change in data transparency and framework
standardization. We have developed tools to track ourengagements with sponsors/originators around the world.
In 2023, PIMCO engaged with nearly 30% of our firmwide
securitized product holdings. PIMCO is a member of theStructured Finance Association (SFA) ESG working group.
Along with other issuers and investors, SFA has publishedinaugural ESG Best Practices for Auto ABS and Residential
Mortgage-Backed Securities (RMBS) disclosures.
The investment analysis and engagement has allowed us touncover insights from a bottom-up perspective. In addition,
we also believe that policy advocacy will provide some
guidance for the market from a top-down perspective.
For securitized and asset backed products with underlying
loans related to mortgages, PIMCO leverages its expertisein real estate to assess the sustainability characteristics
underlying these investments. For example, on European
RMBS, covered bonds and Danish mortgages, we assess
ambition related to energy efficiency, energy performancecertificate (EPC) composition of the portfolio, related
European Union (EU) taxonomy disclosures related to theloan book, and physical climate change risk, among others.
We tend to engage with issuers, both pre-and post-issuance,
to inform our investment decisions.
Lastly, PIMCO applies its ESG corporate sustainability
assessment frameworks – similar to application to a
corporate portfolio – to analyze our Collateralized Loan
Obligation CLO investments (CLOs are securitizations
backed by multiple loans to corporations). As a result,
we produce CLO level scoring across several importantsustainability metrics, which may include carbon emissions,sensitive sector exposure, or corporate alignment with
the Paris Agreement. This can allow us to evaluate anddifferentiate investments that are considered leaders or
laggards from a sustainability perspective.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

CASE STUDY:
AUTO ABS COMPANY
The company’s underwriting is focused on “ability to pay” at reasonablerates in order to provide access to work/family transportation for a “credit
invisible” cohort. By financing only work/family vehicles, the company helps
lower income borrowers participate in the U.S. economy. It also provides
native language and financial literacy support for borrowers to help increasetransparency and drive successful outcomes for borrowers.
Prudent ESG and traditional underwriting practices may help mitigate credit
risk, and the auto loans originated by this company have performed well. We
expect the senior bonds to also have sufficient credit support to potentiallywithstand severe recession scenarios.
By engaging early on both ESG and portfolio management, PIMCO was able
to negotiate what we believe to be favorable deal economics.

NUMBER OF ACTIVE ACCOUNTSUNDERWRITES
WORK/FAMILY VEHICLESSEDANS 30%

50.9%
FICO*

32

49.1%
No FICO*LIGHT TRUCKS 70%

The example above is presented for illustrative purposes only, as a general example of PIMCO’s ESG research and engagement capability and is not intended to represent
any specific portfolio’s performance or how a portfolio will be invested or allocated at any particular time. PIMCO’s ESG processes may yield different results than otherinvestment managers’ and a company’s ESG rankings and factors may change over time. Source: PIMCO. All data is as of 31 December 2023, unless otherwise stated.
* Fair Isaac Corporation (FICO) score: utilized for credit scoring services/purposes. Source: PIMCO, Bloomberg, company filings.

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

CASE STUDY:SOLAR ASSET-BACKED SECURITIES(ABS) COMPANY

The company supports customers across 45 U.S. states with the large upfront costsof residential solar services, removing the entry barrier to renewable energy. They arealso a signatory of Solar Energy Industries Association (SEIA) Forced Labor Prevention
Pledge – a commitment to help ensure that the solar supply chain is free of forced labor.
Cost of residential solar has dropped by more than 50% over the last 10 years20, making it
competitive with utility-scale prices; the recent passage of the U.S. Inflation Reduction Act
should continue to provide tailwind on pricing.
Unlike unsecured exposure to the solar industry, solar asset-backed securities (ABS) arebacked by prime quality collateral (solar loans) and this solar ABS deal has performancetriggers that may further insulate investors from credit losses.

20 https://www.seia.org/us-solar-market-insightThe example above is presented for illustrative purposes only, as a general example of PIMCO’s ESG research and engagement capability and is not intended to represent
any specific portfolio’s performance or how a portfolio will be invested or allocated at any particular time. PIMCO’s ESG processes may yield different results than otherinvestment managers’ and a company’s ESG rankings and factors may change over time. Source: PIMCO. All data is as of 31 December 2023, unless otherwise stated.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

ENGAGEMENT CASE STUDY:
U.S. FEDERAL HOUSING FINANCING
AGENCY (FHFA)In Q1 2023, FHFA issued a Request for Input (RFI) on Enterprise Single-Family Social Bond
Program. To date, Fannie Mae and Freddie Mac have issued labeled multifamily social bonds,
but neither has issued labeled single-family social bonds.
PIMCO ESG research on MBS has a materiality approach to social topics, focusing on
housing affordability and access to credit. We believe this approach can help address
underserved areas of demand and promote additional sources of supply. These efforts canalso benefit the housing market and economy more broadly.
We have conducted one-to-one engagements with Government-Sponsored Enterprises(GSEs) and have provided our suggestions on sustainable finance practices and sustainability
disclosure. We have also provided responses to the FHFA Request For Information (RFI), andshared our views of the implication on both the housing finance market and the borrowers.

The example above is presented for illustrative purposes only, as a general example of PIMCO’s ESG research and engagement capability and is not intended to represent
any specific portfolio’s performance or how a portfolio will be invested or allocated at any particular time. PIMCO’s ESG processes may yield different results than otherinvestment managers’ and a company’s ESG rankings and factors may change over time. Source: PIMCO. All data is as of 31 December 2023, unless otherwise stated.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Environmental andclimate research

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

CAPTURING OPPORTUNITIES AS THE WORLD SHIFTS FURTHER TOWARDS A DISORDERLY TRANSITION
2023 proved eventful for the transition to a lower-carbon economy.

Market developments

Policy developments

Potential investment implications

Disruptions occurred last year in parts of the renewables
market (e.g., offshore wind), largely related to starting
valuations, execution problems, supply chain issues, or
funding costs – given high interest rates. Moreover, theelectric vehicle (EV) market has also faced mounting
challenges that have questioned the pace of growth.

Regarding international climate policy, we attended the 28th
United Nations Climate Change Conference (COP28) andreturned with a mixture of optimism and concern. Whilea lot of work lies ahead to realize many of the goals, thecommitment to increasing renewables capacity, nuclear
generation and efficiency targets, as well as reducing
methane from the oil and gas supply chain, were notable.21
Meanwhile, there were a number of important regional
climate policy developments that unfolded in 2023,
including progress in terms of climate regulation (e.g., in
Europe via the EU ‘Fit for 55’ that contains revision to thecarbon market and introduction of the Carbon Border
Adjustment Mechanism), in addition to continued positive
fiscal signals (in Europe via the Green Deal Industrial Planand in the U.S. the Inflation Reduction Act). In the meantime,
many governments are moving forward with a range ofinitiatives to propel green finance and enhanced climate risk
assessments and disclosure from the finance sector.

While certain trends were mixed – when looking at market
or policy developments – we believe the drivers of green
technologies remain durable overall and there is strong
momentum for additional climate investment, as well as
the corresponding labeled (e.g. green) bond issuances.
This applies both to well-established categories such as
renewable energy or energy efficiency, or more innovativetechnologies such as carbon capture and storage, cleanhydrogen, or methane abatement, across the value chain
and asset classes. This said, the headwinds previously
mentioned serve as a reminder of the relatively disorderly
nature of the energy transition, as well as the lingering
uncertainties concerning the speed of the transition.
We think this makes it even more important for asset
managers to have a robust assessment of transition risks
and analytical frameworks that allow the managers toassess the impact on investment theses.

21 For more information on our feedback from the COP28 please see our blog https://www.pimco.com/gbl/en/insights/cop28-climate-issues-share-center-stage-with-oil-and-gas

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

CARBON CAPABILITIESWe continuously look for a way to enhance and expand our capabilities to assess andmanage climate risks, as well as measure and optimize the climate impacts of portfolios.
For example, we deepened our research on topics such as scope 3 (indirect upstream anddownstream emissions), carbon reporting beyond corporates (e.g., sovereign, securitized),
and climate solutions (e.g., taxonomy alignment of capex and revenues)22. We will continue
to expand our capabilities across asset classes as external data sources improve in quality
and coverage.
A further overarching goal is to ensure that our frameworks and tools reflect market
developments – as well as our clients’ preferences and needs – given the proliferation of
external initiatives and methodologies.
While there are common global benchmarks, for example in relation to the Paris Agreement
and net zero goal, the energy transition continues to unfold at a different pace in different
regions. The regional and sectoral contexts coupled with idiosyncratic factors mean that
there is no one-size-fits-all concerning the interpretation and implementation of a climatetransition plan for an issuer or investor. We endeavor to reflect this in our engagement andrecommendations for issuers or asset owners concerning best practices and the role of debt
markets to advance the transition.

