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A Q&A with Olivia Albrecht ’11, Senior Vice President and Head of ESG Product Strategy, Pimco, one of the world’s premier fixed income managers. Olivia spoke to the Bernstein Center in regards to her new role in the ESG space, and how her experience with the Student Leadership and Ethics Board informed her principles and values while helping her push past boundaries in her own career.
Can you tell us about your experience with the ESG product platform?
I recently formally joined the ESG team at PIMCO. I’m excited to help launch new products in the ESG fixed income space. We are at a really innovative moment where we can influence the outcome of sustainable investing on the fixed income side of the equation. So, I am helping to develop our products lineup for our clients around the world today.
What is Pimco’s history in regards to investing in the ESG platform?
PIMCO has been in the sustainable investing or social responsible investing sphere for several decades now. We launched some of the first mutual funds in the space in the early 90’s. Those strategies were more oriented around negative screening, excluding those issuers and issues that were not compatible with the ethics and values of the underlying investors in those funds. Today, we have evolved our platform to go much beyond the negative screening exercise. We have incorporated ESG dimensions into our credit research process. We started doing that about six or seven years ago, so all of our credit research analysts (we have around 55+ around the world) are required to evaluate their issuers across the ESG factors. More recently, we have actually started quantifying those reports into stand alone or aggregated scores, so each issuer that we cover, we are actually now scoring them not only on the traditional profile, but also on their ESG scores.
“We are at a really innovative moment where we can influence the outcome of sustainable investing on the fixed income side of the equation.”
Why do you think more and more investors are interested in investing in this platform even when some CEO’s, including Vanguard’s Jack Bogle, have questioned the sustainability of ESG funds in the past?
From our view point, evaluating issuers - companies and sovereigns - across these ESG factors, there’s an intuitive linkage to the risk mitigation component where the research analyst evaluates the credit-worthiness and the risk associated with any individual issuer, incorporating the environmental, social, and governance components to give you the fuller picture of the credit-worthiness of an individual issuer.
For the opportunity side of the equation, it certainly makes intuitive sense to us that there are some companies that are retooling or evolving their business models to be more consistent with sustainable business practices and where the global economy is going into the 21st century. Automotive industries or automotive companies, five to seven years ago who weren’t investing in electric vehicle (EV) technologies are sitting by the wayside today. And those who have invested in EV are going to perform better over time. They are going to have a more sustainable business model. There are some businesses that are doing this better than others and it is likely that they will perform better over time as well.
How did your experience with the Student Leadership and Ethics Board and the Bernstein Center help form your leadership skills, core values and/or principles during your time at CBS?
This is a core group of really amazing people – people who are really looking to make a difference in the world, not just be bystanders. I think that the SLEB initiatives really helped me embrace that desire to do more. It helped me recognize that while you may just be a student, you can influence outcomes; you can influence change: you can bring speakers on campus who are controversial and who make you think. Leadership and ethics are not black and white issues. They are very grey. You need to hear from different types of people; you can hear from people that you agree with and you can hear from people that you disagree with, but as long as you are thinking about these issues and helping the community keep them front and center, that's the impact. I think that influence can’t be overstated. I think that it’s given me confidence to push the envelope and to see the world in a different way. So I think it has been an extremely positive experience for me – and of course, I found my husband (SLEB Chairman Lukas Pieter) and one of my best friends (SLEB Co-Chairwoman Kesha Cash)!
“Pushing yourself to see experiences in a different light or in a different way helps you better understand your moral compass and helps you better define it going forward.”
What piece of advice would you give to current MBAs in regards to building their moral and ethical muscle during business school?
A lot of it goes back to pushing the envelope, getting to a place where you feel uncomfortable and trying to better understand how you think about ethical and moral issues. For example, one of the most impactful experiences I had with SLEB was inviting former Governor Eliot Spitzer to campus as his first public appearance since he resigned over a series of scandals the previous year. To invite him on behalf of the Student Leadership and Ethics Board was a very controversial decision. But, I think it’s so important. Former Governor Spitzer was invited precisely because he was not a squeaky clean role model- he was flawed and had erred. Hearing his story and experience helped you better understand yourself and better understand where your boundaries are. Pushing yourself to see experiences in a different light or in a different way helps you better understand your moral compass and helps you better define it going forward.
Are you an alum who is interested in sharing your story or thoughts about ethical leadership? Please feel free to contact our Center using the Pitch A Story form.