Fixed income may be on the verge of an impact-investing rebrand, according to a new report published jointly by Builders Vision, impact verification platform BlueMark, and consultancy Tideline.
It found the $141.5T global bond market represents one of the most powerful, yet underutilized, tools for addressing urgent global challenges, from climate transition to affordable housing; yet it has historically been overlooked as a source of impact, despite offering scale, stability, and the ability to mobilize capital in real time.
The report noted, in many respects, some fixed income managers tended to adopt best practices for integrating impact into their investment processes at a level comparable to managers in other asset classes. It added that BlueMark’s verification data found commonalities in application included considering multiple dimensions of impact when assessing the eligibility of a prospective security; tracking common key performance indicators across the portfolio; and monitoring issuers and issuances for environmental, social, and governance (ESG) risks.
At the same time, fixed income managers tended to be less rigorous in developing theories of change for their funds, given the importance of market-level diversification; were less likely to link staff compensation to impact performance; and were less able to collect and monitor information on their portfolios’ impact outcomes in comparison to peers in other asset classes.”
Still, the report highlighted that a small but influential group of managers implementing rigorous impact strategies in the asset class shared five characteristics: having a defined impact strategy in place that guides the selection of fixed income securities; assessing issuers’ ESG practices and ensuring they do no significant harm as part of investment decision-making; taking a holistic approach to assessing securities; optimizing the portfolio by leveraging impact measurement and issuer engagement; and collecting, aggregating, and transparently reporting on the impact of investment.
It also pointed out that, although data is relatively new, the Bloomberg Global Aggregate Green, Social and Sustainability (GSS) Bond Index has closely tracked the broader Global Aggregate Index, showing similar returns. “Moreover, as of June 5, 2025, the GSS Index had a higher one-year return (8.39%) than the Global Aggregate Index (6.42%).”
Despite these strengths, the report noted that “fixed income has received relatively limited attention within the impact investing market. Valued for its relatively unglamorous portfolio construction qualities of stability, liquidity, diversification, and steady income generation, fixed income has been overlooked and underappreciated as an instrument of impact.”
With fixed income comprising 52.3% of the total global market, followed by public equities at 39.9%, the report concluded even modest shifts could catalyze significant change. “Directing even a small additional share of the fixed income market toward impact could catalyze powerful progress towards sustainability and shared prosperity.”
