Investire dove la sostenibilità incontra l’opportunità
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Fattori di rischio da prendere in considerazione prima di investire:
Rischio obbligazionario: il valore delle obbligazioni può cambiare in seguito alle variazioni dei tassi di interesse. In genere, quando i tassi di interesse aumentano, il valore delle obbligazioni diminuisce. I fondi che investono in obbligazioni sono esposti al rischio di credito. Un deterioramento della solidità finanziaria di un emittente potrebbe far crollare il valore delle sue obbligazioni o renderle prive di valore.
Rischio di controparte: altri istituti finanziari forniscono servizi al fondo, come la custodia degli asset, o possono fungere da controparte nell’ambito di contratti finanziari come ad esempio i derivati. Esiste il rischio che la controparte non adempia ai propri obblighi.
Rischio strumenti derivati: i derivati sono strumenti finanziari che sfruttano un asset sottostante e che possono essere utilizzati a titolo di copertura di esposizioni esistenti o per ottenere un’esposizione economica. Il risultato di uno strumento derivato potrebbe non corrispondere a quanto previsto, registrando perdite superiori al costo del derivato con conseguenti perdite per il fondo.
Rischio mercati emergenti: gli investimenti nei mercati emergenti sono generalmente più sensibili agli eventi di rischio, come le variazioni di contesto economico, politico, fiscale e normativo.
Rischio di liquidità: in condizioni di mercato critiche, alcuni titoli detenuti dal fondo potrebbero non essere in grado di essere venduti al loro pieno valore, o non poter essere venduti affatto. Ciò potrebbe indurre il fondo a rinviare o sospendere i riscatti delle sue azioni, il che significa che gli investitori potrebbero non avere accesso immediato al loro investimento.
Rischio operativo: il rischio di potenziali perdite derivanti dall’inadeguatezza o dalla disfunzione di processi, risorse umane e sistemi interni, oppure da eventi esogeni.
Rischio di sostenibilità: evento o condizione ambientale, sociale o di governance che, se si verifica, potrebbe avere un impatto considerevolmente negativo – effettivo o potenziale – sul valore di un investimento del fondo.
Nessun obiettivo di investimento sostenibile
Questo Fondo promuove caratteristiche ambientali o sociali, ma non ha come obiettivo l’investimento sostenibile. Tuttavia, CRMC (il “Consulente per gli investimenti”) si impegna a mantenere almeno il 40% degli investimenti del Comparto in società che, a giudizio del Consulente per gli investimenti, affrontano le sfide sociali e/o ambientali attraverso i loro prodotti e/o servizi attuali o futuri.
Caratteristiche ambientali o sociali dei prodotti finanziari
Il Fondo promuove le caratteristiche ambientali e sociali attraverso il processo di investimento del Consulente per gli investimenti, che applica una valutazione di ammissibilità e Criteri di vaglio negativo.
Strategia di investimento
Il Fondo investe in imprese i cui prodotti e servizi sono prevalentemente allineati, o in fase di transizione verso un maggiore allineamento positivo, a qualsiasi singolo tema o combinazione di temi di investimento sostenibili focalizzati sulle sfide sociali e ambientali globali, così come individuati dal Consulente per gli investimenti. Questi temi corrispondono agli Obiettivi di sviluppo sostenibile delle Nazioni Unite (“SDG”). Al fine di individuare le imprese idonee, il Consulente per gli investimenti procede a una valutazione basata su ricerche proprietarie bottom-up, condotte dai propri team ESG e di investimento. Tale valutazione dell’idoneità si basa sulle “Caratteristiche” a livello settoriale del Consulente per gli investimenti (che verificano se i prodotti e i servizi contribuiscono agli SDG) e sugli “Standard” (che esaminano la gestione dei rischi ESG rilevanti e la buona governance). Il Fondo investe in imprese “allineate” che attualmente abbiano almeno la metà dell’attività allineata, nonché in imprese “in transizione” che, a giudizio del Consulente per gli investimenti, stiano attivamente aumentando l’allineamento positivo ai temi di investimento sostenibili individuati dal Consulente per gli investimenti e agli SDG, di cui si prevedono cambiamenti importanti a breve-medio termine.
Il Consulente per gli investimenti applica inoltre esclusioni basate su ESG e norme, per attuare Criteri di vaglio negativo al momento di acquistare gli investimenti del Fondo.
