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ESG
ESG is integral to our long-term investing philosophy
Rob Lovelace
Vice Chairman
KEY TAKEAWAYS
  • Capital Group has always considered ESG factors in our research and analysis 
  • We have systematically integrated ESG factors through sector-specific research frameworks 
  • We believe a heightened focus on ESG will help us deliver better outcomes for our investors and clients

We’ve always believed that ESG factors are important investment considerations. Now we’re systematically integrating them into our investment process. The goal? Better results for investors and a strengthening commitment to global citizenship

 

Philosophy 


Capital Group was founded nearly 90 years ago on the belief that a deep understanding of companies we seek to invest in will result in better outcomes for investors. This belief is part of our organizational DNA and continues to shape the structure and operation of our investment effort. The hallmark of that effort is engagement. We visit companies, forge relationships with their management teams and develop investment perspectives focused on long-term outcomes. Our process rewards investment professionals for their long-term results. 


Over time, our research effort has expanded and evolved, always with an eye toward better understanding companies. We’ve always believed that knowing how a company interacts with and impacts its community, customers, suppliers and employees is important to understanding its potential as an investment. We’ve sought to invest in firms well-positioned for the future, those able to sustainably grow their businesses. Our experience and research indicate that a company taking a thoughtful and robust approach to Environmental, Social and Governance (ESG) dimensions is actually a positive indicator of sustainability and strategic thinking and that those factors will eventually be positively reflected in a company’s share price.


In addition to supporting our stewardship of investor assets, a strong emphasis on ESG principles has underpinned another key organizational priority: our approach to how we manage the firm and our own corporate citizenship. Capital Group has always been guided by a sense of responsibility to our communities and the world around us. Our mission is to improve people’s lives through successful investing. We understand that delivering superior long-term investment results may be the most direct path to fulfilling that objective, but it is not the only path. Investment managers have a role to play as corporate citizens. We have methods for effecting change and want to realize the promise of ESG by integrating it into our process and making its benefits available to all our clients. 


We want clients and the companies we invest in to understand our level of commitment to ESG investing and have visibility into our process and results. Our commitment is strong and we hope our level of transparency is a demonstration of our commitment.



Becoming more systematic 


As noted, our research effort has always aimed to create a deep and nuanced understanding of companies. Evaluating a company’s social and environmental positioning, as well as its approach to corporate governance, has always been an important part of our research process. More recently, we’ve focused on the value of codifying and systematizing our ESG philosophy and process. 


Our approach to integrating ESG is consistent with the thoughtful approach to major investments in Capital Group’s history. In our most recent long-term strategy review, we confirmed ESG as a top priority for the firm and accelerated a number of initiatives already underway. Defining and codifying our ESG philosophy and integrating it into our investment process enhance our research effort and ultimately, we believe, our investment results. In addition, this stands to benefit our investors by providing the transparency and data they’ve told us is important to them.
 



Rob Lovelace is vice chairman and president of The Capital Group Companies, Inc., chief executive officer of Capital Research and Management Company, and an equity portfolio manager. Rob has 35 years of investment experience (as-of 12/31/2020), all with Capital Group. Earlier in his career, Rob covered global mining & metals companies as an equity investment analyst. He holds a bachelor’s degree in mineral economics (geology) from Princeton University. He also holds the Chartered Financial Analyst® designation. 


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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. All information is as at the date indicated unless otherwise stated. Some information may have been obtained from third parties, and as such the reliability of that information is not guaranteed.