ESG at PIMCO

We believe the size of bond markets and recurring nature of debt issuance make fixed income investors a meaningful force in driving sustainable change.

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PIMCO ESG Funds

Find sustainable fixed income strategies with PIMCO's range of ESG investing funds.

Our Industry-Leading Approach

Time tested: Our active ESG investment process takes the same rigorous approach applied to all PIMCO portfolios a step further by also pursuing sustainability objectives.

A+ PRI Ratings (2018, 2019, and 2020): PIMCO is committed to the integration of ESG factors in our investment process and we scored A+ across all Fixed Income categories in our Annual UNPRI Assessment Report.

Innovative strategies: Our Climate Bond Strategy was awarded ESG investment of the year for fixed income in 2020.

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PIMCO’s ESG Capabilities

We Aim to Be a Leader in ESG Fixed Income Investing

$642B

Sustainable Investment Assets under management

Over 80%

of holdings of corporate bond issuers engaged on ESG

A+

PRI Assessment Score (2018, 2019, and 2020) across all Fixed Income categories

Source: PIMCO. As of 9/30/2021

Sustainable Impact

By investing in PIMCO's Climate Bond Fund as compared to the Bloomberg Global Aggregate Credit Index (USD Hedged), your potential impact could be:

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11x

More green, social, and other impact bonds than the index

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67%

Reduction in carbon intensity compared to the index

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100%

Renewable energy-based utilities sector holdings

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86%

Engagement with corporate issuers in the Fund

PIMCO Climate Bond Fund is being compared to the Bloomberg Global Aggregate Credit Index (USD Hedged) as a well-known broad based bond index, to illustrate the Funds positive Environmental impact over a non-ESG broad market. The PIMCO Climate Bond Fund is benched to Bloomberg MSCI Green Bond Index. The index may materially vary from the composition of the portfolio. It is not possible to invest directly in an unmanaged index.

Source: PIMCO. As of 9/30/2021

ESG Report and Policy Statement

Annual ESG Investing Report

Case studies of engagement with bond issuers, industry groups, and clients

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ESG Investment Policy Statement

PIMCO’s approach to considering material ESG factors in bond markets

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More Resources

ESG Bonds 101

An educational overview of the ESG Bond market including green, social, and sustainability-linked bonds

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Corporate Responsibility Report

Annual update on PIMCO’s progress in the critical areas of sustainability and corporate responsibility

Learn More

Guidance for Sustainable Bond Issuance

PIMCO’s ESG portfolio management team outlines best practices for issuers of green, social, sustainability or sustainability-linked bonds

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Disclosures

Investors should consider the investment objectives, risks, charges and expenses of the funds carefully before investing. This and other information are contained in the fund's prospectus and summary prospectus, if available, which may be obtained by contacting your investment professional or PIMCO representative or by visiting www.pimco.com. Please read them carefully before you invest or send money.

* PIMCO Climate Bond Strategy was awarded ESG investment initiative of the year (fixed income) in Environmental Finance’s 2020 Sustainable Investment Awards. The Environmental Finance Sustainable Investment Awards seek to recognize and highlight the work of asset managers and key players incorporating ESG across all asset classes and winners are selected by an advisory panel consisting of industry experts chosen for their knowledge, objectivity and credibility along with the Environmental Finance editorial team, whom will review the submitted entry material. Judges score each entry individually and any conflict of interest will be removed, the judge’s score will be confidential.

1 UNPRI assessment report limited to asset managers signed up to the Principles for Responsible Investment (PRI) and based on how well ESG metrics are incorporated into their investment processes. UNPRI Transparency Reports are available at https://stpublic.blob.core.windows.net/pri-ra/2020/Investor/Public-TR/(Merged)_Public_Transparency_Report_PIMCO_2020.pdf . Prior to 2021, PRI assessments were awarded scores based on A+ - E scale. A+ being highest score, while E being the lowest. PRI Assessments awarded from 2021 onward are based on a scale of 1-5 Stars. 1 star being the lowest score, 5 stars being the highest. For methodology prior to 2021, please refer to: https://www.unpri.org/reporting-and-assessment/how-to-access-reported-data/3073.article#downloads. For 2021 Methodology, please refer to https://dwtyzx6upklss.cloudfront.net/Uploads/v/g/y/2021_assessmentmethodology_jan_2021_403875.pdf.

2 Sustainable Investment AUM includes third party and Allianz Socially Responsible AUM (negative screened portfolios), ESG AUM (portfolios with ESG objectives) and thematic AUM. $ referenced above is in USD.

3 Calculated as % by par-adjusted Firm AUM. Corporate issuer is defined as a non-government legal entity that develops, registers and sells securities to finance its operations. The statistic relates solely to the in-depth engagement activities by PIMCO's ESG analysts.