Capital Group ha sviluppato una serie di criteri per valutare se un’impresa arrechi danni significativi, allo scopo di stabilire se l’investimento è classificabile come sostenibile. Il Fondo prende in considerazione i PAI obbligatori elencati nella Tabella 1 dell’Allegato I del Regolamento delegato (UE) 2022/1288 della Commissione sugli investimenti societari, nonché altri rischi e controversie ESG che il Consulente per gli investimenti ritiene potenzialmente rilevanti come indicato negli Standard di settore summenzionati, quali gli aspetti legati alla riservatezza dei dati o alla censura.
Nel valutare le prassi di buona governance, il Consulente per gli investimenti terrà almeno conto degli aspetti che ritiene pertinenti ai quattro pilastri prescritti di buona governance (ovvero strutture di gestione solide, relazioni con il personale, remunerazione del personale e rispetto degli obblighi fiscali).
Quota degli investimenti
Almeno il 90% degli investimenti del Fondo viene impiegato per raggiungere le caratteristiche ambientali o sociali promosse dal Fondo (#1 Allineati a caratteristiche A/S). Il Fondo avrà una quota minima del 60% nella sottocategoria “#1A Sostenibili” e una quota massima del 40% nella categoria “#1B Altre caratteristiche A/S”. Non oltre il 10% degli investimenti del Fondo, compresi quelli non allineati alle caratteristiche A/S promosse e/o i derivati, rientrerà nella categoria “#2 Altri”. Le disponibilità liquide e i mezzi equivalenti non sono inclusi nelle percentuali di attività summenzionate. Le disponibilità liquide e i mezzi equivalenti possono essere detenute a scopo di liquidità.
Monitoraggio delle caratteristiche ambientali o sociali
Seguono gli indicatori di sostenibilità impiegati dal Fondo per misurare il raggiungimento di ciascuna delle caratteristiche ambientali o sociali che promuove:
Metodologie
Il Fondo attua due criteri vincolanti in materia di ESG: filtri settoriali e basati su norme costituiti da esclusioni e l’impegno a effettuare investimenti sostenibili.
Fonti e trattamento dei dati
Il Fondo si avvale di diverse fonti di dati tra cui, a titolo esemplificativo, l’elenco delle imprese che violano l’MSCI United Nations Global Compact e l’MSCI ESG Business Involvement Screening Research (“MSCI ESG”). Tali dati potrebbero tuttavia non rilevare l’intero universo di attività di un emittente, cambiare improvvisamente, essere imprecisi, inaccurati, incompleti o obsoleti, inducendo un Fondo a investire in un emittente che un investitore si attenderebbe di vedere escluso. Capital Group esercita una dovuta diligenza continua sulle fonti di dati di terzi, adoperandosi per assicurarne l’affidabilità. Qualora il Consulente per gli investimenti ritenga che i dati e/o la valutazione siano incompleti o imprecisi, si riserva il diritto di individuare le attività di coinvolgimento aziendali pertinenti tramite una propria valutazione.
Limitazioni delle metodologie e dei dati
La metodologia e le fonti relative alle esclusioni e all’approccio di integrazione ESG nel suo complesso presentano alcuni limiti. Al fine di individuare tutte le società quotate in borsa a livello mondiale coinvolte in attività come la produzione di prodotti controversi e i cui ricavi derivanno da attività incompatibili con i filtri ESG e basati su norme, il Fondo utilizza criteri ESG ed esclusioni identificati prevantemente tramite fornitori terzi.
Dovuta diligenza
Il personale di Capital Group incaricato della compliance, della gestione del rischio e dell’audit interno conduce valutazioni periodiche sulla struttura e sull’efficacia operativa delle attività e dei controlli chiave dell’impresa. Sono incluse la conformità alle procedure e ai processi interni nonché al contesto normativo nelle giurisdizioni in cui opera l’impresa.
Politiche di impegno
Instaurare un dialogo con le imprese è parte integrante del servizio di gestione degli investimenti offerto ai clienti dal Consulente per gli investimenti. Quando i team di investimento di Capital Group individuano un problema capace di incidere in modo rilevante sul valore a lungo termine di un’impresa beneficiaria degli investimenti o nutrono timori sulla performance ESG relativa, si attivano con i vertici aziendali.
Indice di riferimento designato
Il Fondo non ha designato alcun indice di riferimento finalizzato a soddisfare le caratteristiche ambientali e/o sociali che promuove.