22 For more information on our climate capabilities see our Global TCFD Report https://www.pimco.com/gbl/en/documents/dca97fa8-18ab-429e-bbb7-2cd1e2afb678

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

SUMMARY OF PIMCO’S CLIMATE TOOLS, SOLUTIONS AND AREAS OF FOCUS
These practical nuances
have become a focal pointas 2023 was characterized
by a broad shift from
portfolio climate target
setting to implementation
at portfolio levels,
particularly as it relates tothe portfolio’s greenhousegas emissions reduction.
This has resulted in agreater recognition of thecomplexity of the transition,and more questions
around the effectivenessof different responsible
investment approaches
i.e. engagement relative toscreening and exclusions.

Approach

Focus

PIMCO tools
and solutions

Metrics

Recent developments and areas of focus

Integration andrisk management

Climate transitionand physicalrisk assessments

Proprietary scoring
frameworks across fixedincome sectors

Risk scores
Scenario analysis (value at risk)• Incorporation of the latest climate scenarios• Structured products (e.g., ABS, MBS)• Transition plan assessments and engagement• Physical risks methodology enhancement• Publication of our first UK and Global TCFD reports

Climate impact
and investment
solutions and tools

Portfolio's greenhouse gas
emissions reduction
and optimization
Alignment with theParis Agreement and net
zero transition finance
Climate solutions

Decarbonization andnet zero framework

Carbon footprint or weighted
average carbon intensity• Extension of the coverage to alts, CLO, private debt, structured, sovereign

Engagement underpinnedby our size and relationshipwith issuers

Paris alignment classification• Sectoral targets based on physical carbon intensity

Proprietary scoring
frameworks (GSSS-labeledbonds)

Implied temperature rise
Climate transition improvers
and leaders
Avoided emissions
Green exposure (revenues, capex)• Scope 3 expansion• Green bond carbon reporting• Carbon attribution• Carbon projections• Evaluations and engagement on real-economy emission reductions• Portfolio-level climate solutions measurement• Avoided emission fund reporting• Taxonomy eligibility and alignment evaluation

As of 31 December 2023. Source: PIMCO.

38

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

CASE STUDY:
PIMCO PORTFOLIO CARBON PROJECTION TOOL

For example, the model output displayed in the chart
highlights potential scope 1+2 weighted average carbon
intensity decarbonization paths for the Bloomberg
Global Aggregate Credit Index. The reinvestment of
matured securities can significantly impact the rateof decarbonization for a portfolio and, if well-handled,creates an opportunity to advance a portfolio’s carbon
targets while supporting real-economy emissions
reductions (e.g., by shifting away from climate laggards toissuers implementing a credible transition plan).

CARBON PROJECTIONS ILLUSTRATIVE EXAMPLE BLOOMBERG GLOBAL AGGREGATE CREDIT INDEXBenchmarkScope 1+2 Weighted Average Carbon Intensity(Corp, tCO2e / USDm sales)

To support our forward-looking analysis of transition
risks and portfolio decarbonization targets, PIMCO hasdeveloped a proprietary portfolio carbon projection tool.
Our methodology allows us to produce estimates ofthe potential future carbon emissions associated with aportfolio based on several scenarios and assumptions
specifically relevant for fixed income (e.g., based onreinvestments into bonds from the same issuer or
sector peers, considering issuer’s commitments or their
historical emissions).

Benchmark (no reinvestments)

250
200

39

150
100
50
0

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

Based on scenarios which are not forecasts or predictions. The chart is an illustrative example for the Bloomberg Global Aggregate Credit Index as of 31 December 2023. PIMCO climate and carbon metrics and methodologies may change over time and may
not be comparable to prior period metrics reported. The firm’s proprietary methodologies are not verified by a third-party and may vary from other independent carbon discounting methodologies. PIMCO climate and carbon metrics and methodologies maychange over time and may not be comparable to prior period metrics reported.

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

BIODIVERSITY AND NATURE
The relevance of nature on the global sustainability agenda continues
to increase.
One year after the adoption of theKunming-Montreal Global Biodiversity
Framework (GBF) by 196 governments,
nature related topics gained
unprecedented attention during the 2023
UN Climate Conference (COP28). The
first global stocktake under the Paris
Agreement included explicit referencesand efforts surrounding biodiversity,
deforestation and forest degradation,
nature-based solutions, ecosystems,
oceans, and more. Other developments
this year included the Taskforce on Naturerelated Financial Disclosures (TNFD)
launch of the final set of recommendationsin the form of a risk management anddisclosure framework, as well as the
Network for Greening the Financial System(NGFS) publication of conceptual andtechnical guidance for the development of
nature-related risk scenarios.

Natural capital – such as air, water resources,
soils, raw materials, wildlife, biodiversity, andthe oceans – is entrenched across almost
all aspects of the economy. Companies,
consumers, and governments alike all makeuse of and interact with nature. Similar tonegative trends for climate change, natural
capital is at risk of depletion over the longterm. Given the close link between natureand economic stability, investors and theinternational agenda have increased efforts toassess, mitigate, and/or adapt to nature-relatedrisks. For the past several years, PIMCO has
deepened its research and engagement withcorporate issuers on natural capital related
topics as part of our ESG Assessment andEnvironmental Risk Framework.

40

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

PIMCO’s analytical framework for natural capital
PIMCO has a Natural Capital Framework which builds on proprietary tools andresources to help further integrate these considerations into our investment process.
This framework is supported by nature-related assessments to identify risks andopportunities from impacts (such as externalities or damages to natural capital) anddependencies (such as heavy reliance on natural capital).

• Risks: Heavy reliance on natural capital, typically not reported in corporate financial
statements, can adversely affect businesses if depleted, resulting in physical risks;businesses with high impacts to natural capital might face stricter regulation causingtransition risks.
• Opportunities: Increased data availability across supply chains provides more visibility
per geography/location; differentiation across issuers’ sustainability strategies; andbetter risk assessment.

Bloomberg Global Aggregate Credit Index
Impacts

PIMCO Sectors

Land/Water/
Sea UseChangeResource
Explotation

Climate Change

PIMCO
NatCap score

Dependencies

Pollution

Invasivesand Other

Score

Direct Physical
Input

Enables
Production
Process

Mitigates Direct
Impacts

Protection from
Disruption

Score

Score

Banking
Utilities
Food
Automotive
Total

The table illustrates our proprietary scoring methodology, which examines sectors in the Bloomberg Global Aggregate Credit Index. Our score is comprised of both impacts and dependencies onnature. For impacts, we score sectors under the direct drivers of biodiversity loss identified by the Intergovernmental Science Policy Platform on Biodiversity and Ecosystem Services (IPBES). For
dependencies, we follow ENCORE’s (the UN’s Exploring Natural Capital Opportunities, Risks and Exposure tool), looking at ecosystem services and grouping them by the functions they provide. To
complement the sectorial analysis, we incorporate company-level data and engagement to differentiate between leaders, improvers, and laggards. Ultimately, the goal is to leverage this frameworkand score as part of our ESG assessments, and to inform our investment process.
Source: PIMCO. As of 31 December 2023. ENCORE, Science Based Targets Network, PIMCO. Green indicates minimal impact and dependency, while red implies a high potential impact and dependency. The underlying data builds on a SBTN materiality tool, which relies on the ENCORE database for direct impact of operations, and on EXIOBASE to derive
upstream impact ratings. For dependencies, we incorporate the ENCORE dependency ratings. The sectorial scores do not include downstream ratings. The overall impacts and dependencies scores at sector level are based on the average of their respective thematic pillars scores. The natural capital score is then based on both impacts and dependencies
scores. The portfolio level score is a weighted average of the company scores.

41

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

CASE STUDY:
SOVEREIGN ASSESSMENT OF NATURE-RELATED RISKS
In addition to corporate-related assessments, PIMCO is exploring expanding capabilities
at the (sub) sovereign level on nature-related risks and opportunities. The frameworkaims to inform potential exposure of the underlying economy and industrial structure. For
example, an economy with high concentration in industries with significant reliance onwater availability could be more impacted in the event of water stress and drought. Thisapproach further complements the Environmental pillar score of PIMCO’s proprietary
sovereign quantitative model.

We dissect countries according to their economy and GDP sector composition and overlay
this with the corporate heat-map of impacts and dependencies, to obtain signals in terms ofpotential exposures of sovereign countries to these themes. Our preliminary findings point
to more material nature-related impacts and dependencies for emerging markets than fordeveloped markets.

42
Drivers of Biodiversity Loss

Dependency Category

Impacts

Country

Land/Water/
Sea UseChangeResource
Explotation

Climate Change

PIMCO
NatCap score

Dependencies

Pollution

Invasivesand Other

Score

Direct Physical
Input

Enables
Production
Process

Mitigates
Direct Impacts

Protection from
Disruption

Score

Score

EM LatAm country
EM Asia country
Periphery
Europe country
Developed economy

Source: As of 30 September, 2023. ENCORE, Science Based Targets Network, OECD, PIMCO. Green indicates minimal impact and dependency, while red implies a high potential impact and dependency. The underlying data builds on a SBTN materiality tool, which relies on the ENCORE database for direct impact of operations, and on EXIOBASE to derive
upstream impact ratings. For dependencies, we incorporate the ENCORE dependency ratings. The sectorial scores do not include downstream ratings. We map corporate sectors to OECD data on gross domestic product (GDP) statistics from 2020 with sectorial breakdowns. The natural capital score is then based on both impacts and dependencies scores.