4 Calculated as % AUM of green, social, and other impact bonds as compared to the index. Green bonds are defined as bonds with use-of-proceeds devoted to environmental projects. Social bonds are defined as bonds with use-of-proceeds devoted to social projects or activities that achieve positive social outcomes and/or address a social issue. Impact bonds are defined as bonds with use-of-proceeds used to finance or re-finance a combination of green and social projects or activities. Impact bonds also include sustainability-linked bonds, which are bonds structurally linked to the issuer's achievement of climate or broader goals.

5 Source: 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 USD of corporate bond holdings only in the portfolio (for issuers with available data). Absolute carbon emission analysis takes the total emission per issuer into consideration. 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 by companies, 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. PIMCO's estimates generally apply absolute emissions of the issuer's parent company/companies to its subsidiaries. Green bonds issued by utility companies, however, are generally assumed at 10% of the parent company's CO2e intensity. Green bonds from Paris-aligned utility issuers (i.e., those who have represented that their current and future carbon emissions targets are consistent with the global accord to limit the global temperature rise by year 2100 to 1.5°C – 2°C above pre-industrial levels, notably based on methods validating that such targets are ‘science-based') are treated as having zero carbon emissions and, therefore, zero carbon intensity. Paris-aligned utility issuers of sustainability bonds with use of proceeds partly (but not exclusively) dedicated to renewable energy receive 50% of the issuer's carbon metrics (while they receive 60% if issued by a non-Paris aligned utility).

6 Universe is based on utilities sector holdings. 100% of the fund's utilities sector exposure is in renewable energy-based utilities, calculated as % by par-adjusted AUM.

7 Calculated as % by par-adjusted Fund AUM. The statistic relates solely to the in-depth engagement activities by PIMCO's ESG analysts.

8 PIMCO Climate Bond Fund is designed to offer a global, flexible, multi-sector credit portfolio that aims to help foster the transition to a net zero carbon economy while seeking risk-adjusted returns comparable to an investment grade portfolio. To do so, the fund invests in a diversified portfolio of multi-sector global bonds from issuers of labeled and unlabeled green bonds, as well as companies we believe are demonstrating climate change leadership across the value chain. Please see the Fund's prospectus for more detailed information related to its investment objectives and strategies.

9 PIMCO ESG Income Fund is a diversified portfolio of fixed income securities that is actively managed to maximize current income while focusing on environmental-, social- and governance-oriented (ESG) principles. Long-term capital appreciation is a secondary objective. Please see the Fund's prospectus for more detailed information related to its investment objectives, investment strategies and approach to ESG.

10 PIMCO Total Return ESG Fund is a diversified portfolio of high-quality bonds that is actively managed to maximize return in a risk-controlled framework while focusing on environmental-, social-, and governance oriented (ESG) principles. Please see the Fund's prospectus for more detailed information related to its investment objectives, investment strategies and approach to ESG.

11 PIMCO Enhanced Short Maturity Active ESG Exchange-Traded Fund (EMNT) is an actively managed exchange-traded fund (ETF) that seeks maximum current income, consistent with preservation of capital and daily liquidity, while incorporating PIMCO s environmental-, social- and governance-oriented (ESG) investment strategy. EMNT will primarily invest in short duration investment grade debt securities, and will disclose all portfolio holdings on a daily basis. The average portfolio duration of EMNT will vary based on PIMCO's economic forecasts and active investment process decisions, and will not normally exceed one year. Please see the Fund's prospectus for more detailed information related to its investment objectives, investment strategies and approach to ESG.

** The Fund considers ESG factors to choose securities that comprise the fund and to proactively engage with issuers to realize ESG-objectives. 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, shareholders, 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.

PIMCO is committed to the integration of Environmental, Social and Governance ("ESG") factors into our broad research process and engaging with issuers on sustainability factors and our climate change investment analysis. At PIMCO, we define ESG integration as the consistent consideration of material ESG factors into our investment research process, which may include, but are not limited to, climate change risks, diversity, inclusion and social equality, regulatory risks, human capital management, and others. Further information is available in PIMCO's Environmental, Social and Governance (ESG) Investment Policy Statement.

With respect to comingled funds with sustainability objectives ("ESG-dedicated funds"), we have built on PIMCO's 50-year core investment processes and utilize three guiding principles: Exclude, Evaluate and Engage. In this way, PIMCO's ESG-dedicated funds seek to deliver attractive returns while also seeking to achieve positive ESG outcomes through its investments. Please see each ESG-dedicated fund's prospectus for more detailed information related to its investment objectives, investment strategies and approach to ESG.

