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Capital Group

PRI reporting framework 2020

You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income » Implementation processes

Implementation processes

FI 01. Incorporation strategies applied

Indicate (1) Which ESG incorporation strategy and/or combination of strategies you apply to your actively managed fixed income investments; and (2) The proportion (+/- 5%) of your total actively managed fixed income investments each strategy applies to.
SSA
0 Screening alone
0 Thematic alone
100 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (financial)
0 Screening alone
0 Thematic alone
84.4 Integration alone
15.6 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (non-financial)
0 Screening alone
0 Thematic alone
84.4 Integration alone
15.6 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%
Securitised
0 Screening alone
0 Thematic alone
100 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%

01.2. Describe your reasons for choosing a particular ESG incorporation strategy and how combinations of strategies are used.

The investment process behind all of our strategies integrates ESG in a similar approach. Our rigorous investment process is holistic and long term in nature, hence we actively integrate ESG factors and do not separate them into a different category. We invest client assets according to the objectives of each fund or mandate.

In fixed income, we apply a ‘screen and engage’ process based on the UN Global Compact Ten Principles to several of our Luxembourg-domiciled UCITS corporate bond funds. This systematic integration of norms-based screening more explicitly demonstrates to our clients how we integrate engagement on controversies.

 

01.3. Additional information [Optional].


FI 02. ESG issues and issuer research

02.1. Indicate which ESG factors you systematically research as part of your analysis on issuers.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
Securitised
Environmental data
Social data
Governance data

02.2. Indicate what format your ESG information comes in and where you typically source it

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

02.3. Provide a brief description of the ESG information used, highlighting any differences in sources of information across your ESG incorporation strategies.

We utilise a wide variety of research material; however, our primary source of information, be it environmental, social and governance (ESG) related or not, comes from our own in-house research. Investment professionals at Capital are sector specialists that have the depth and breadth of knowledge that enable them to make decisions that will enhance long-term value for all stakeholders, including our clients.

In many instances our investment professionals have been researching a particular sector for decades and have seen a number of business cycles. This longevity of experience and insight is juxtaposed to the decreasing tenures of CEO's for example and gives our investment analysts an advantage when meeting with management old and new.

Outside research, be it sell-side or specialist research, augments and supplements our understanding and views on sectors, companies, countries or issues. Our long-term lens enables our investment professionals to look past short-term issues whilst continually assessing the current and future prospects. We acknowledge the relevance of ESG factors in contributing to long-term returns and consider them in our research alongside the financial, operational or economic indicators that we use in coming to our investment decision.

02.4. Additional information. [Optional]

We have expanded our use of MSCI screens to their ESG ratings and controversies’ flags and reduced our use of sell-side research as part of the new MiFID 2 regulations. 


FI 03. Processes to ensure analysis is robust

03.1. Indicate how you ensure that your ESG research process is robust:

specify description

          We are in the process of developing/ maintaining sector specific materiality frameworks.
        

03.2. Describe how your ESG information or analysis is shared among your investment team.

          Sector specific or thematic ESG topics are discussed at the bi-monthly ESG calls with analysts and portfolio managers,
        

03.3. Additional information. [Optional]


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