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

Alternative credit andprivate investments
Consistent with PIMCO’s Sustainable Investment
Policy Statement and the firm’s approach to
ESG integration, PIMCO’s alternative credit
and private strategies assess ESG factorsthat may be relevant to potential investment
opportunities. ESG-related risk factors present
both risks and opportunities. Where applicable,
the consideration of ESG factors is intended to
optimize risk-adjusted returns. In this context, we
may consider ESG-related factors as key inputs
to the extent that PIMCO believes such factors
to be relevant to the investment process andthe evaluation of an investment’s risk-adjusted
returns over the long term. This includes but
is not limited to: investment sourcing, due
diligence, asset management & monitoring,and disposition decisions.

43

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

ESG INTEGRATION FOR ALTERNATIVES
ESG factors are considered within the investment research anddecision-making process where relevant.

Due Diligence

Investment Decision

Asset Management
For illustrative purposes only.

Determination of ESG factors and materiality:
PIMCO prioritizes ESG factors that are material to investment risk and return considerations, and/or aredesignated as relevant by specific clients or mandates. PIMCO defines “material” ESG factors as thosedetermined to potentially impact the financial or operating performance of the investment. Furthermore, thedegree of materiality may vary for each ESG factor based upon dynamics specific to a particular investment
including time frame, likelihood of occurrence, and the scale of impact on financial performance during theinvestment period.

ESG research process:Guided by sector-specific ESG factors, sector specialists integrate material ESG considerations into theinvestment due diligence process across relevant transactions, identifying appropriate financial risks/
opportunities and associated risk mitigation measures and/or value-creation opportunities.
PIMCO’s ESG analysts support sector specialists as needed, providing guidance in areas identified during
the due diligence process. For relevant transactions, material ESG considerations, along with relevant KPIs,
are presented in the deal memorandum to the respective Alternatives Investment Committee to facilitate
effective and informed decision making.

44

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

REAL ESTATEPIMCO invests in a variety of real assets includingcommercial, residential, and infrastructure investments.
In addition to the overarching materiality framework which
underpins our alternatives approach, we have developed
specific and proprietary tools for assessing material risks
generally which arise from investing in real assets. This
framework includes specialized research and analysis
related to physical and transition climate risks, energy
usage and efficiency, as well as affordability and access.

45

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

RESEARCH TOOLS, DATA, AND ANALYSIS
Credible data is the foundation for a robust sustainability platform.
As discussed earlier in this report, access to reliable data that is aligned with market bestpractices has historically been one of the biggest challenges to sustainable investing.
At PIMCO, we have developed a scalable, proprietary platform that acts as a central
source for sustainability-related data and analytic requests related to ESG.
Some of the internal tool’s current capabilities include:• Portfolio and risk reporting: allows portfolio managers to efficiently
access portfolio analytics and monitor risk metrics• Client analytics and reporting: designed to provide automatically generated
standardized reporting• Carbon attribution: identifies drivers of performance from a sustainability perspective• Carbon projection: shows potential emissions pathways over a period ofa portfolio based upon assumptions

46

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

ESG SCORING FRAMEWORKS
Over the past decade, PIMCO has leveraged our
deep research expertise to develop proprietary ESG
scoring frameworks across asset classes. Thisenhanced research process incorporates a detailed
ESG assessment that complements the traditional
ratings assigned by analysts, enabling us to evaluate
corporate, sovereign, securitized, and municipal
issuers, as well as green, social, sustainability, andsustainability-linked bond issuances where applicable.
PIMCO assesses the ESG profile of issuers with thegoal of separating leading or improving issuers fromthose less advanced in their sustainability journeys– in addition to analyzing an issuer’s forwardlooking trend to determine how ESG performance ischanging over time.
Analysts review ESG performance based on awide variety of inputs, which can include regular
engagement with executive management. In
determining the efficacy of ESG practices, PIMCO
uses proprietary methods developed and refined inhouse. The resulting assessments are often distinct.
ESG rating methodologies and issuer scores are
updated regularly and made available to portfolio
managers across the firm.

Corporates
Using industry-specific frameworks, analysts review their assigned companies’
ESG-related performance to assign separate scores for “E”, “S”, and “G”, based on
information available in public filings, recent news and controversies, in addition
to regular engagement with company management teams. These scores aresubsequently combined using a weighted average, applying sector-specific weights
across the three pillar scores, resulting in a proprietary ESG score. Furthermore, incases where an investment is made in an issuer's ESG-labeled debt, the issuer's
ESG score may be subject to a positive adjustment depending on the quality of therelevant ESG labeled bond. In determining the efficacy of an issuer’s ESG practices,
PIMCO will use its own proprietary assessments of material ESG issues. The resulting
assessments are proprietary to PIMCO and often distinct from those provided by ESG
rating providers.

Sovereigns
We have developed a standalone ESG scoring framework that provides valuable input

Peer Assessment
Leading Practice

Trend Analysis
Improving

Better Than Peers
In-line With Peers

StableWeaker Than Peers
Significant Concerns

Deteriorating

PIMCO ESG Score
5.0

Leading Practice

4.0

Better Than Peers

3.0

In-line With Peers

2.0

Weaker Than Peers

1.0

Significant Concerns

Valuation
Cheap

into our sovereign risk scenario assessments and serves as an input for relative value
decisions in portfolios that follow sustainability strategies and guidelines.23

Securitized
PIMCO has built robust ESG scoring frameworks across a wide spectrum of

Fair

securitized assets, including both agency and non-agency mortgage-backed
securities, commercial mortgage-backed securities, asset-backed securities, andcollateralized loan obligations.

Rich

Municipals
We consider issuer-level ESG factors across municipal bond issuers to better
understand the risks and opportunities inherent in our bond selections. The municipal

For Illustrative Purposes only. Source: PIMCO

23 Sustainable Strategies are strategies with client-driven sustainability requirements. For these strategies, PIMCO actively incorporates sustainability principles (i.e. excluding issuers fundamentally misaligned withsustainability factors, evaluating issuers using proprietary and independent ESG scoring) consistent with those strategies and guidelines. Further information is available in PIMCO’s Sustainable Investment Policy
Statement. For information about funds that follow sustainability strategies and guidelines, please refer to the fund’s prospectus for more detailed information related to its investment objectives, investment
strategies, and approach to sustainable investment.

market is vast and diverse, with issuers ranging from states and cities, to enterprises
such as higher education institutions, airports, and continuing care facilities. Analysts
use proprietary frameworks to evaluate material ESG risks specific to each municipal
sector, and to identify ESG leaders within each sector.

47

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

PIMCO’S PROPRIETARY ESG BOND SCORING FRAMEWORKIn addition to asset class-specific ESG scoring frameworks, PIMCO also evaluates GSSSlabeled bonds. We map these bonds across a spectrum based on strategic fit, potential
impact, as well as red flags and reporting, to produce PIMCO’s proprietary impact score
for green, social, sustainability, or sustainability-linked bonds. Scoring begins at thetime of issuance and includes continued research coverage to improve the security
selection processes. Ongoing monitoring of GSSS-labeled bonds gives investors a better
understanding of the risks and opportunities inherent in the security, and also allows
comparison of ESG scores between different issuers and across sectors.

Strategic Fit

Impact Assessment

Red Flags and Reporting

Alignment of the issuers’ climate/

Evidence of significant positive

Screening for “red flags” and controversies

environmental/social strategies with theoutcomes compared to “business as

and analysis of reporting and processbond’s objectives and use of proceeds

usual“ by the issuer(misalignments to market standards, e.g.,
Green Bond Principles)

For Illustrative Purposes only. Source: PIMCO48

PIMCO SUSTAINABLE INVESTING REPORT 2023

Engagementin action

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

49

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

ENGAGEMENT DATAAND CASE STUDIES

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

12% Utilities
10% Banking

CORPORATEENGAGEMENTS
BY SECTOR

Construction 3%

47% North America

Europe Non-EMU/Africa 11%
8% Energy

Other 3%Resources

In practice, we engage with issuers on a variety of topics, including improving risk management andoperational efficiency, expanding the GSSS universe, and improving data quality and disclosure. We
believe that our engagement and our sizable active holdings may influence the scope or timing ofissuers’ objectives, as well as the disclosures that they report to investors.

Other 7%
Media 2%
Manufacturing 2%
Industrial Services 2%
Pipelines 3%
Automotive 3%

Fixed Income and Sustainable Investing

CORPORATEENGAGEMENTSBY REGION

6% Raw Materials

Telecom 3%

Europe (EMU) 19%

Insurance 4%
Healthcare 4%
REITs 4%
Food 4%

6% Finance companies
5% Brokerage
5% Technology
4% Transportation

3% South America

Australia 1%

Source: ESG engagement activities by PIMCO analysts, Jan 1-Dec 31, 2023. Other includes retail, entertainment, consumer services, consumer products, EM sovereigns, local governments, developed sovereigns, municipals, mortgages, and other sectors.

