Our investment professionals and environmental, social and governance (ESG) specialists take on topics that matter.
We believe incorporating material ESG information into investment decision-making can improve outcomes for investors. Poor governance can expose issuers to greater downside risk. And, in terms of potential upside, some long-term studies indicate that funds that incorporate ESG considerations into their investment decisions have outpaced broad market benchmarks over time (Morningstar*, MSCI†).
Ratings from third-party providers can vary widely because of different methodologies and data; they can also miss nuances that bottom-up fundamental research discerns. We consider ratings as one of many inputs, but always go deeper — using proprietary tools, frameworks and insights to evaluate material ESG issues.
It’s limiting to solely focus on an individual sector, a green theme or just those issuers with stellar ESG ratings. That’s why we favor viewing opportunities through a multithematic lens that aligns to the UN Sustainable Development Goals.
Evaluating ESG risks and opportunities is critical to how we invest. Our three-part process enhances our bottom-up, fundamental research and emphasises materiality at the individual-issuer level.
Reflect the most material ESG factors for 30+ sectors.
Flag investments that require even more research and review.
Engagement and proxy voting
Ongoing dialogue with issuers to encourage ESG transparency and best practice.
Our integrated approach to ESG is powerful. The process is continually refined, shining a light on materiality and helping us focus on the most relevant ESG-related risks and opportunities.
Put simply, we believe that integrating ESG analysis into our investment process is a crucial aspect of delivering superior long-term investment outcomes.
For ESG, taking the long view is crucial. We’ve been long-term investors for 91 years.
DEDICATED ESG TEAM
We have 40+ ESG specialists and 25+ data scientists focused on proprietary research, tools and analysis.
Our 450+ analysts and portfolio managers across the globe embed material ESG considerations into their research.
Rob Lovelace and Jody Jonsson explain how ESG is weaved into The Capital System™ and how, at Capital Group, we're seeking to hold ourselves accountable, too.
Find real-world examples of stewardship, engagement and proxy voting.
Explore our approach, actions and key metrics related to climate change.
See how our business operations and investment process are supporting the UN Sustainable Development Goals.
* Hortense Bioy, “Do Sustainable Funds Beat Their Rivals?,” Morningstar, June 16, 2020.
† Raina Oberoi and Guillermo Cano, "Quantifying ESG fund performance," MSCI, April 6, 2020.
All data as at 31 December 2021 unless otherwise stated. Source: Capital Group