Samenvatting

Geen duurzame beleggingsdoelstelling

Dit fonds promoot ecologische of sociale kenmerken maar heeft geen duurzame beleggingsdoelstelling. CRMC (de 'Beleggingsadviseur') heeft echter toegezegd om ten minste 40% van de beleggingen van het Fonds te doen in ondernemingen die, naar het oordeel van de Beleggingsadviseur, maatschappelijke en/of milieugerelateerde uitdagingen aanpakken met hun actuele of toekomstige producten en/of diensten.

Ecologische en/of sociale kenmerken van de financiële producten

Het Fonds promoot ecologische en sociale kenmerken via het beleggingsproces van de Beleggingsadviseur, die beoordeelt of een belegging in aanmerking komt en een Negatief Screeningbeleid toepast.

Beleggingsstrategie

Het Fonds belegt in bedrijven waarvan het merendeel van de producten en diensten zijn afgestemd op, of die overschakelen naar een grotere positieve afstemming op afzonderlijke duurzame beleggingsthema's of een combinatie daarvan, gericht op wereldwijde sociale en ecologische uitdagingen zoals die door de Beleggingsadviseur zijn geïdentificeerd. Die thema's stemmen overeen met de duurzame ontwikkelingsdoelstellingen van de Verenigde Naties (SDG's). Om in aanmerking komende bedrijven te identificeren, voert de Beleggingsadviseur een beoordeling uit die berust op eigen bottom-up onderzoek, uitgevoerd door de beleggings- en ESG-teams van de Beleggingsadviseur. Die beoordeling of bedrijven in aanmerking komen wordt ondersteund door de 'Kenmerken' (die beoordelen of producten en diensten bijdragen aan de SDG's) en 'Standaarden' (die onderzoeken hoe belangrijke ESG-risico's worden beheerd en of er goede bestuurspraktijken gehanteerd worden) van de Beleggingsadviseur op sectoraal niveau. Het Fonds belegt in 'Afgestemde' bedrijven waarvan momenteel minstens de helft van de activiteiten is afgestemd, en op bedrijven 'In transitie' die naar het oordeel van de Beleggingsadviseur hun activiteiten actief overschakelen naar een grotere positieve afstemming op duurzame beleggingsthema's zoals die door de Beleggingsadviseur zijn geïdentificeerd en op de SDG's, waarbij op korte tot middellange termijn aanzienlijke verandering wordt verwacht.

Daarnaast past de Beleggingsadviseur op ESG en op normen gebaseerde uitsluitingen toe om op het moment van de aankoop een Negatief Screeningbeleid toe te passen op de beleggingen van het Fonds.

Capital Group heeft een reeks criteria ontwikkeld om te beoordelen of een bedrijf ernstige afbreuk doet om te bepalen of de belegging een duurzame belegging is. Het Fonds neemt de verplichte belangrijkste ongunstige effecten (Principal Adverse Impacts of PAI's) in aanmerking die zijn opgenomen in Tabel 1 van Bijlage I van de Gedelegeerde Verordening (EU) 2022/1288 van de Commissie voor beleggingen uitgegeven door bedrijven, evenals andere ESG-risico's en controverses die de Beleggingsadviseur als potentieel materieel beschouwt, zoals beschreven in de hierboven vermelde Standaarden op sectorniveau, zoals gegevensbescherming of problemen in verband met censuur.

Bij de beoordeling van praktijken op het gebied van goed bestuur neemt de Beleggingsadviseur minstens zaken in aanmerking die hij als relevant beschouwt voor de vier voorgeschreven pijlers van goed bestuur (nl. goede managementstructuren, betrekkingen met werknemers, beloning van het betrokken personeel en naleving van de belastingwetgeving).

Aandeel beleggingen

Ten minste 90% van de beleggingen van het Fonds wordt gebruikt om te voldoen aan de ecologische of sociale kenmerken die het Fonds promoot (#1 Afgestemd op E/S-kenmerken). Het Fonds zal een minimumaandeel hebben van 60% in de subcategorie '#1A Duurzaam', en maximaal 40% behoort tot de categorie '#1A Overige E/S-kenmerken'. Maximaal 10% van de beleggingen van het Fonds, met inbegrip van beleggingen die niet zijn afgestemd op de gepromote E/S kenmerken en/of derivaten behoort tot de categorie '#2 Overige'. Geldmiddelen en kasequivalenten zijn niet opgenomen in het hierboven vermelde % van activa. Ze kunnen worden aangehouden voor liquiditeitsdoeleinden.