Asia 19%50

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

Engagement data
% OF CORPORATE ENGAGEMENTS BY TOPIC
Environment
22%

Air Pollution

Environment

Greenhouse Gas Emissions

Land Use and Biodiversity

Physical Risks
and Resilience

Waste

Water

ESG Bonds
5%
Governance61%

Social12%

51

Board, Management and Ownership

GovernanceBusiness Ethics, Conduct and Culture
Delivery on Business and Balance Sheet Strategy

Risk Management
Transparency and Reporting

Community and Stakeholder Relationships

Product Innovation and Wellness

Human and Labor Rights and Health and Safety
Human Capital Management

Product Safety and Quality
SocialSource: ESG engagement activities by PIMCO analysts, Jan 1 - Dec 31, 2023. Environment, Social and Governance within each pillar refer to engagements that address a combination of topics.

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

CASE STUDY:
AFRICAN MULTILATERAL DEVELOPMENT BANK

Background
PIMCO engaged with the issuer on its sustainability bond issuance in 2021, its company
wide sustainability strategy, and exposure to fossil fuels and climate policy. The issuer has
also been working on several projects in African countries, including a solar power plant, abiomass power plant, an electricity supply hybridization project, a low emission transportsystem, and a hydro-agricultural development.

Engagement
PIMCO discussed building an operational roadmap to identify and report on their green
energy assets and the assets linked to the transition. Additionally, we encouraged the issuer
to align with the Paris Agreement.

Progress to date
The company has updated its environmental policy to reflect its 25% allocation of total bankfinancing to low-carbon and climate-resilient projects.

The example above is presented for illustrative purposes only, as a general example of PIMCO’s ESG research and engagement capability and is not intended
to represent any specific portfolio’s performance or how a portfolio will be invested or allocated at any particular time. PIMCO’s ESG processes may yield different
results than other investment managers’ and a company’s ESG rankings and factors may change over time. Source: PIMCO. All data is as of 31 December 2023,
unless otherwise stated.

52

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

CASE STUDY:EUROPEAN COUNTRY

Background
For the past two years, PIMCO has actively engaged the issuer, suggesting improvements
as part of their green bond framework and clarity on their broader climate strategy. The
issuer also proactively engaged PIMCO on potentially issuing social, sustainability, or
sustainability-linked bonds.

Engagement
PIMCO suggested improvements to the country’s green bond framework, including stricter
selection criteria aligned with EU policies, stronger fossil fuel exclusions, and enhanced
impact reporting. For social bonds, PIMCO emphasized that any issuance should alignwith government policies, be relevant, inclusive, and clearly define and address the needsof vulnerable populations. PIMCO also supported a potential sustainability-linked bondissuance tied to ambitious targets backed by comprehensive policies and sufficienthistorical data, including interim sustainability performance targets, and recommended
step-up in coupons rather than step-down. Finally, we shared PIMCO’s Best PracticeGuidance for Sovereign Sustainable Bond Issuance.

Progress to date
In 2023, the country updated its green bond framework, making changes that wereconsistent with PIMCO's suggestions.

The example above is presented for illustrative purposes only, as a general example of PIMCO’s ESG research and engagement capability and is not intended to represent
any specific portfolio’s performance or how a portfolio will be invested or allocated at any particular time. PIMCO’s ESG processes may yield different results than otherinvestment managers’ and a company’s ESG rankings and factors may change over time. Source: PIMCO. All data is as of 31 December 2023, unless otherwise stated.

53

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

CASE STUDY:EUROPEAN FOOD AND BEVERAGE COMPANY
The company obtained the validation from SBTi of the following target:
reduce absolute scope 1 and 2 GHG emissions 25% by 2030 from a 2020base year• The company also committed to reduce absolute scope 3 GHG emissions 12.5% within thesame timeframe.*• The target boundary includes biogenic emissions and removals from bioenergy feedstock.
• PIMCO shared various best practice recommendations on transition plan, scope 3, physicalrisks, human rights, deforestation, or biodiversity.

54

2021

2022

2023

PIMCO discussed the company's current GHG emissions
reduction targets

The company committed to a 1.5°C aligned SBTi target, with a forthcoming deforestation
policy and advanced AI for supply chain mapping to tackle deforestation risks• This covered scopes 1, 2, and 3, and the ongoing process to get approval for morecomprehensive, science-based targets by the end of 2021.

• Importantly, the company materially increased its transparency on its exposure and actions taken to reduce
deforestation risks in its supply chain, such as engagement with suppliers to trace the coffee sourcing regions.

• PIMCO also highlighted the company's intent to link loan margins to KPIs, theinclusion of ESG KPIs in their debt structure, and their plans to establish abond curve and secure SBTi targets (external validation) before considering
sustainability-linked bonds (SLBs).

• In addition to their FLAG target on green coffee pending SBTi validation, engagement with suppliers has led to
60% of the cost footprint for other critical inputs being certified as SBTi-aligned.
• The company has expanded the scope of its scope 3 disclosure to provide a more complete picture of its carbon
footprint and measures to reduce their footprint.
• Despite a dip in responsibly sourced tea due to a recent acquisition, a program with Rainforest Alliance is on
track to meet the 100% goal by 2025.

The example above is presented for illustrative purposes only, as a general example of PIMCO’s ESG research and engagement capability and is not intended to represent any specific portfolio’s performance or how a portfolio will be invested or allocated at any particular time. PIMCO’s ESG processes may yield different results than other investment
managers’ and a company’s ESG rankings and factors may change over time. Source: PIMCO. All data is as of 31 December 2023, unless otherwise stated.

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Integration, Research, Engagement

Client Focus

Fixed Income and Sustainable Investing

Resources

CASE STUDY:EUROPEAN UTILITY
In 2022, 63% of the company’s gross debt at the end of2022 was sustainability debt

• The company’s installed renewable capacity accounts for 67% of its total
installed capacity.

PIMCO contributed to establishingsustainability-linked bond principles

PIMCO’S ESG andcredit teams engage
with the company• As a member of the ICMA’s Principles Executive Committee,
PIMCO contributed to the drafting of ICMA's SLBP in June
2020 and later coordinated the SLB working group, leading
to the publication of additional best practice resources in
2021 (Q&A, KPI registry).

Based on the strength of theirrenewable energy targets andbroader greenhouse emission
reduction strategy.

• In 2020, the company boosted its 2030 greenhouse gas
emission reduction target from 70% to 80%.

• Energy produced by renewable sources accounted for 49.4% direct
greenhouse gas emissions from power generation (measured in gCO2eq/
kWh) decreased by 37% in 2022 compared to 2017.
• The company’s decarbonization roadmap was certified by the Science Based
Targets initiative (SBTi) as consistent with limiting global warming to 1.5ºC,
hence aligned to the most ambitious temperature goal of the Paris Agreement
adopted by the United Nations in 2015.

55

2017
PIMCO becomes a
member of the PRI SDG
Advisory Committeeand UN Global Compact

As part of this work, PIMCO
discusses the potential for SDGrelated financing structures.

2018

2019

2020

PIMCO anchors the first sustainability-linked bond (SLB) forthe power sector• PIMCO shared comments with the company on the SLB structure and served as
the anchor investor to the deal.
• In 2019, the company’s direct GHG emissions per kWh were reduced by morethan 36% compared to 2007.
• The company launched the world’s first general purpose SDG-linked bonds in
U.S. markets for $1.5 billion and in European markets for €2.5 billion, embedding
its climate strategy into its sustainable finance model.

2021
2021 PIMCO Assumes
Co-Chair of the CFO Coalition
for the SDGs

The coalition pledges to align significant
amounts of investment and financing
towards SDG outcomes, while focusing
on the energy transition.

2022

2023
PIMCO engaged onprogress made inits carbon targets
and challenges

This included thecontribution of the different
drivers, and providing
recommendations on its
sustainability-linked bonds
progress reporting.

• Moreover, the company obtained validation of its greenhouse gas emission
reduction target by the Science Based Targets initiative (SBTi), as consistent withgreenhouse gas reductions required to keep global warming to well below 2°C.

The example above is presented for illustrative purposes only, as a general example of PIMCO’s ESG research and engagement capability and is not intended to represent any specific portfolio’s performance or how a portfolio will be invested or allocated at any particular time. PIMCO’s ESG processes may yield different results than other investment
managers’ and a company’s ESG rankings and factors may change over time. Source: PIMCO. All data is as of 31 December 2023, unless otherwise stated.

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

CASE STUDY:LATIN AMERICAN COUNTRY

Second Quarter: PIMCO’s emerging markets sovereign credit
team engaged issuers on their financing, budget priorities, andtheir pandemic response• The ESG team continued to collaborate with Debt Management Offices (DMOs) to
discuss climate targets/goals and proposals for the upcoming Nationally Determined
Contributions (NDCs) following the first commitments for the Paris Agreement.
• PIMCO also encouraged the government to facilitate a conversation with their NOC
across different ESG areas and especially on their role in the country’s energy transition.

PIMCO engaged the government on theirlabeled bond issuance• This included sharing best practices and recommendations
for their impact and allocation reporting.
• We also encouraged the issuer to consider expanding their
allocation to environmental categories, especially water andrenewable projects.