The sustainability-related disclosures are meant to be revised as necessary from time to time to capture any changes or reviews. The capitalized terms are used in accordance with the definitions and references outlined in Capital International Fund Prospectus.
Capital International Fund - Capital Group Sustainable Global Corporate Bond Fund (LUX) (the “Fund”)
LEI: 5493008PZIMIIT0L0K15
The below section “Summary” was prepared in English and is being translated to other official languages of the European Economic Area. In case of any inconsistency(ies) or conflict(s) between the different versions of this section “Summary”, the English language version shall prevail.
No sustainable investment objective
This Fund promotes environmental or social characteristics, but does not have as its objective sustainable investment. However, CRMC (the “Investment Adviser”) commits to maintain at least 40% of the Fund’s investments in companies that, in the Investment Adviser’s opinion, are addressing social and/or environmental challenges through their current or future products and/or services.
Environmental or social characteristics of the financial products
The Fund promotes environmental and social characteristics through the Investment Adviser’s investment process, which applies an eligibility assessment and a Negative Screening Policy.
Investment strategy
The Fund invests in companies whose products and services are majority-aligned, or transitioning towards higher positive alignment, with any single or combination of sustainable investment themes focused on global social and environmental challenges as identified by the Investment Adviser. These themes map to the United Nations Sustainable Development Goals (“SDGs”). To identify eligible companies, the Investment Adviser performs an assessment that relies on bottom-up proprietary research conducted by the Investment Adviser’s investment and ESG teams. This eligibility assessment is underpinned by the Investment Adviser’s sector-level “Characteristics” (which assess whether products and services contribute to the SDGs) and “Standards” (which examine management of material ESG risks and good governance). The Fund invests in ‘Aligned’ companies that currently have at least half of their business aligned, as well as ‘Transitioning’ companies that the Investment Adviser believes are actively transitioning their business to higher positive alignment with sustainable investment themes as identified by the Investment Adviser and with the SDGs, with material near-to-medium term change expected.
In addition, the Investment Adviser applies ESG and norms-based exclusions to implement a Negative Screening Policy to the Fund’s investments at the time of purchase.
Capital Group has developed a set of criteria to assess whether a company does significant harm to determine whether the investment constitutes a sustainable investment. The Fund considers the mandatory PAIs as set out in Table 1 of Annex I of Commission Delegated Regulation (EU) 2022/1288 for corporate investments, as well as other ESG risks and controversies that the Investment Adviser considers potentially material as outlined in the sector-level Standards described above, such as data privacy or censorship issues.
When assessing good governance practices, the Investment Adviser will, as a minimum, have regard to matters it sees relevant to the four prescribed pillars of good governance (i.e., sound management structures, employee relations, remuneration of staff and tax compliance).
Proportion of investments
At least 90% of the Fund's investments are used to attain the environmental or social characteristics promoted by the Fund (#1 Aligned with E/S characteristics). The Fund will have a minimum proportion of 60% in the sub-category “#1A Sustainable”, and a maximum of 40% will be in category “#1B Other E/S characteristics”. A maximum of 10% of the Fund’s investments, including investments non-aligned with the E/S characteristics promoted and/or derivatives are in category “#2 Other”. Cash and cash-equivalents are not included in the % of assets set out above. They may be held for liquidity purposes.
Monitoring of environmental or social characteristics
The sustainability indicators used by this Fund to measure the attainment of each of the environmental or social characteristics it promotes are the following:
Methodologies
The Fund implements two binding ESG-related criteria: sector- and norms-based screens in the form of exclusions and a commitment to make sustainable investments.
Data sources and processing
The Fund uses several data sources including, but not limited to, MSCI ESG Business Involvement Screening Research (“MSCI ESG”) and MSCI United Nations Global Compact violators. However, such data might not capture the full universe of activities of an issuer, change suddenly, be flawed, inaccurate, incomplete or outdated, resulting in a Fund’s investment in an issuer which an investor may expect to be excluded. Capital Group performs ongoing due diligence on third-party data sources and endeavours to ensure that third-party data is reliable. In the event that the Investment Adviser believes that data and/or assessment is incomplete or inaccurate, the Investment Adviser reserves the right to identify relevant business involvement activities through its own assessment.