Different fund types (e.g. ETFs, open-ended investment companies) and fund share classes are subject to different fees and expenses (which may affect performance). They may also have different minimum investment requirements and be entitled to different services.

It is important to note that differences exist between the fund’s daily internal accounting records, the fund’s financial statements prepared in accordance with U.S. GAAP, and recordkeeping practices under income tax regulations. It is possible that the fund may not issue a Section 19 Notice in situations where the fund’s financial statements prepared later and in accordance with U.S. GAAP and/or the final tax character of those distributions might later report that the sources of those distributions included capital gains and/or a return of capital. Please see the fund’s most recent shareholder report for more details.

Although the Fund may seek to maintain stable distributions, the Fund’s distribution rates may be affected by numerous factors, including but not limited to changes in realized and projected market returns, fluctuations in market interest rates, Fund performance, and other factors. There can be no assurance that a change in market conditions or other factors will not result in a change in the Fund’s distribution rate or that the rate will be sustainable in the future.

For instance, during periods of low or declining interest rates, the Fund’s distributable income and dividend levels may decline for many reasons. For example, the Fund may have to deploy uninvested assets (whether from purchases of Fund shares, proceeds from matured, traded or called debt obligations or other sources) in new, lower yielding instruments. Additionally, payments from certain instruments that may be held by the Fund (such as variable and floating rate securities) may be negatively impacted by declining interest rates, which may also lead to a decline in the Fund’s distributable income and dividend levels.

Exchange Traded Funds (“ETF”) are afforded certain exemptions from the Investment Company Act. The exemptions allow, among other things, for individual shares to trade on the secondary market. Individual shares cannot be directly purchased from or redeemed by the ETF. Purchases and redemptions directly with ETFs are only accomplished through creation unit aggregations or “baskets” of shares. Shares of an ETF, traded on the secondary market, are bought and sold at market price (not NAV). Brokerage commissions will reduce returns. Investment policies, management fees and other information can be found in the individual ETF’s prospectus. Buying or selling ETF shares on an exchange may require the payment of fees, such as brokerage commissions, and other fees to financial intermediaries. In addition, an investor may incur costs attributed to the difference between the highest price a buyer is willing to pay to purchase shares of the Fund (bid) and the lowest price a seller is willing to accept for shares of the Fund (ask) when buying or selling shares in the secondary market (the bid-ask spread). Due to the costs inherent in buying or selling Fund shares, frequent trading may detract significantly from investment returns. Investment in Fund shares may not be advisable for investors who expect to engage in frequent trading. Current holdings are subject to risk. Holdings are subject to change at any time. An investment in an ETF involves risk, including the loss of principal. Investment return, price, yield and Net Asset Value (NAV) will fluctuate with changes in market conditions. Investments may be worth more or less than the original cost when redeemed. ETF shares may be bought or sold throughout the day at their market price on the exchange on which they are listed. However, there can be no guarantee that an active trading market for PIMCO ETF shares will develop or be maintained, or that their listing will continue or remain unchanged. Premium/Discount is the difference between the market price and NAV expressed as a percentage of NAV.

A word about risk: Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, call risk, 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 and volatile 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 be enhanced 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 market’s 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. Diversification does not ensure against loss. A Fund's ESG investing strategy may select or exclude securities of certain issuers for reasons other than financial performance. Such strategy carries the risk that the Fund's performance will differ from similar funds that do not utilize an ESG investing strategy. For example, the application of this strategy could affect the Fund's exposure to certain sectors or types of investments, which could negatively impact the Fund's performance. 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 the opinions 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 or unavailable, 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 change over time. 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.

Please refer to the Fund's prospectus for a complete overview of the primary risks associated with the Fund.

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 their ability to invest long-term, especially during periods of downturn in the market.

The Barclays Global Aggregate Credit Index is the credit component of the Barclays Aggregate Index. The Barclays Aggregate Index is a subset of the Global Aggregate Index, and contains investment grade credit securities from the U.S. Aggregate, Pan-European Aggregate, Asian-Pacific Aggregate, Eurodollar, 144A and Euro-Yen indices. The Barclays Global Aggregate Index covers the most liquid portion of the global investment grade fixed-rate bond-market, including government, credit and collateralized securities. The liquidity constraint for all securities in the index is $300 million. The index is denominated in U.S. dollars. It is not possible to invest directly in an unmanaged index.

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 material contains the current opinions of the manager and such opinions are subject to change without notice. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America L.P. in the United States and throughout the world. ©2021, PIMCO PIMCO Investments LLC, distributor, 1633 Broadway, New York, NY 10019, is a company of PIMCO.

CMR2021-0915-1710957

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