56

2021
Fourth Quarter: PIMCO launched a collaborative engagementwith the National Oil Company's (NOC) CFO, environmental team,and the country's Finance Ministry• This enabled insights into NOC's approach to energy transition, health and safety,
climate goals, and biodiversity.

2022

2023
The government started to allocate togreen projects
PIMCO continues to provide feedback on theirimpact and allocation reports.

• The discussion focused on NOC's role in the country's energy transition, its targets
and strategy to reduce methane emissions, and health and safety processes.

The example above is presented for illustrative purposes only, as a general example of PIMCO’s ESG research and engagement capability and is not intended to represent any specific portfolio’s performance or how a portfolio will be invested or allocated at any particular time. PIMCO’s ESG processes may yield different results than other investment
managers’ and a company’s ESG rankings and factors may change over time. Source: PIMCO. All data is as of 31 December 2023, unless otherwise stated.

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

CASE STUDY:
U.S. AUTOMOBILE MANUFACTURER

Background
PIMCO engaged with the company’s financial and ESG team (including CFO) to discuss thecompany’s ESG goals and their appetite for sustainable bonds.

Engagement
PIMCO also met with the issuer’s Treasurer alongside the company’s pension team. The
discussion focused on opportunities to further the company’s sustainability strategy
in terms of perception, evaluation, and ratings by asset managers and external parties.
PIMCO discussed climate leader/laggard inputs and considerations, the importance of
science-based targets, materiality for sustainability changes to business plan,and reporting.

Progress to date
Subsequently, the company issued its inaugural green bond, proceeds of which are mainly
used to support its electric vehicles (EVs) strategy. In January 2023, PIMCO engaged withthe company on GHG emissions. In April, PIMCO was happy to see the company’s strong
support for the EPA’s proposed GHG LDV and MDV standard. The company publishedtargets endorsed by SBTi in line with a “Well-below 2°C” scenario (WB2DS) and began
developing their vehicle pathway for 1.5C. PIMCO continues to track progress against their2035 interim target in the report.

The example above is presented for illustrative purposes only, as a general example of PIMCO’s ESG research and engagement capability and is not intended to represent
any specific portfolio’s performance or how a portfolio will be invested or allocated at any particular time. PIMCO’s ESG processes may yield different results than otherinvestment managers’ and a company’s ESG rankings and factors may change over time. Source: PIMCO. All data is as of 31 December 2023, unless otherwise stated.

57

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

CASE STUDY:
U.S. FOOD COMPANY
Background
Investors in this multinational food company collaborated on engagement focused on humanand labor rights in the company’s supply chain, with an emphasis on child labor prevention,transparency, and access to a grievance mechanism and workers representation.

Engagement
PIMCO has recommended that the company strengthen its commitment to human rights andimprove its disclosure practices regarding communications with unions, where applicable.
This approach is aimed at fostering a fair and equitable workplace. The company has also
been encouraged to improve transparency around its grievance mechanisms and to provide
detailed reports on the resolution of grievances. This can demonstrate its proactive stancein addressing workforce concerns, thereby mitigating workforce stoppages and reducing therisk of negative headlines. Additionally, PIMCO recommended that the company evaluate how
broader industry trends like climate change and automation affect its workforce. This forwardthinking approach not only benefits the workforce but also aligns with investors’ interests bysafeguarding the company’s reputation and ensuring its resilience in the face of industry shifts.

Progress to date
In response to child labor risks identified in 2022, the company took decisive steps,
assembling a cross-functional team, revising contracts with sanitation providers to include
audit rights, terminating contracts where child labor was found, and launching an “18+campaign” to combat child labor. They also established a child labor task force and areconsidering support measures for affected children. Further, the company is considering
the broader implications of its business practices, looking to understand and mitigate thesocial impacts of industrywide changes on its workforce, including the potential effects oftechnological advancements and environmental challenges.
The example above is presented for illustrative purposes only, as a general example of PIMCO’s ESG research and engagement capability and is not intended to represent
any specific portfolio’s performance or how a portfolio will be invested or allocated at any particular time. PIMCO’s ESG processes may yield different results than otherinvestment managers’ and a company’s ESG rankings and factors may change over time. Source: PIMCO. All data is as of 31 December 2023, unless otherwise stated.

58

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

CASE STUDY:
U.S. TELECOMMUNICATIONS PROVIDER

BackgroundA major player in the communications industry, the company has a large workforce and iscommitted to diversity and inclusion for its employee base.

Engagement
PIMCO has held multi-year engagements with the issuer on a variety of sustainability
topics, including the company’s climate strategy, balance sheet strategy, human capitalcommitments and best practices for ESG labeled bond issuance. Most recently, discussions
have centered on social and governance issues that are material to the sector related tolabor and workforce management, such as diversity, inclusion, and labor relations, as well as
data privacy and security. PIMCO recommended greater transparency related to workforce
breakdown and linking ESG metrics with executive compensation, as well as incorporating
the company’s workforce management approach in its upcoming sustainability report.

Progress to date
The company enhanced disclosure related to their diversity and inclusion policy, including theaddition of workforce breakdown by position, gender and ethnicity. The improved disclosures
are in line with PIMCO recommendations for best practices.

The example above is presented for illustrative purposes only, as a general example of PIMCO’s ESG research and engagement capability and is not intended to represent
any specific portfolio’s performance or how a portfolio will be invested or allocated at any particular time. PIMCO’s ESG processes may yield different results than otherinvestment managers’ and a company’s ESG rankings and factors may change over time. Source: PIMCO. All data is as of 31 December 2023, unless otherwise stated.

59

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

CASE STUDY:
U.S. UTILITY
PIMCO held engagements with the company
on physical risk and visited the company
at one of its sites where undergrounding
distribution work was being undertaken
The company pleaded
guilty in the Camp Fire case

• PIMCO made recommendations on climate vulnerability
assessment. PIMCO also held discussions with MSCI
regarding their methodology.

Following its exit from bankruptcy,
the company conducted asystem-wide climate vulnerability
assessment and started setting
climate adaptation targets.

In November, the company
service areas experienced
the second deadliest
wildfire in U.S. history• Subsequent to PIMCO’s involvement, the company met
its climate resilience targets and committed to future
multi-year targets, and MSCI removed its “Fail” UN Global
Compact status on the issuer.

60

2018

2019
In December, the CPUC (California
Public Utility Commission) concluded
that the company is responsible
for the wildfire due to failure inmaintaining power line safety• Facing billions of potential liabilities, thecompany filed for bankruptcy in January, andthe CEO at the time stepped down.
• MSCI also issued a “Fail” status for the issuer
on UN Global Compact.

2020

2021
The company
appointed a new CEO
PIMCO engaged with thecompany on the statusof safety certification andoperational enhancement.

2022

2023
The company issued its firstsustainability bond with partof the proceeds dedicated toclimate change adaptation
PIMCO continued the discussion with
the issuer and made recommendations
on climate adaptation as the company
continued to strengthen climate
resilience and rebuild its financial
strength and reputation.

The example above is presented for illustrative purposes only, as a general example of PIMCO’s ESG research and engagement capability and is not intended to represent any specific portfolio’s performance or how a portfolio will be invested or allocated at any particular time. PIMCO’s ESG processes may yield different results than other investment
managers’ and a company’s ESG rankings and factors may change over time. Source: PIMCO. All data is as of 31 December 2023, unless otherwise stated.

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

THEMATIC ENGAGEMENTOIL & GAS SECTOR:~700 ENGAGEMENTS SINCE 2020

Methane emissions abatement in oil and gas production

Rationale

Approach

Outcomes

Methane emissions can put both invested capital and the climate at• Routine engagements with:•risk. These emissions could be costly for U.S. producers under new
regulation domestically and abroad. Methane emissions jeopardize thestatus of gas as a cleaner energy source than coal, which, in turn, may
limit access to global gas export markets. The IEA estimates ~40%of methane emissions from fossil fuel operations could have been
avoided at no net cost in 2023. The IEA further states that a 75% cut inmethane from fossil fuel operations by 2030 may limit global warming
to 1.5 °C. Limiting warming should reduce the effects of climate
physical risks, including severe weather event impacts to infrastructure• EPA/Regulators

27 portfolio companies have committed to thehighest ambition for measurement (OGMP).

• CFO/Treasurer/ESG staff• Subject Matter Experts

Resources•

Comment letter to the EPA helped to shapemeasurement and reporting requirements in a way
which benefits investors, issuers and environment.

• We encourage the following:61• Set methane reduction targets

and changing weather patterns on agriculture, among others.

• Improve measurement and reporting

Source: https://www.iea.org/reports/global-methane-tracker-2024/methane-emissions-in-a-15-0c-pathway• Commit to the Oil & Gas Methane Partnership (OGMP)PIMCO at COP28 in Dubai•

On the stage and in meeting rooms, PIMCO’s delegation engaged on the topic of methane emission reductions for the oil and gas sector.

