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A multi-thematic approach to sustainable investing
Emme Kozloff
Equity portfolio manager
Cheryl Wilson
Senior ESG Manager
Julian Abdey
Equity Portfolio Manager
Damir Bettini
Portfolio Manager
Nick Grace
Equity Portfolio Manager
January 31, 2024
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Ask 100 investors to give one example of a sustainable investment opportunity, and there’s a good chance many will mention something related to clean energy. Conversely, the odds of them citing “financial inclusion” or “health and well-being” are quite low. And yet, just like clean energy, these and other investable themes have a profoundly significant role to play in the world’s transition to a more sustainable future.


The United Nations estimates there is currently an annual US$4.3 trillion financing gap for the world to deliver against key environmental and social sustainability targets by 2030.1


We believe it will take a wide range of innovative companies to bridge this gap. This presents opportunities for investors that go beyond those typically considered in sustainable strategies.


Investing across multiple sustainable investment theme helps capture the interconnected nature of sustainability. It could also be advantageous for investors by helping mitigate the kinds of market challenges witnessed in recent years. By contrast, single-theme strategies can be volatile, because their exposures can be quite concentrated.


For example, some clean energy-oriented strategies have endured a bumpy ride with significant declines relative to the broader market in part due to rising interest rates; notably, this has hurt solar project earnings. Unintended style bias is another potential risk sometimes seen in single-theme strategies: historically, growth stocks (especially from the technology sector) have proven popular holdings.


Beyond the large investable universe and potential diversification, we believe a multi-thematic approach offers another important benefit: adaptability. At Capital Group, we have identified seven sustainable investment themes - mapped to the UN Sustainable Development Goals - that are, in our view, broad and durable enough to enable our investment professionals to adapt as innovations occur and regulations evolve over the coming decades.


Some of the more compelling opportunities of coming decades, we believe, should be reflected in our seven themes — among those companies that successfully innovate and adapt to structural change and disruption as the world transitions to a more sustainable future.


1. Source UN, as at October 2022


Emme Kozloff is an equity portfolio manager at Capital Group. She has 25 years of investment industry experience and has been with Capital Group for 18 years. Earlier in her career at Capital, as an equity investment analyst, she covered global capital market infrastructure providers, U.S. & Europe asset managers and U.S. retail. Prior to joining Capital, she was a senior equity analyst for Sanford C. Bernstein covering the retail industry. Before that, she held several positions at The Walt Disney Company. She holds an MBA from Harvard Business School and a bachelor’s degree from Pomona College. Emme is based in Los Angeles.

Cheryl Wilson is a senior ESG manager at Capital Group. She has 11 years of industry experience and joined Capital Group in 2021.  She holds a master's degree in climate and environmental science from Queen's University and a master's degree in public policy from Columbia University, as well as a bachelor's degree in biology from Queen's University.

Julian Abdey is an equity portfolio manager with 28 years of investment industry experience (as of 12/31/2023). He holds an MBA from Stanford and an undergraduate degree in economics from Cambridge University.

Damir Bettini is a fixed income portfolio manager at Capital Group. He also serves on the Fixed Income Management Committee. He has 15 years of investment experience, all with Capital Group. Earlier in his career at Capital, as a fixed income investment analyst, he covered European banks, insurance and telecoms. Prior to joining Capital, Damir was a senior director and the global head of insurance criteria with Fitch Ratings. Before that, he was a senior insurance equities analyst with Bank of America and a director and lead analyst with Standard & Poor’s Insurance Ratings. He holds a bachelor’s degree in aeronautical engineering from Queen Mary and Westfield College, University of London. Damir is based in London.

Nick Grace is an equity portfolio manager with 32 years of investment experience (as of 12/31/2021). He previously covered global mining companies as an analyst. He holds an MBA from the University of Wisconsin and a bachelor's from the University of Waikato, New Zealand. Nick is also a CFA charterholder.

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