By Abhinav Ramnarayan
LONDON (Reuters) - A United Nations plan to boost global development is at risk of failing to reach its goals because of poor data and target-setting by companies, the world's biggest bond investor said.
The plan, known as the U.N. Sustainable Development Goals (SDGs), aims to cut poverty, inequality and environmental degradation globally by 2030.
But PIMCO said an analysis of disclosures from 240 firms which account for its biggest holdings of corporate debt showed that just 12 percent had quantitative targets based on the U.N. goals and only 6 percent reported on progress toward reaching them.
"While momentum is building among corporate issuers to contribute to the SDGs, we believe overall private sector progress is insufficient to achieve the 2030 Agenda," PIMCO said in a statement. "Many investors would like to allocate more capital to companies best aligned with the SDGs, but existing levels of disclosure make this difficult to do."
The fund said improved data was critical to its ability to invest successfully with reference to environmental, social and governance (ESG) issues, an area of growth for the global fund industry that has spawned numerous new products.
PIMCO isn't at this stage looking to sell out of companies that provide insufficient data, but wants to encourage the process so it can get the information it needs to invest with ESG principles in mind.
An investor network set up by the U.N., the Principles for Responsible Investing (PRI), has attracted support from more than 1,800 investors representing over $68 trillion in assets under management.
Signatories commit to six principles, the first of which is the incorporation of ESG issues into investment analysis and decision-making.
"The greater depth of understanding we have of issuer behavior, the better investment decisions we make," said Mike Amey, a portfolio manager and head of ESG strategies for PIMCO.
"What we're trying to do is incorporate these factors in our assessment of quality and value. If we get additional information, that will be part of the decision for ESG portfolios and any portfolio."
PIMCO said 63 percent of those companies assessed had no firm targets despite mentioning their support for the U.N. goals in their annual results.
The United Nations 2030 Agenda for Sustainable Development, agreed and adopted by all 193 member states in 2015, sets 17 goals including improving health and education, reducing inequality, and spurring economic growth while tackling climate change and preserving oceans and forests.