•

Speaking with scientists, asset allocators, national oil companies, international oil companies, structuring agents and the general audience,
we discussed the extent to which debt capital markets may play a role in scaling funding for methane abatement projects, while
keeping within a 1.5 degree pathway.
PIMCO’S Global Head of Commodities joins National and

The example above is presented for illustrative purposes only, as a general example of PIMCO’s ESG research and engagement capability and is not intended to represent any specific portfolio’s performance or how a portfolio will be invested
or allocated at any particular time. PIMCO’s ESG processes may yield different results than other investment managers’ and a company’s ESG rankings and factors may change over time. Source: PIMCO. All data is as of 31 December 2023, unlessotherwise stated.

International Oil Company CEOs on a panel during “EnergyDay” at COP28 to discuss the need for methane abatement forthe sector.

PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Fixed Income andSustainable Investing
Sustainable economic
activities

The role of fixedincome in sustainable
investing

Resources

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

SUSTAINABLE ECONOMIC ACTIVITIESA forward-looking approach to capturing thematic and secular trends
Central to our view of sustainability is that investors seeking
to finance improved environmental, social, and economic
outcomes should employ the use of forward-looking
signposts and indicators to channel capital to issuers withgrowing momentum toward delivering sustainable gains.
At PIMCO, we view this approach as investing insustainable economic activities, including both the energy
transition and reducing global systemic inequalities.
More specifically, we believe investors seeking to makepositive – and equitable – sustainability gains may
consider investments in:
1. Dedicated instruments, such as green, social,sustainability, and sustainability-linked bonds
2. Issuers that derive revenues from environmentally andsocially sustainable business models and end-markets
3. Issuers with strong sustainability track records andthose with ambitious and authentic targets to achieve
improvement in sustainable operations
4. Issuers with linkages to emerging and frontier markets at
various stages of their sustainability transition, as well
as issuers in high-income countries that have achieved
environmental and social leadership

The volume and complexity of regulations, standards,
and methodologies that govern sustainability criteria
continue to grow, improve, and deepen as issuers
globally make progress. To help build consensus andwork toward global targets, forward looking analysis
is required to identify securities from issuers who are
deepening their commitment to sustainable economic andenvironmental growth across asset classes. At the centerof our sustainable development screening is the view that
equitable, sustainable development gains must include
investing in issuers with links to emerging and frontiermarkets at various stages of their sustainability transition,
as well as issuers in high-income countries that haveachieved environmental and social leadership.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

MARKET LEADER PURSUING INFLUENCEAND SUSTAINABLE CHANGE
PIMCO aims to be a leader inproviding solutions to the global
movement of investors seeking
to align with the SDGs.

PIMCO Chairs GISD’s Outreach and Engagement Working Group; CEO Involvement• Goal is to develop strategic policy recommendations and tools to increase global investment towards the
SDGs in ways that deliver investment returns and positive environmental and social outcomes.

PIMCO Global Head of Credit Research Co-Chairs UN Global Compact Initiative• Aims to mobilize 1000 corporate CFOs to increase SDG-oriented investment and financing, by 2025.
• CFO Coalition interactions allow PIMCO to directly dialogue with leading global companies that arecommitted to SDG-aligned investment and financing.

PIMCO invited by UNDP’s Under-Secretary-General to join the SDG Impact Steering Committee in 2021
• PIMCO gains deep insights into the UN’s work and activities vis-à-vis national sustainable
development strategies.
• PIMCO is a member of a new working group advancing a special initiative on sovereign SDG Bonds.

PIMCO Chief of Sustainable Development member of U.S. Network Board• The U.S. Network Board strategizes on pathways to advance corporate sustainability within the U.S. business
community, while also exchanging learnings and lessons with the UNGC’s 70+ national networks.

PIMCO has been a signatory of the PRI since 2011; actively involved several working groups:• Co-Chair, PRI’s SDG Advisory Committee.
• Member of PRI’s Sovereign Debt Committee.
• Member of PRI’s Human Rights Working Group and “Advance” Initiative.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Integration, Research, Engagement

Client Focus

Fixed Income and Sustainable Investing

Resources

THE ROLE OF FIXED INCOME IN SUSTAINABLE INVESTING
Analytical capabilities and tools
PIMCO’s deep fixed income expertise applies to the analysis of GSSS
labeled bonds. We track market technicals and relative value to unveil
potential investment signals for our portfolios. For example, we havea proprietary relative value tracker; on a daily basis this evaluates thediscount or premium (also known as “greenium”) between ESG labels andtraditional bonds across corporate, sovereign, and securitized markets.
We also expanded the model to capture the relative value difference
across issuers based on sustainability characteristics, including theirclimate commitments, carbon emissions intensity, and ESG scores.

SHARE OF ESG ISSUERS AND PERCENT MARKET VALUE (PMV) GSSS BONDS

In terms of market structure, on a weekly basis, we closely monitor new
issuance and secondary market trends. By doing so, we can dissect how the
ESG labeled bond market is developing. For instance, while 2021 remains
the year with the largest absolute volume of ESG labeled bond issuance, we
complement the absolute analysis by also examining activity on a relativebasis and in the context of the outstanding investment universe. As a result,despite the lower absolute issuance in 2022 and 2023, we see a continuous
increase in the ESG representative share within corporate fixed income
indices. Moreover, we also expect a marginally larger share of traditionalbonds exiting some fixed income indices this year, versus GSSS labeledbonds, which speaks to an additional factor that potentially increases the
ESG representative share within fixed income indices.

US IG - issuers (left axis)
US IG - ESG pmv (right axis)

EU IG - issuers (left axis)
EU IG - ESG pmv (right axis)

As of 31 December 2023. Source: PIMCO, ICE indices. US IG refers to the ICE BofA US Corporate Bond Index (C0A0), and EU IG refers to the ICE BofA EMU Corporate (ER00).

12/23

10/23

08/23

06/23

04/23

02/23

12/22

10/22

08/22

06/22

04/22

02/22

12/21

10/21

08/21

06/21

0%
04/21

0%
02/21

5%

12/20

10%

10/20

10%

08/20

20%

06/20

15%

04/20

30%

02/20

20%

12/19

40%

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

CASE STUDY:SUSTAINABILITY-LINKED BONDS TRACKER

Sustainability-linked bonds (SLBs) are an exciting portion of
the ESG labeled bond universe. They fund the operationsof issuers that explicitly link sustainability objectives acrosstheir business with financing conditions, which in turncan have investment implications based on the potential
additional compensation in the form of coupon stepups. PIMCO has developed a proprietary SLB tracker toevaluate, on a periodic basis, those outstanding bonds thathave an upcoming Key Performance Indicator (KPI) testingdate on the potential of coupon step-ups and relative value
across the investment universe. This tool is critical toportfolio managers, as a growing portion of outstanding
SLBs approach deadlines for their sustainability KPIs,
potentially triggering coupon step-ups.
However, GSSS bonds are only one part of the ESGinvestible universe, as many issuers with favorable ESG
profiles continue to issue traditional debt. For PIMCO, thismeans that we will continue to maintain a balanced focus
on communication and research for conventionalbond investment.

SUSTAINABILITY-LINKED BONDS (SLBs) WITH A Q4 2023 / Q1 2024 TARGET DATE (ILLUSTRATIVE)
IssuerNo. of SLBs

Sustainability Performance Targets and Target Year

Utility A

10

GHG Emissions Intensity (Scope 1): g/KWheq by Dec. 2023

Investment firm B

1

SBTi validation: 100% validation for portfolio companies by Dec. 2023
Workplace Gender Diversity: 28% by Dec. 2026
Female Representation on Board of Portfolio Companies: 36% by Dec. 2026

Automotive C

2

GHG Emissions (Scope 1, 2): 80% absolute emissions reduction by Dec. 2025
GHG Emissions Intensity (Scope 1, 2): 20% reduction by Dec. 2023

Utility D

1Water Usage Intensity: 168 m3/yr./subscriber by Dec. 2023
GHG Emissions Intensity (Scope 1, 2): 24 tCO2eq./M€ by Dec. 2023

Basic Materials E

1Sulphuric Oxide Emissions: 44% reduction by Dec. 2023

Utility F

1

GHG Emissions (Scope 1): 57% reduction by Dec. 2023

Capital goods G

2

GHG Emissions (Scope 1, 2): 23.7% reduction by Dec. 2023
GHG Emissions Intensity (Scope 3: Use of Sold Products): 23% reduction by 2023

Beverage H

2

Recycled Plastic Input Proportion: increase to 20% by December 2023

Real Estate I

1

GHG Emissions (Scope 1, 2): 20% reduction by Mar. 2024
Average SAP score for Energy Efficiency: at least 72 by Mar. 2024
Affordable Housing Construction: 4,000 by Mar. 2024

* Progress is calculated as: (baseline value – recent performance data)/ (baseline value – expected value in target year). For illustrative purposes only.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

Resources
Related documents

Education• Global TCFD Report• Understanding Green, Socialand Sustainability Bonds• PIMCO Statement on Human Rights• Corporate Sustainability Report 2023

