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RETIREMENT PLAN INVESTOR

Use your plan ID (available on your account statement) to determine which employer-sponsored retirement plan website to use:

IF YOUR PLAN ID BEGINS WITH IRK, BRK, 1 OR 2

Visit americanfunds.com/retire

IF YOUR PLAN ID BEGINS WITH 34 OR 135

Visit myretirement.americanfunds.com

Our ESG approach

ESG is foundational to how we invest.

EXPLORE

A fully integrated approach

At Capital Group, ESG is part of our investment process. ESG issues are woven into The Capital SystemSM, as well as our fundamental research, due diligence and engagement. We believe our approach can help you achieve better results over time.

See how the three elements of our approach integrate ESG into our investment decisions.


How it works

We designed our ESG approach to identify the issues that can matter most to investors. It is built on three tightly woven components: proprietary ESG investment frameworks, a multilayered monitoring process, and engagement and proxy voting. Each element reinforces the others, which makes the system smarter over time.

Investment frameworks
Monitoring process
Engagement & proxy voting

Investment frameworks 
Analysts identify the ESG issues that are material to each sector.

30+

30+

Investment 
frameworks

Investment frameworks

200+

200+

Analysts

14

14

Years of 
tenure

Years of tenure

Annual data as of December 31, 2020.

We look beyond third-party data and spend thousands of hours on our own research. With an average 14 years of experience, our analysts understand the challenges of each industry they cover. They know the right questions to ask. Our sector-specific frameworks focus on the most important ESG issues when evaluating a potential investment.

Frank Beaudry, Capital Group analyst, explains how he identifies ESG issues that influence his investment decisions in the mining industry.

Monitoring process 
We carefully screen securities for key ESG considerations.

We gather data from industry-leading third-party data providers, news reports and company statements, but that's just the start. To decide which investments raise potential ESG concerns, we overlay our own proprietary frameworks and deep research. Low-rated holdings are flagged for review, and analysts provide detailed insights on the particular issues.

The breadth and depth of our on-the-ground research coverage mean we dig deeper and don't always agree with conventional ratings.

Our monitoring process has four steps

STEP 1

ESG data 
aggregation

ESG data aggregation

One database combines our own ESG research and third-party ratings, e.g., MSCI, Sustainalytics, and UN Global Compact assessments.

STEP 2

Identifying and 
flagging risks

Identifying and flagging risks

Our system flags key ESG issues based on our sector-specific investment frameworks, as well as third-party data and standards.

STEP 3

Evaluation and documentation

Flagged holdings require enhanced research and review. Insights and engagement are recorded.

STEP 4

Assessment 
and review

Assessment and review

If there are outstanding concerns, the Issuer Oversight Committee provides an additional layer of review.

Monitoring our 
New Perspective Fund®

Portfolio holdings are subjected to ESG screens using multiple leading data providers and risk methodologies. Click the chart below to see the percentages of flagged and non-flagged holdings.

Data as of December 31, 2020
Source: Capital Group. Screened holdings include corporate bonds and equity holdings. There are a small number of holdings in the fund that are not currently rated by the ESG data providers we use for monitoring.

Engagement & proxy voting 
We gather more information with each new engagement.

We believe ongoing dialogue and engagement with companies and issuers are stronger tools than exclusion when seeking long-term, sustainable results. Based on learnings from our monitoring process, our investment professionals engage with management teams to understand their goals. Building long-standing relationships gives us an opportunity to positively shape and lead industry standards. And as a large, active asset manager, we can adjust our investment decisions based on our findings.

Proxy voting is an integral part of our investment stewardship process. Our investment professionals are directly involved in determining our votes, supported by a specialist Governance and Proxy (GAP) team. Read our proxy voting policies and procedures to learn more.

Beyond our direct engagement with individual companies, we support various industry initiatives that address ESG themes. Our approach to investment stewardship also applies to our own business practices, with focus on improving our communities and environment.

20,000+

20,000+

20,000+

annual meetings

annual meetings

annual meetings

can provide powerful leverage with management teams.

Annual data as of December 31, 2020.

1,850+

1,850+

1,850+

shareholder meetings

shareholder meetings

shareholder meetings

at which we voted keep us engaged and influential on behalf of our investors.

Annual data as of December 31, 2020.

17

17

17

specialists

specialists

specialists

dedicated to governance and proxy issues. In 2020, our investment professionals had ESG-specific engagements with more than 400 organizations in which we hold shares.

As of December 31, 2020.

Download ESG at Capital Group (PDF) to learn more.

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.

Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility. These risks may be heightened in connection with investments in developing countries.

Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.

All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.

Use of this website is intended for U.S. residents only.

American Funds Distributors, Inc., member FINRA.

This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.