ESG fueled by the power of 3

Our three-part process enhances our research by integrating material environmental, social and governance (ESG) issues.

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Capital Group stewardship report

Find real-world examples of our engagement and proxy voting efforts.

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Explore the latest research and insights in our ESG perspectives library.

Your gateway to all things ESG at Capital Group

 

*For corporate holdings, we use two data providers (MSCI and Institutional Shareholder Services Inc. (ISS)) and five different indicators to monitor and flag holdings. These indicators capture materially lower ESG performance relative to peers and potential violations of international norms via the UN Global Compact (UNGC) and Organisation for Economic Co-operation and Development (OECD) Guidelines. For sovereign holdings, our proprietary ESG score for an issuer is a weighted average of its raw scores from three data sources: Notre Dame Global Adaptation Initiative Climate Vulnerability Index, United Nations Human Development Index and World Bank Worldwide Governance Indicators. Historically, our methodology has most heavily weighted governance metrics. We have viewed “G” as typically more material for sovereigns because governance indicators can provide important signals about a country’s ability to meet its financial obligations. In the future, the relative importance of “E” and related “S” risks may increase.

**Capital Group's in-house tool, Ethos, helps enable investment analysts to identify areas of ESG risk and conduct rigorous security-level analysis and peer comparison.

^While monitoring and further engagement are the most frequent outcomes, divestment is a possibility. 

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