Limitations to methodologies and data
The methodology and sources relating to the exclusions and the ESG integration approach as a whole have certain limitations. In order to identify all publicly traded companies globally which are involved in activities such as the production of controversial products and revenue derived from activities that are inconsistent with the ESG and norms-based screens, the Fund uses ESG criteria and exclusions that are primarily identified through third-party providers.
Due diligence
Members of Capital Group's compliance, risk management and internal audit staff conduct periodic assessments on the design and operating effectiveness of the firm’s activities and key controls. This includes compliance with internal processes and procedures as well as with the regulatory landscape in the jurisdictions in which the company operates.
Engagement policies
Establishing dialogue with companies is an integral part of the Investment Adviser’s investment management service to clients. Where Capital Group's investment teams identify an issue material to the long-term value of an investee company or they are concerned about relative ESG performance, Capital Group's investment professionals and governance teams will engage with management.
Designated reference benchmark
The Fund has not designated a reference benchmark to meet the environmental and/or social characteristics it promotes.
This Fund promotes environmental or social characteristics but does not have as its objective sustainable investment. The Investment Adviser commits to maintain at least 60% of the Fund’s investments in companies that, in the Investment Adviser’s opinion, are addressing social and/or environmental challenges through their current or future products and/or services. This 60% minimum qualifies as “sustainable investments” under Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector.
How have the indicators for adverse impacts on sustainability factors been taken into account?
As mentioned above, the Investment Adviser considers all mandatory PAIs.
The Investment Adviser considers several PAIs within its Negative Screening Policy. In particular, the Negative Screening Policy addresses PAI 4 on exposure to companies active in the fossil fuel sector, PAI 10 on United Nations Global Compact violators and PAI 14 on controversial weapons.
Beyond the negative screening process, with respect to the remaining mandatory PAIs:
where the Investment Adviser considers sufficient and reliable quantitative data is available across the investment universe (for PAIs 1, 2, 3, 6, and 13), the Investment Adviser uses third-party data and prescribed thresholds to determine whether the adverse impact associated with the company’s activities is potentially significant based on the company’s relative ranking (on the specific adverse impact) to the overall investment universe and/or peer group; or
where data availability or quality is not sufficient across the investment universe to enable a quantitative analysis (for PAIs 5, 7, 8, 9, 10, 11, and 12), the Investment Adviser assesses significant harm on a qualitative basis, for example using proxies.
The Investment Adviser’s assessment will also include an overall qualitative assessment of how ESG risks are being managed.
Where third party data or the Investment Adviser’s qualitative assessment indicates that a company is potentially doing significant harm based on a PAI threshold, the Investment Adviser will do additional due diligence to better understand and assess negative impacts indicated by third party or proprietary data. If the Investment Adviser concludes that the company is not causing significant harm based on its analysis, it may proceed with the investment and the rationale for that decision will then be documented. For example, the Investment Adviser may conclude a company is not causing significant harm if (i) the Investment Adviser has reason to believe that third-party data is inaccurate and the Investment Adviser’s own research demonstrates that the company is not causing significant harm; or (ii) the company is taking steps to mitigate or remediate that harm through the adoption of timebound targets and there are meaningful signs of improvement and positive change.
How are the sustainable investments aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights? Details:
The sustainable investments are aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights as follows: the Investment Adviser reviews companies involved in significant ESG controversies, with a focus on those that may conflict with existing global standards, including guidelines from the United Nations Global Compact. In accordance with the Negative Screening Policy applied to the Fund, the Investment Adviser will exclude companies violating the UN Global Compact principles. Although other incidents will not automatically result in exclusion from the Fund, the Investment Adviser ensures that appropriate action to remediate the concerns are taken.
The Fund promotes environmental and/or social characteristics through the Investment Adviser’s investment process, which applies an eligibility assessment and a Negative Screening Policy.
The Fund invests in companies whose products and services are majority-aligned, or transitioning towards higher positive alignment, with any single or combination of sustainable investment themes focused on global social and environmental challenges as identified by the Investment Adviser. These themes map to the United Nations Sustainable Development Goals (“SDGs”).
To identify eligible companies, the Investment Adviser performs an assessment that relies on bottom-up proprietary research conducted by the Investment Adviser’s investment and ESG teams. This eligibility assessment is underpinned by the Investment Adviser’s sector-level “Characteristics” (which assess whether products and services contribute to the SDGs) and “Standards” (which examine management of ESG risks and good governance). The Fund invests in ‘Aligned’ companies that currently have at least half of their business aligned, as well as ‘Transitioning’ companies that the Investment Adviser believes are actively transitioning their business to higher positive alignment, with material near-to-medium term change expected.