Monitoring ecologische of sociale kenmerken

De duurzaamheidsindicatoren die door dit Fonds worden gebruikt om de verwezenlijking van elk van de door het Fonds gepromote ecologische of sociale kenmerken te meten zijn de volgende:

• in hoeverre effectenuitgevende ondernemingen voldoen aan de criteria uit het Negatieve-Screeningbeleid; percentage beleggingen waarvan minstens 50% van de omzet is afgestemd op de SDG's; en
• percentage beleggingen in bedrijven die worden beschouwd als bedrijven 'In transitie'.

Methodologieën

Het Fonds hanteert twee bindende ESG-gerelateerd criteria: emittenten worden uitgesloten op basis van screens op sectorniveau en op basis van normen en daarnaast heeft het zich ertoe verplicht duurzame beleggingen te doen.

Databronnen en -verwerking

Het Fonds gebruikt verschillende databronnen, met inbegrip van, maar niet beperkt tot MSCI ESG Business Involvement Screening Research ('MSCI ESG') en MSCI United Nations Global Compact Violators. Mogelijk bestrijken die gegevens echter niet het volledige universum van activiteiten van een emittent, en dergelijke gegevens kunnen plots veranderen, onjuist zijn, onnauwkeurig, onvolledig of verouderd, waardoor het Fonds belegt in een emittent waarvan een belegger zou verwachten dat hij zou worden uitgesloten. Capital Group voert een permanente due diligence uit op externe databronnen en levert inspanningen om te verzekeren dat data van derden betrouwbaar zijn. Indien de Beleggingsadviseur van oordeel is dat de gegevens en/of de beoordeling onvolledig of onnauwkeurig is, dan behoudt de Beleggingsadviseur zich het recht voor om zijn eigen beoordeling te gebruiken om de relevante activiteiten waarbij het bedrijf betrokken is, vast te stellen.

Methodologische en databeperkingen

De methodologie en bronnen die als grondslag dienen voor de uitsluitingen en de volledige ESG-integratie, hebben hun beperkingen. Om alle beursgenoteerde ondernemingen ter wereld in kaart te brengen die zijn betrokken bij activiteiten zoals de productie van controversiële producten en omzet genereren uit activiteiten die niet stroken met ESG-criteria en screenings op basis van normen, maakt het Fonds gebruik van ESG-criteria en uitsluitingen die hoofdzakelijk via externe aanbieders zijn geïdentificeerd.

Due diligence

Personeelsleden van de afdelingen Compliance, Risicobeheer en Interne audit van Capital Group voeren periodieke beoordelingen uit over de opzet en de operationele effectiviteit van de activiteiten van het bedrijf en essentiële controlemaatstaven. Dit omvat de naleving van interne processen en procedures en van de reglementering in de rechtsgebieden waar het bedrijf actief is.

Engagementbeleid

Een dialoog aangaan met bedrijven is een integraal onderdeel van de dienst voor beleggingsbeheer die de Beleggingsadviseur aan cliënten aanbiedt. Indien de beleggingsteams van Capital Group een kwestie identificeren die materieel is voor de langetermijnwaarde van een onderneming waarin is belegd of indien zij bezorgd zijn over relatieve ESG-prestaties, zullen de beleggingsprofessionals en governanceteams van Capital Group met het management een dialoog aangaan.

Aangewezen referentiebenchmark

Het Fonds heeft geen referentiebenchmark aangewezen om te voldoen aan de door het Fonds gepromote ecologische en/of sociale kenmerken.

Where third party data or the Investment Adviser’s qualitative assessment indicates that a company is potentially doing significant harm based on a PAI threshold, the Investment Adviser will do additional due diligence to better understand and assess negative impacts indicated by third party or proprietary data. If the Investment Adviser concludes that the company is not causing significant harm based on its analysis, it may proceed with the investment and the rationale for that decision will then be documented. For example, the Investment Adviser may conclude a company is not causing significant harm if (i) the Investment Adviser has reason to believe that third-party data is inaccurate and the Investment Adviser’s own research demonstrates that the company is not causing significant harm; or (ii) the company is taking steps to mitigate or remediate that harm through the adoption of timebound targets and there are meaningful signs of improvement and positive change.

