In observance of the Christmas Day federal holiday, the New York Stock Exchange and Capital Group’s U.S. offices will close early on Tuesday, December 24 and will be closed on Wednesday, December 25. On December 24, the New York Stock Exchange (NYSE) will close at 1 p.m. (ET) and our service centers will close at 2 p.m. (ET)
Jessica Ground, global head of ESG, explains how the three parts of our ESG process — Research & Investment Frameworks, Monitoring Process, and Engagement & Proxy Voting — naturally fit into The Capital System™.
Analysis of material ESG issues, alongside other considerations, helps us identify investment risks and opportunities. They can be, but are not necessarily, determinative to an investment decision.
We have developed 25+ sector-specific investment frameworks that distill our thinking on material ESG issues, brought to life with 50+ data sources.
Seema Suchak, head of ESG sector research, discusses materiality.
Jess Ground, global head of ESG, discusses how we integrate ESG into our investment approach, The Capital System™.
Frank Beaudry, investment analyst, discusses how the investment frameworks help evaluate material ESG issues in the mining sector.
To complement our fundamental, bottom-up research, our monitoring process leverages multiple data providers to surface market views of potentially material ESG risks.
We have long-standing relationships with company management that allow us to have meaningful dialogue about managing material ESG risks and opportunities.
ENGAGEMENT
Our investment group had 1,100+ ESG-related engagements across 650+ companies in 2023.
INVESTOR-LED
Investment professionals partner with our stewardship team to ensure companies hear consistent messages.
TRANSPARENCY
ESG engagement goals and discussion outcomes are documented to measure progress.
PROXY VOTING
Our dedicated team analyzes each proxy with final outcomes decided by investment professionals.
Find real-world examples of our engagement and proxy voting efforts.
Explore the latest research and insights in our ESG perspectives library.
*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.