In addition, the Investment Adviser applies ESG and norms-based exclusions to implement a Negative Screening Policy to the Fund’s investments at the time of purchase.
There is no reference benchmark designated for the purpose of attaining the environmental or social characteristics promoted by the Fund.
The Investment Adviser applies the following investment strategy to attain the environmental and/or social characteristics promoted and the sustainable investment objective as follows:
The Fund invests in companies whose products and services are majority-aligned, or transitioning towards higher positive alignment, with any single or combination of sustainable investment themes focused on global social and environmental challenges as identified by the Investment Adviser. These themes map to the United Nations Sustainable Development Goals (“SDGs”). The themes map to the following key United Nations Sustainable Development Goals (“SDGs”):
Where third party data or the Investment Adviser’s qualitative assessment indicates that a company is potentially doing significant harm based on a PAI threshold, the Investment Adviser will do additional due diligence to better understand and assess negative impacts indicated by third party or proprietary data. If the Investment Adviser concludes that the company is not causing significant harm based on its analysis, it may proceed with the investment and the rationale for that decision will then be documented. For example, the Investment Adviser may conclude a company is not causing significant harm if (i) the Investment Adviser has reason to believe that third-party data is inaccurate and the Investment Adviser’s own research demonstrates that the company is not causing significant harm; or (ii) the company is taking steps to mitigate or remediate that harm through the adoption of timebound targets and there are meaningful signs of improvement and positive change.
How are the sustainable investments aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights? Details:
The sustainable investments are aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights as follows: the Investment Adviser reviews companies involved in significant ESG controversies, with a focus on those that may conflict with existing global standards, including guidelines from the United Nations Global Compact and the OECD. In accordance with the Negative Screening Policy applied to the Fund, the Investment Adviser will exclude companies violating the UN Global Compact principles. Although other incidents will not automatically result in exclusion from the Fund, the Investment Adviser ensures that appropriate action to remediate the concerns are taken.
Environmental or social characteristics of the financial product
The Fund promotes environmental and/or social characteristics through the Investment Adviser’s investment process, which applies an eligibility assessment and a Negative Screening Policy.
The Fund invests in companies whose products and services are majority-aligned, or transitioning towards higher positive alignment, with any single or combination of sustainable investment themes focused on global social and environmental challenges as identified by the Investment Adviser. These themes map to the United Nations Sustainable Development Goals (“SDGs”).
To identify eligible companies, the Investment Adviser performs an assessment that relies on bottom-up proprietary research conducted by the Investment Adviser’s investment and ESG teams. This eligibility assessment is underpinned by the Investment Adviser’s sector-level “Characteristics” (which assess whether products and services contribute to the SDGs) and “Standards” (which examine management of ESG risks and good governance). The Fund invests in ‘Aligned’ companies that currently have at least half of their business aligned, as well as ‘Transitioning’ companies that the Investment Adviser believes are actively transitioning their business to higher positive alignment, with material near-to-medium term change expected.
In addition, the Investment Adviser applies ESG and norms-based exclusions to implement a Negative Screening Policy to the Fund’s investments at the time of purchase.
There is no reference benchmark designated for the purpose of attaining the environmental or social characteristics promoted by the Fund.
Investment strategy
The Investment Adviser applies the following investment strategy to attain the environmental and/or social characteristics promoted and the sustainable investment objective as follows:
The Fund invests in companies whose products and services are majority-aligned, or transitioning towards higher positive alignment, with any single or combination of sustainable investment themes focused on global social and environmental challenges as identified by the Investment Adviser. These themes map to the United Nations Sustainable Development Goals (“SDGs”).
The themes map to the following key United Nations Sustainable Development Goals (“SDGs”):
Themes | Key Associated UN SDGs |
---|---|
Health & Well-Being |
|
Energy Transition |
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Sustainable Cities & Communities |
|
Responsible Consumption |
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Education & Information Access |
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Financial Inclusion |
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Clean Water & Sanitation |
|
To identify such companies, the Investment Adviser performs an eligibility assessment that relies on bottom-up proprietary research conducted by the Investment Adviser’s investment and ESG teams. This eligibility assessment is underpinned by the Investment Adviser’s sector-level “Characteristics” and “Standards”:
The Fund invests in ‘Aligned’ companies that currently have at least half of their business aligned, as well as ‘Transitioning’ companies that the Investment Adviser believes are actively transitioning their business to higher positive alignment with material near-to-medium term change expected. If a company is determined to be aligned or transitioning and purchased in the Fund, but fails to meet the aligned or transitioning requirements thereafter, such company would no longer be considered a sustainable investment anymore and would generally be sold within six months from the date of such determination, subject to the best interests of investors in the Fund.