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

The information contained herein is as of December 31, 2023 unless otherwise noted.
This report contains examples of the firm’s internal ESG engagement and research capabilities. The data contained within the report may be stale and should not be relied upon
as investment advice or a recommendation of any particular security, strategy or investment product. In selecting case studies, PIMCO considers multiple factors, including, but
not limited to, whether the example illustrates the particular investment strategy being featured and processes applied by PIMCO to making investment decisions. Information
contained herein has been obtained from sources believed to be reliable, but not guaranteed.
Environmental (“E”) factors can include matters such as climate change, pollution, waste, and how an issuer protects and/or conserves natural resources. Social (“S”) factors
can include how an issuer manages its relationships with individuals, such as its employees, stakeholders, customers and its community. Governance (“G”) factors can include
how an issuer operates, such as its leadership, pay and incentive structures, internal controls, and the rights of equity and debt holders.
Sustainable Strategies are strategies with client-driven sustainability requirements. For these strategies, PIMCO actively incorporates sustainability principles (i.e. excluding
issuers fundamentally misaligned with sustainability factors, evaluating issuers using proprietary and independent ESG scoring) consistent with those strategies and guidelines.
Further information is available in PIMCO’s Sustainable Investment Policy Statement. For information about funds that follow sustainability strategies and guidelines, pleaserefer to the fund’s prospectus for more detailed information related to its investment objectives, investment strategies, and approach to sustainable investment.
There is no assurance that the socially responsible investing strategy and techniques employed will be successful.
All investments contain risk and may lose value. Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity
risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive andvolatile than those with shorter durations; bond prices generally fall as interest rates rise, and low interest rate environments increase this risk. Reductions in bond counterparty
capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed.
Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may beenhanced in emerging markets. Mortgage and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and their value may
fluctuate in response to the markets perception of issuer creditworthiness; while generally supported by some form of government or private guarantee there is no assurance
that private guarantors will meet their obligations. High-yield, lower-rated, securities involve greater risk than higher-rated securities; portfolios that invest in them may
be subject to greater levels of credit and liquidity risk than portfolios that do not. Equities may decline in value due to both real and perceived general market, economic,
and industry conditions. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be
closed when most advantageous. Investing in derivatives could lose more than the amount invested. Private credit involves an investment in non-publically traded securities
which may be subject to illiquidity risk. Portfolios that invest in private credit may be leveraged and may engage in speculative investment practices that increase the riskof investment loss. Structured products such as Collateralized Debt Obligations (CDOs), Constant Proportion Portfolio Insurance (CPPI), and Constant Proportion Debt
Obligations (CPDOs) are complex instruments, typically involving a high degree of risk and intended for qualified investors only. Use of these instruments may involve derivative
instruments that could lose more than the principal amount invested. The market value may also be affected by changes in economic, financial, and political environment(including, but not limited to spot and forward interest and exchange rates), maturity, market, and the credit quality of any issuer. Diversification does not ensure against loss.
Management risk is the risk that the investment techniques and risk analyses applied by an investment manager will not produce the desired results, and that certain policies
or developments may affect the investment techniques available to the manager in connection with managing the strategy.

Client Focus

Integration, Research, Engagement

Fixed Income and Sustainable Investing

Resources

ESG investing is qualitative and subjective by nature, and there is no guarantee that the factors utilized by PIMCO or any judgment exercised by PIMCO will reflect theopinions of any particular investor, and the factors utilized by PIMCO may differ from the factors that any particular investor considers relevant in evaluating an issuer’s ESG
practices. In evaluating an issuer, PIMCO is dependent upon information and data obtained through voluntary or third-party reporting that may be incomplete, inaccurate orunavailable, or present conflicting information and data with respect to an issuer, which in each case could cause PIMCO to incorrectly assess an issuer’s business practices
with respect to its ESG practices. Socially responsible norms differ by region, and an issuer’s ESG practices or PIMCO’s assessment of an issuer’s ESG practices may changeover time. There is no standardized industry definition or certification for certain ESG categories, for example “green bonds”; as such, the inclusion of securities in thesestatistics involves PIMCO’s subjectivity and discretion. There is no assurance that the ESG investing strategy or techniques employed will be successful. Past performance is
not a guarantee or reliable indicator of future results.
PIMCO’s credit research analysts assess the Environmental, Social, and Governance (“ESG”) profile of corporate, municipal, and sovereign issuers relative to peer issuers with a goalof separating leaders from laggards. Using industry specific ESG frameworks, analysts review issuers’ ESG performance based on information available in public filings, recent ESG
news and controversies, as well as through engagement with company management teams. Analysts assign three separate numerical scores from 1 to 5 (with 5 being the highest)
to their environmental, social and governance-based business practices. The score in each category is related to an issuer’s rank relative to industry peers, and the relative weightsof the E, S, and G scores in the composite score vary based on industries, as each industry is assigned a different factor weight. For example, the environmental category has thegreatest weight for issuers in extractive industries (e.g., oil, gas, and mining), the social category has the greatest weight for pharmaceutical issuers, and the governance category
has the greatest weight for financial issuers. Analysts also include a forward-looking ESG trend assessment, which recognizes companies whose ESG performance is significantly
improving or deteriorating. These factors are combined to create a proprietary composite ESG issuer score.
PIMCO’s credit research analysts also assess green, social, sustainability, and sustainability-linked bonds (collectively “ESG bonds”) at an issuance level, including prior toand after issuance. Utilizing PIMCO’s proprietary ESG Bond Framework assessment, credit analysts evaluate such instruments starting with the strategic fit, assessing thealignment of the issuers’ ESG-related strategies with the bond’s objectives and use of proceeds, key performance indicators (KPIs), and the evidence of significant positive
impact of the activities compared to “business as usual”. We continuously screen for “red flags” and controversies through this process and assess the degree of reporting by
the issuer to analyze misalignment with key market standards, such as the Green Bond Principles. These factors result in a proprietary ESG bond score ranging from 1 to 5
(with 5 being the highest). PIMCO does not score all ESG bonds. Unassessed ESG bonds receive a default score of 3. ESG bonds holdings in PIMCO portfolios are then assigned
a score that combines the issuer’s ESG score and the ESG bond score. Specifically, an ESG bond holding receives the ESG issuer score plus an adjustment ranging from 0 up to
1.0 point, depending on the type of ESG bond (use of proceeds or sustainability-linked) and the quality of the ESG bond according to PIMCO’s proprietary assessment. Holdingsof securitized ESG bond issuances (asset-backed securities, collateralized loan obligations, collateralized mortgage obligations, collateralized debt obligations, and mortgage
pass through securities) receive the ESG issuer score and are not adjusted.
We use MSCI and other third-party ratings for reference but make our own assessment based on our own, independent analysis of the industry and relevant ESG factors.
PIMCO’s resulting assessments are proprietary and distinct from those provided by ESG rating providers. Inclusion of a proprietary PIMCO ESG rating creates a conflict ofinterest because PIMCO and its affiliates benefit when PIMCO assigns a particular security a high score or assigns a benchmark index or security a low score.
Weighted Average Carbon Intensity is intended to reflect how an issuer’s greenhouse gas (GHG) emissions (expressed as tonnes of CO2 equivalent (tCO2e)) compares to its
overall revenues. The carbon intensity of the securities portfolio is defined as the weighted average carbon emissions (Scope 1 + Scope 2 emissions tCO2e))/Revenues in USDof corporate bond holdings only in the portfolio (for issuers with available data). Absolute carbon emission analysis takes the total emission per issuer into consideration. PIMCO
applies emissions values of the parent to subsidiaries where MSCI data is not available. As defined by the U.S. Environmental Protection Agency (EPA), Scope 1 emissions
are direct GHG emissions that occur from sources owned or controlled by a company (for example, company vehicles and facilities), and Scope 2 emissions are indirect GHG
emissions from the purchase of electricity, steam, heating or cooling. Data used by PIMCO to calculate carbon intensity is (i) sourced from MSCI based on data reported bycompanies, a company specific model, or an industry specific model (MSCI’s methodology is available here: https://www.msci.com/index-carbon-footprint-metrics), or (ii)estimated by PIMCO for “use of proceeds” bonds not covered by MSCI(green and sustainability bonds). PIMCO’s estimates generally apply absolute emissions of the issuer’s
parent company/companies to its subsidiaries.