How are the sustainable investments aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights? Details:

The sustainable investments are aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights as follows: the Investment Adviser reviews companies involved in significant ESG controversies, with a focus on those that may conflict with existing global standards, including guidelines from the United Nations Global Compact and the OECD. In accordance with the Negative Screening Policy applied to the Fund, the Investment Adviser will exclude companies violating the UN Global Compact principles. Although other incidents will not automatically result in exclusion from the Fund, the Investment Adviser ensures that appropriate action to remediate the concerns are taken.

Environmental or social characteristics of the financial product

The Fund promotes environmental and/or social characteristics through the Investment Adviser’s investment process, which applies an eligibility assessment and a Negative Screening Policy.

The Fund invests in companies whose products and services are majority-aligned, or transitioning towards higher positive alignment, with any single or combination of sustainable investment themes focused on global social and environmental challenges as identified by the Investment Adviser. These themes map to the United Nations Sustainable Development Goals (“SDGs”).

To identify eligible companies, the Investment Adviser performs an assessment that relies on bottom-up proprietary research conducted by the Investment Adviser’s investment and ESG teams. This eligibility assessment is underpinned by the Investment Adviser’s sector-level “Characteristics” (which assess whether products and services contribute to the SDGs) and “Standards” (which examine management of ESG risks and good governance). The Fund invests in ‘Aligned’ companies that currently have at least half of their business aligned, as well as ‘Transitioning’ companies that the Investment Adviser believes are actively transitioning their business to higher positive alignment, with material near-to-medium term change expected.

In addition, the Investment Adviser applies ESG and norms-based exclusions to implement a Negative Screening Policy to the Fund’s investments at the time of purchase.

There is no reference benchmark designated for the purpose of attaining the environmental or social characteristics promoted by the Fund.

Investment strategy

The Investment Adviser applies the following investment strategy to attain the environmental and/or social characteristics promoted and the sustainable investment objective as follows:

The Fund invests in companies whose products and services are majority-aligned, or transitioning towards higher positive alignment, with any single or combination of sustainable investment themes focused on global social and environmental challenges as identified by the Investment Adviser. These themes map to the United Nations Sustainable Development Goals (“SDGs”).

The themes map to the following key United Nations Sustainable Development Goals (“SDGs”):

To identify such companies, the Investment Adviser performs an eligibility assessment that relies on bottom-up proprietary research conducted by the Investment Adviser’s investment and ESG teams. This eligibility assessment is underpinned by the Investment Adviser’s sector-level “Characteristics” and “Standards”:

• Characteristics: focus on whether products and services contribute to the SDGs; and
•  Standards: focus on management of material ESG risks and good governance.

The Fund invests in ‘Aligned’ companies that currently have at least half of their business aligned, as well as ‘Transitioning’ companies that the Investment Adviser believes are actively transitioning their business to higher positive alignment with material near-to-medium term change expected. If a company is determined to be aligned or transitioning and purchased in the Fund, but fails to meet the aligned or transitioning requirements thereafter, such company would no longer be considered a sustainable investment anymore and would generally be sold within six months from the date of such determination, subject to the best interests of investors in the Fund.

In addition, the Investment Adviser applies ESG and norms-based exclusions to implement a Negative Screening Policy to the Fund’s investments at the time of purchase.

This is supported by ongoing monitoring of the portfolio, performed by the Investment Adviser, against criteria set out in the Negative Screening Policy to identify any holdings that would be precluded. Any such company would no longer be considered a sustainable investment anymore and would generally be sold within six months from the date of such determination, subject to the best interests of investors in the Fund.

The activities and thresholds, from the Negative Screening Policy, applied to determine the list of companies to be excluded from the Funds’ investment universe consist of the following:

When assessing potential investee companies, the Investment Adviser relies on third-party providers who identify a company’s participation in or the revenue which they derive from activities that are inconsistent with these screens. In the event that exclusions cannot be verified through third-party providers or if the Investment Adviser believes that data and/or assessment is incomplete or inaccurate, the Investment Adviser reserves the right to identify business involvement activities through its own assessment (including by using other third-party data sources).