In addition, the Investment Adviser applies ESG and norms-based exclusions to implement a Negative Screening Policy to the Fund’s investments at the time of purchase.
This is supported by ongoing monitoring of the portfolio, performed by the Investment Adviser, against criteria set out in the Negative Screening Policy to identify any holdings that would be precluded. Any such company would no longer be considered a sustainable investment anymore and would generally be sold within six months from the date of such determination, subject to the best interests of investors in the Fund.
The activities and thresholds, from the Negative Screening Policy, applied to determine the list of companies to be excluded from the Funds’ investment universe consist of the following:
Activities | Threshold |
---|---|
United Nations Global Compact (UNGC) | Companies that, in the Investment Adviser’s opinion, are violating the UNGC should be excluded. |
Tobacco | Companies generating >5% of their revenue from the manufacture of tobacco products should be excluded. |
Controversial Weapons | Companies with any ties to controversial weapons (cluster munitions, landmines, biological/chemical weapons, depleted uranium weapons, blinding laser weapons, incendiary weapons, and/or non-detectable fragments) should be excluded. |
Nuclear Weapons | Companies generating any revenue from the production of nuclear weapons should be excluded. |
Weapons | Companies generating >10% of their revenue from weapon systems, components and support systems and services should be excluded. |
Oil & Gas Upstream Producers | Companies engaging in, or generating any revenue from, the exploration & production of oil and gas should be excluded. |
Thermal Coal | Companies generating >10% of their revenue from the production and/or distribution of thermal coal should be excluded. |
When assessing potential investee companies, the Investment Adviser relies on third-party providers who identify a company’s participation in or the revenue which they derive from activities that are inconsistent with these screens. In the event that exclusions cannot be verified through third-party providers or if the Investment Adviser believes that data and/or assessment is incomplete or inaccurate, the Investment Adviser reserves the right to identify business involvement activities through its own assessment (including by using other third-party data sources).
Companies that fail both the eligibility process and the Negative Screening Policy are considered not to contribute to the Fund’s environmental and/or social characteristics.
What is the policy to assess good governance practices of the investee companies?
When assessing good governance practices, the Investment Adviser will, as a minimum, have regard to matters it sees relevant to the four prescribed pillars of good governance (i.e., sound management structures, employee relations, remuneration of staff and tax compliance).
The Investment Adviser assesses the quality of corporate governance practices of companies as part of its eligibility assessment when examining ESG risks, and as part of its ESG integration process more broadly. The Investment Adviser’s fundamental analysis covers a range of governance metrics including among others, audit practices, board composition, tax paid, controversies and executive compensation. The Investment Adviser engages in regular dialogue with companies on corporate governance issues and exercises its proxy voting rights for the entities in which the Fund invests.
As described above, the Investment Adviser applies a Negative Screening Policy to the Fund. As part of this, the Investment Adviser excludes companies violating the United Nations Global Compact (UNGC) principles as well as those violating principle 10 on anti-corruption and principle 3 on employee relations.
Capital Group's ESG Policy Statement provides additional detail on the Investment Adviser's ESG integration approach and processes, including proxy voting procedures and principles, as well as views on specific ESG issues, including ethical conduct, disclosures and corporate governance. Information on the Investment Adviser’s corporate governance principles can be found in its Proxy Voting Procedures and Principles.
Further details can be found in the ESG Policy Statement on:
https://www.capitalgroup.com/content/dam/cgc/tenants/eacg/esg/files/esg-policy-statement(en).pdf
At least 90% of the Fund's investments are used to attain the environmental or social characteristics promoted by the Fund (#1 Aligned with E/S characteristics). The Fund will have a minimum proportion of 60% in the sub-category “#1A Sustainable”, and a maximum of 40% will be in category “#1B Other E/S characteristics”.
A maximum of 10% of the Fund’s investments, including investments non-aligned with the E/S characteristics promoted and/or derivatives are in category “#2 Other”.