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PIMCO SUSTAINABLE INVESTING REPORT 2023

Introduction

Sustainability at PIMCO

Carbon Discounting Methodology: In its calculation of carbon metrics for ESG labeled bonds, PIMCO applies a proprietary carbon discounting methodology which generally can
include the consideration of: i) publicly available information disclosed by an issuer/ company, ii) third-party data sources, and/ or iii) internal proprietary assessments, as applicable.
Green bonds and sustainability bonds issued by select electric utility companies adjust a company’s carbon metrics by subtracting at a proportion equal to the contribution ofeligible renewable energy projects to the proceeds allocation (i.e. the portion allocated to renewable energy projects are treated as having zero carbon emissions and, therefore, zerocarbon intensity). For green or sustainability bonds where proceeds are allocated to eligible green or social projects other than renewable energy or are issued by companies in nonelectric utility sectors, carbon metrics are directly passed through from the company level to these bonds with no adjustments. To the extent possible, PIMCO utilizes an issuer’s
public disclosure, such as post-issuance allocation report, when calculating the allocation of proceeds to renewable energy projects. In some cases, PIMCO may leverage thirdparty data to source such information. In the case of absent or incomplete disclosure, PIMCO uses several assumptions to estimate the allocation of proceeds to renewable energy
projects for the respective utility sector, such as the potential allocation split across eligible green projects communicated by the issuer or the average allocation to renewable energy
for the industry. PIMCO climate and carbon metrics and methodologies may change over time and may not be comparable to prior period metrics reported. The firm’s proprietary
methodologies are not verified by a third-party and may vary from other independent carbon methodologies.
Carbon Footprint refers to the calculation of the total GHG emissions (scope 1 and scope 2) of corporates in the portfolio normalized by the bond exposure of corporates in theportfolio and expressed as a carbon dioxide equivalent. Statements concerning financial market trends or portfolio strategies are based on current market conditions, which willfluctuate. There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all investors and each investor should evaluate theirability to invest for the long term, especially during periods of downturn in the market. Outlook and strategies are subject to change without notice. Investors should consult
their investment professional prior to making an investment decision.
The issuers referenced are examples of issuers PIMCO considers to be well known and that may fall into the stated sectors. References to specific issuers are not intended andshould not be interpreted as recommendations to purchase, sell, or hold securities of those issuers. PIMCO products and strategies may or may not include the securities of theissuers referenced and, if such securities are included, no representation is being made that such securities will continue to be included.
It is not possible to invest directly in an unmanaged index.
This material contains the current opinions of the manager, and such opinions are subject to change without notice. This material is distributed for informational purposes onlyand should not be considered as investment advice or a recommendation of any particular security, strategy, or investment product. Information contained herein has beenobtained from sources believed to be reliable, but not guaranteed.
PIMCO as a general matter provides services to qualified institutions, financial intermediaries and institutional investors. Individual investors should contact their own financial
professional to determine the most appropriate investment options for their financial situation. This is not an offer to any person in any jurisdiction where unlawful or unauthorized.
| Pacific Investment Management Company LLC, 650 Newport Center Drive, Newport Beach, CA 92660 is regulated by the United States Securities and Exchange Commission.
| PIMCO Europe Ltd (Company No. 2604517, 11 Baker Street, London W1U 3AH, United Kingdom) is authorised and regulated by the Financial Conduct Authority (FCA) (12Endeavour Square, London E20 1JN) in the UK. The services provided by PIMCO Europe Ltd are not available to retail investors, who should not rely on this communication but
contact their financial adviser. | PIMCO Europe GmbH (Company No. 192083, Seidlstr. 24-24a, 80335 Munich, Germany), PIMCO Europe GmbH Italian Branch (Company No.
10005170963, via Turati nn. 25/27 (angolo via Cavalieri n. 4), 20121 Milano, Italy), PIMCO Europe GmbH Irish Branch (Company No. 909462, 57B Harcourt Street Dublin D02
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Paseo de la Castellana 43, Oficina 05-111, 28046 Madrid, Spain) and PIMCO Europe GmbH French Branch (Company No. 918745621 R.C.S. Paris, 50–52 Boulevard
Haussmann, 75009 Paris, France) are authorised and regulated by the German Federal Financial Supervisory Authority (BaFin) (Marie- Curie-Str. 24-28, 60439 Frankfurt am Main)in Germany in accordance with Section 15 of the German Securities Institutions Act (WpIG). The Italian Branch, Irish Branch, UK Branch, Spanish Branch and French Branch are
additionally supervised by: (1) Italian Branch: the Commissione Nazionale per le Società e la Borsa (CONSOB) (Giovanni Battista Martini, 3 - 00198 Rome) in accordance with Article

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27 of the Italian Consolidated Financial Act; (2) Irish Branch: the Central Bank of Ireland (New Wapping Street, North Wall Quay, Dublin 1 D01 F7X3) in accordance with Regulation 43of the European Union (Markets in Financial Instruments) Regulations 2017, as amended; (3) UK Branch: the Financial Conduct Authority (FCA) (12 Endeavour Square, London E20
1JN); (4) Spanish Branch: the Comisión Nacional del Mercado de Valores (CNMV) (Edison, 4, 28006 Madrid) in accordance with obligations stipulated in articles 168 and 203 to 224,
as well as obligations contained in Tile V, Section I of the Law on the Securities Market (LSM) and in articles 111, 114 and 117 of Royal Decree 217/2008, respectively and (5) French
Branch: ACPR/Banque de France (4 Place de Budapest, CS 92459, 75436 Paris Cedex 09) in accordance with Art. 35 of Directive 2014/65/EU on markets in financial instruments
and under the surveillance of ACPR and AMF. The services provided by PIMCO Europe GmbH are available only to professional clients as defined in Section 67 para. 2 German
Securities Trading Act (WpHG). They are not available to individual investors, who should not rely on this communication. | PIMCO (Schweiz) GmbH (registered in Switzerland,Company No. CH-020.4.038.582-2, Brandschenkestrasse 41 Zurich 8002, Switzerland). The services provided by PIMCO (Schweiz) GmbH are not available to retail investors,
who should not rely on this communication but contact their financial adviser. | PIMCO Asia Pte Ltd (8 Marina View, #30-01, Asia Square Tower 1, Singapore 018960, Registration
No. 199804652K) is regulated by the Monetary Authority of Singapore as a holder of a capital markets services licence and an exempt financial adviser. The asset management
services and investment products are not available to persons where provision of such services and products is unauthorised. | PIMCO Asia Limited (Suite 2201, 22nd Floor, TwoInternational Finance Centre, No. 8 Finance Street, Central, Hong Kong) is licensed by the Securities and Futures Commission for Types 1, 4 and 9 regulated activities under the
Securities and Futures Ordinance. PIMCO Asia Limited is registered as a cross-border discretionary investment manager with the Financial Supervisory Commission of Korea(Registration No. 08-02-307). The asset management services and investment products are not available to persons where provision of such services and products is unauthorised.
| PIMCO Investment Management (Shanghai) Limited. Office address: Suite 7204, Shanghai Tower, 479 Lujiazui Ring Road, Pudong, Shanghai 200120, China (Unified social credit
code: 91310115MA1K41MU72) is registered with Asset Management Association of China as Private Fund Manager (Registration No. P1071502, Type: Other). | PIMCO Australia Pty
Ltd ABN 54 084 280 508, AFSL 246862. This publication has been prepared without taking into account the objectives, financial situation or needs of investors. Before making an
investment decision, investors should obtain professional advice and consider whether the information contained herein is appropriate having regard to their objectives, financial
situation and needs. To the extent it involves Pacific Investment Management Co LLC (PIMCO LLC) providing financial services to wholesale clients, PIMCO LLC is exempt from therequirement to hold an Australian financial services licence in respect of financial services provided to wholesale clients in Australia. PIMCO LLC is regulated by the Securities andExchange Commission under US laws, which differ from Australian laws. | PIMCO Japan Ltd, Financial Instruments Business Registration Number is Director of Kanto Local
Finance Bureau (Financial Instruments Firm) No. 382. PIMCO Japan Ltd is a member of Japan Investment Advisers Association, The Investment Trusts Association, Japan andType II Financial Instruments Firms Association. All investments contain risk. There is no guarantee that the principal amount of the investment will be preserved, or that a certain
return will be realized; the investment could suffer a loss. All profits and losses incur to the investor. The amounts, maximum amounts and calculation methodologies of each typeof fee and expense and their total amounts will vary depending on the investment strategy, the status of investment performance, period of management and outstanding balanceof assets and thus such fees and expenses cannot be set forth herein. | PIMCO Taiwan Limited is an independently operated and managed company. The reference number ofbusiness license of the company approved by the competent authority is (112) Jin Guan Tou Gu Xin Zi No. 015 . The registered address of the company is 40F., No.68, Sec. 5,
Zhongxiao East Rd., Xinyi District, Taipei City 110, Taiwan (R.O.C.), and the telephone number is +886 2 8729-5500. | PIMCO Canada Corp. (199 Bay Street, Suite 2050, Commerce
Court Station, P.O. Box 363, Toronto, ON, M5L 1G2) services and products may only be available in certain provinces or territories of Canada and only through dealers authorized forthat purpose. | Note to Readers in Colombia: This document is provided through the representative office of Pacific Investment Management Company LLC located at Carrera 7
No. 71-52 TB Piso 9, Bogota D.C. (Promoción y oferta de los negocios y servicios del mercado de valores por parte de Pacific Investment Management Company LLC, representada
en Colombia.). Note to Readers in Brazil: PIMCO Latin America Administradora de Carteiras Ltda.Av. Brg. Faria Lima, 3477 Itaim Bibi, São Paulo - SP 04538-132 Brazil. Note toReaders in Argentina: This document may be provided through the representative office of PIMCO Global Advisors LLC AVENIDA CORRIENTES, 299, Buenos Aires, Argentina.
| No part of this publication may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz AssetManagement of America LLC in the United States and throughout the world. ©2024, PIMCO.
NOTE TO READERS BASED IN CANADA: This material is for institutional investor use only - not for public distribution. The materials contained herein are provided
for informational purposes only and are not “sales communications”, as defined in NI 81-102. They may not, under any circumstances, be used in relation to, or inconnection with, the promotion of any NI 81-102 fund in Canada.

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