Companies that fail both the eligibility process and the Negative Screening Policy are considered not to contribute to the Fund’s environmental and/or social characteristics.

What is the policy to assess good governance practices of the investee companies?

When assessing good governance practices, the Investment Adviser will, as a minimum, have regard to matters it sees relevant to the four prescribed pillars of good governance (i.e., sound management structures, employee relations, remuneration of staff and tax compliance).

The Investment Adviser assesses the quality of corporate governance practices of companies as part of its eligibility assessment when examining ESG risks, and as part of its ESG integration process more broadly. The Investment Adviser’s fundamental analysis covers a range of governance metrics including among others, audit practices, board composition, tax paid, controversies and executive compensation. The Investment Adviser engages in regular dialogue with companies on corporate governance issues and exercises its proxy voting rights for the entities in which the Fund invests.

As described above, the Investment Adviser applies a Negative Screening Policy to the Fund. As part of this, the Investment Adviser excludes companies violating the United Nations Global Compact (UNGC) principles as well as those violating principle 10 on anti-corruption and principle 3 on employee relations.

Capital Group's ESG Policy Statement provides additional detail on the Investment Adviser's ESG integration approach and processes, including proxy voting procedures and principles, as well as views on specific ESG issues, including ethical conduct, disclosures and corporate governance. Information on the Investment Adviser’s corporate governance principles can be found in its Proxy Voting Procedures and Principles.

Further details can be found in the ESG Policy Statement on:

https://www.capitalgroup.com/content/dam/cgc/tenants/eacg/esg/files/esg-policy-statement(en).pdf

Proportion of investments

At least 90% of the Fund's investments are used to attain the environmental or social characteristics promoted by the Fund (#1 Aligned with E/S characteristics). The Fund will have a minimum proportion of 60% in the sub-category “#1A Sustainable”, and a maximum of 40% will be in category “#1B Other E/S characteristics”.

A maximum of 10% of the Fund’s investments, including investments non-aligned with the E/S characteristics promoted and/or derivatives are in category “#2 Other”.

Cash and cash-equivalents are not included in the % of assets set out above. They may be held for liquidity purposes.

Monitoring of environmental or social characteristics

The sustainability indicators used by this Fund to measure the attainment of each of the environmental or social characteristics it promotes are the following:

• Percentage of issuers falling under the sectors defined as part of the Negative Screening Policy
• Percentage of investments having at least 50% of their revenue aligned with the SDGs, and
• Percentage of investments in companies considered as “Transitioning”.

Methodologies

The methodologies used to measure how the environmental and/or social characteristics are met are as follows:

• Eligibility process: the Investment Adviser seeks to invest in companies whose products and services are majority-aligned, or transitioning towards higher positive alignment, with any single or combination of sustainable investment themes focused on global social and environmental challenges as identified by the Investment Adviser. These themes map to the United Nations Sustainable Development Goals (“SDGs”). ‘Aligned’ companies currently have at least half of their business aligned and ‘Transitioning’ are companies that the Investment Adviser believes are actively transitioning their business to higher positive alignment with sustainable investment themes as identified by the Investment Adviser and with the SDGs, with material near-to-medium term change expected. The Investment Advisor typically uses revenue to assess business alignment, however in some instances other metrics may be more relevant, for example, energy production mix for utilities. The business alignment is accompanied by a qualitative assessment of the company’s product and service contribution to the SDGs, as well as risk of misalignment. It will also consider how material ESG risks and opportunities are being addressed and managed by the company, such as the quality of corporate governance practices and any adverse environmental or social impacts. For Transitioning companies in particular, company development pathway and timeline to reach intended impact is also considered.
•  Relevant KPIs and targets, as well as topics for engagement, are also identified at the time of eligibility and tracked over time. For Transitioning companies in particular, KPIs may include aligned revenue, as well as other transition metrics. Progress against these KPIs and targets is assessed periodically.
• Research is conducted by the Investment Advisor’s ESG analysts and investment analysts. Eligibility decisions are voted on by the strategy’s Principal Investment Officers, Portfolio Managers, and ESG leadership.
• Negative Screening Policy: the Investment Adviser applies ESG and norms-based exclusions to implement a Negative Screening Policy to the Fund’s investments at the time of purchase. The Investment Adviser relies on third-party providers who identify a company’s participation in or the revenue which they derive from activities that are inconsistent with these screens. In the event that exclusions cannot be verified through third-party providers or if the Investment Adviser believes that data and/or assessment is incomplete or inaccurate, the Investment Adviser reserves the right to identify business involvement activities through its own assessment (including by using other third-party data sources).
• Engagement: Engagements are conducted by the ESG team in collaboration with our investment professionals. We engage management teams on topics that are informed by our research, ESG investment frameworks, voting and monitoring process.
• Proxy Voting: We have investment professional-led proxy voting, with our in-house Global Stewardship & Engagement (GSE)/Proxy team conducting analysis. Final proxy outcomes are decided by members of our investment units.