Cash and cash-equivalents are not included in the % of assets set out above. They may be held for liquidity purposes.
The sustainability indicators used by this Fund to measure the attainment of each of the environmental or social characteristics it promotes are the following:
The methodologies used to measure how the environmental and/or social characteristics are met are as follows:
Data sources
The Fund uses several data sources as part of the investment process.
In relation to the SDGs alignment, the Investment Adviser typically uses revenue to assess business alignment, but will leverage other metrics if there are more sector-relevant financial metrics for a company and its industry.
The data sources used as part of the Negative Screening Policy are as follows:
Activities | Datasource |
---|---|
United Nations Global Compact (UNGC) | Companies are identified through MSCI’s UNGC violators. |
Tobacco | Companies are identified through MSCI’s Tobacco Producer – Maximum Percentage of Revenue factor name. |
Controversial Weapons | Companies are identified through MSCI’s Controversial Weapons – Any Tie factor name. |
Nuclear Weapons | Companies are identified through MSCI’s Weapons – Nuclear Maximum Percentage of Revenue factor name. |
Weapons | Companies are identified through MSCI’s Weapons – Maximum Percentage of Revenue factor name. |
Oil & Gas Upstream Producers | Equity: Companies are identified through Global Industry Classification Standard (GICS) “Integrated Oil & Gas” and “Oil & Gas Exploration & Production” sub-sector classifications. Fixed Income: Companies are identified through Barclays Global Sector Classification (BCLASS) “Independent” and “Integrated” sectors. |
Thermal Coal | Companies are identified through MSCI’s Thermal Coal – Maximum Percentage of Revenue factor name. |
In the event that exclusions cannot be verified through third-party data or if the Investment Adviser believes that third-party data and/or assessment is incomplete or inaccurate, the Investment Adviser reserves the right to identify business involvement activities through its own assessment (including by using other third-party data sources).
Data quality and processing
Capital Group periodically reviews the performance quality of provider organizations and conducts ongoing monitoring and due diligence activities commensurate with the significance of the services provided.
Data are regularly updated in Capital Group’s internal platforms and made available to relevant teams. When issues are identified in third-party data, they are reported back to the provider(s). The Investment Adviser also applies systematic data quality checks to catch discrepancies and validate with the provider when issues arise.
Proportion of data that is estimated
Third-party providers may estimate data. While reported data are prioritized, Capital Group uses estimated data when reported data are unavailable. The proportion of estimated data varies depending on the data point due to inconsistencies in reporting by investee companies.
The Investment Adviser may be reliant on third-party data or a combination of third-party data and Capital Group’s proprietary research and analysis. However, such data might not capture the full universe of activities of an issuer, change suddenly, be flawed, inaccurate, incomplete or outdated, resulting in a Fund’s investment in an issuer which an investor may expect to be excluded from the portfolio. Capital Group performs ongoing due diligence on third-party data sources and endeavours to ensure that third-party data is reliable.
In addition, in the event that data cannot be obtained through third-party providers or if the Investment Adviser believes that third-party data and/or assessment is incomplete or inaccurate, the Investment Adviser reserves the right to identify business involvement activities through its own assessment (including by using other third-party data sources).
Members of Capital Group's compliance, risk management and internal audit staff conduct periodic assessments on the design and operating effectiveness of the firm’s activities and key controls. This includes compliance with internal processes and procedures as well as with the regulatory landscape in the jurisdictions in which the company operates. Capital Group meets regularly with the third-party data providers to review the quality of the services provided.
Pre-trade and post-trade checks are also in place as further explained in section “Monitoring of environmental or social characteristics” above.
Establishing dialogue with companies is an integral part of the Investment Adviser’s investment management service to clients. Capital Group’s investment teams meet on a regular basis with company management, including executive and non-executive directors, chairs and finance directors. This enables the company to engage and generate dialogue on any issues that could affect the company’s long-term prospects, including exposures to sustainability issues.
Where Capital Group's investment teams identify an issue material to the long-term value of a company or they are concerned about relative ESG performance, Capital Group's investment professionals and governance teams will engage with management. Management’s response and the steps they take to minimise any associated risks, forms an important part of Capital Group's assessment of management quality, which itself is a key factor in the stock selection decisions.
The Fund has not designated a reference benchmark to meet the environmental and/or social characteristics it promotes.
https://docs.publifund.com/1_PROSP/LU1577354035/en_LU
More product-specific information can be found in the periodic reports: