ESG
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PERSPECTIVES
Must-read ESG insights and much more
Our investment professionals and environmental, social and governance (ESG) specialists take on topics that matter.
Your question
What is ESG integration?
Our insight
The most widely used implementation strategy among global investors, ESG integration focuses on identifying the ESG risks and opportunities that are likely to affect the longer term value of an investment. ESG Investment Director Jayme Colosimo discusses the growing role of ESG integration in idea generation, research and engagement with issuers.
Your question
Why consider ESG?
Our insight
Capital Group’s investment approach considers material ESG risks and opportunities. By “material,” we mean those ESG-related considerations that are likely to affect the value of an investment over time. Incorporating financially material ESG information into research and analysis can, in our view, help improve long-term outcomes for investors.
Your question
Can human capital affect investment value?
Our insight
The short answer is yes. Our research suggests human capital management is potentially one of the most underappreciated drivers of business value. As ESG senior manager Emma Doner explains, tight labor markets, changing demographics and new regulation suggest it’s becoming an even more important investment consideration.
Your question
Is ESG just a new investment fad?
Our insight
ESG-related issues have long been considered within The Capital SystemTM, even if they haven’t always been labeled in this way. New data, tools and investment frameworks are helping us to better integrate ESG considerations into our investment process and develop deeper insights on those issues that we view as financially material.
Your question
Why consider ESG when investing in government bonds?
Our insight
Low levels of corruption, social cohesion, the rule of law and effective government can set the stage for economic resilience and potentially reduce the risk of financial, political and social upheaval. Conversely, as ESG senior manager Claire Zeigler explains, less favorable ESG indicators could suggest greater sovereign default risk.
OUR APPROACH
Deciding what ESG issues matter most
Evaluating material ESG risks and opportunities is embedded into our investment approach, The Capital System™. Our three-part process enhances our bottom-up, fundamental research and emphasizes materiality at the individual-issuer level.
Research & Investment Frameworks
Reflect material ESG considerations in
25+ sectors.
Monitoring Process
Uses available third-party data to flag our corporate and sovereign holdings that may require further research and review.
Engagement & Proxy Voting
Involves engaging with issuers on material ESG risks and opportunities and voting proxies in the best interest of our clients.
How the power of 3 enhances our bottom-up research
Our integrated approach to ESG is powerful. The process is continually refined, shining a light on materiality and helping us focus on the most relevant ESG-related risks and opportunities.
WHY CAPITAL GROUP?
Striving for a superior ESG process
Put simply, we believe that integrating ESG analysis into our investment approach is a crucial aspect of delivering superior long-term investment outcomes.
LONG TERM
For ESG, taking the long view is crucial. We’ve been long-term investors for 93 years.
DEDICATED ESG TEAM
We have 45+ ESG specialists and 20+ data scientists focused on proprietary research, tools and analysis.
INTEGRATED
Our 360 portfolio managers and investment analysts across the globe embed material ESG considerations into their research.
Source: Capital Group. Data as of December 31, 2023.
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.
ESG DISCLOSURES
Learn more about Capital Group's ESG policy statement, proxy voting guidelines, industry-related initiatives and other disclosures here.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses.
This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
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. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.
Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.
All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.
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This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.
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