Data sources and processing

Data sources

The Fund uses several data sources as part of the investment process.

In relation to the SDGs alignment, the Investment Adviser typically uses revenue to assess business alignment, but will leverage other metrics if there are more sector-relevant financial metrics for a company and its industry.

The data sources used as part of the Negative Screening Policy are as follows:

In the event that exclusions cannot be verified through third-party data or if the Investment Adviser believes that third-party data and/or assessment is incomplete or inaccurate, the Investment Adviser reserves the right to identify business involvement activities through its own assessment (including by using other third-party data sources).

Data quality and processing

Capital Group periodically reviews the performance quality of provider organizations and conducts ongoing monitoring and due diligence activities commensurate with the significance of the services provided.

Data are regularly updated in Capital Group’s internal platforms and made available to relevant teams. When issues are identified in third-party data, they are reported back to the provider(s). The Investment Adviser also applies systematic data quality checks to catch discrepancies and validate with the provider when issues arise.

Proportion of data that is estimated

Third-party providers may estimate data. While reported data are prioritized, Capital Group uses estimated data when reported data are unavailable. The proportion of estimated data varies depending on the data point due to inconsistencies in reporting by investee companies.

Limitations to methodologies and data

The Investment Adviser may be reliant on third-party data or a combination of third-party data and Capital Group’s proprietary research and analysis. However, such data might not capture the full universe of activities of an issuer, change suddenly, be flawed, inaccurate, incomplete or outdated, resulting in a Fund’s investment in an issuer which an investor may expect to be excluded from the portfolio. Capital Group performs ongoing due diligence on third-party data sources and endeavours to ensure that third-party data is reliable.

In addition, in the event that data cannot be obtained through third-party providers or if the Investment Adviser believes that third-party data and/or assessment is incomplete or inaccurate, the Investment Adviser reserves the right to identify business involvement activities through its own assessment (including by using other third-party data sources).

Due diligence

Members of Capital Group's compliance, risk management and internal audit staff conduct periodic assessments on the design and operating effectiveness of the firm’s activities and key controls. This includes compliance with internal processes and procedures as well as with the regulatory landscape in the jurisdictions in which the company operates. Capital Group meets regularly with the third-party data providers to review the quality of the services provided.

Pre-trade and post-trade checks are also in place as further explained in section “Monitoring of environmental or social characteristics” above.

Engagement policies

Establishing dialogue with companies is an integral part of the Investment Adviser’s investment management service to clients. Capital Group’s investment teams meet on a regular basis with company management, including executive and non-executive directors, chairs and finance directors. This enables the company to engage and generate dialogue on any issues that could affect the company’s long-term prospects, including exposures to sustainability issues.

Where Capital Group's investment teams identify an issue material to the long-term value of a company or they are concerned about relative ESG performance, Capital Group's investment professionals and governance teams will engage with management. Management’s response and the steps they take to minimise any associated risks, forms an important part of Capital Group's assessment of management quality, which itself is a key factor in the stock selection decisions.

Designated reference benchmark

The Fund has not designated a reference benchmark to meet the environmental and/or social characteristics it promotes.

Where can more product-specific information be found?

https://docs.publifund.com/1_PROSP/LU1577354035/en_LU

More product-specific information can be found in the periodic reports:

https://docs.publifund.com/4_AR/LU1577354035/en_LU