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Other sites :
Financial Intermediaries - Singapore
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More Capital Group Sites
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American Funds
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- Institutions & Consultants
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More Capital Group Sites
- Capital Group Worldwide (corporate site)
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Capital Group
More Capital Group Sites
- Capital Group Worldwide (corporate site)
- Capital IdeasTM
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INVESTMENT FRAMEWORK
US Health care services
Our approach to essential environmental, social and governance (ESG) issues in the US health care sector is distinct and differentiated.
Grounded in decades of experience
Our fixed income and equity analysts, averaging 14 years of experience,* created our health care services investment framework, which guides us as we analyse investments, track key ESG issues and engage with management teams.
Cheryl Frank, Capital Group portfolio manager and analyst, shares her perspective on the key issues that create and destroy value in the US health care sector.
Zeroing in on what matters
Our health care services analysts created this US focused framework using their extensive global-sector experience, our proprietary research, issues identified by the Sustainability Accounting Standards Board (SASB), and engagement with companies and issuers.
Once they had a comprehensive list of ESG issues, our analysts determined the areas they believed were most material: consumer wellbeing and corporate governance.
Environmental
Climate change risk
Natural resource management
Pollution & waste management
Environmental opportunities
Social
Human capital management
Consumer wellbeing
Social opportunities
Governance
Corporate governance
Corporate behaviour
Consumer wellbeing
Our analysts concluded there are three critical factors when considering consumer wellbeing: safety, access and privacy.
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Consumer safety
Consumer safety
Relevance:
Patients place enormous trust in health care providers. Patient welfare must be the priority. Long-term competitive success depends on patients who get — and stay — healthy.
Best practices:
Commitment by management to prioritise patient outcomes
Quality that is measured by keeping patients healthy
Multi-year improvement goals that aim to exceed regulatory standards
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Affordability and access
Affordability and access
Relevance:
Quality health care must be affordable and accessible; failure in this effort may lead to regulatory intervention.
Best practices:
A focus on value-based health care that aims to deliver better outcomes
Price transparency and innovations supporting affordable care
Proactive partnership with government programmes
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Privacy and data security
Privacy and data security
Relevance:
Patient data enables better care, but is a vulnerability and must be secure.
Best practices:
Adherence to EU-US Privacy Shield Framework
Disclosure and rapid response to security breaches
Proactive use of data to improve patient outcomes
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Corporate governance
Our analysts prioritised governance issues that may affect the company's dedication to ESG: ethics, integrity and accountability.
Management quality, ethics and accountability
Relevance:
Management teams with steadfast integrity are essential to long-term success. Management ethics are a key lens through which to understand all other ESG issues.
Best practices:
Management incentives linked to patient outcomes
Commitment to regulatory compliance in letter and spirit
Culture anchored in community service and social wellbeing
Our evolving approach
As one component of our three-part approach to ESG, our investment frameworks are continually evolving. Through our monitoring process, as well as engagement and proxy, our analysts continuously gather and incorporate new information.
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ESG at Capital Group
ESG AT CAPITAL GROUP
We incorporate environmental, social and governance factors into our investment process.
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Global citizenship
GLOBAL CITIZENSHIP
We live the same high standards we expect of the organisations in which we invest.
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*Average years of experience for the seven equity and fixed income analysts who worked to create the health care services research framework. Calculated as at 30 June 2020.