Capital Group, home of the American Funds and one of the world’s largest investment management firms, has joined the United Nations Global Compact initiative — a voluntary leadership platform for the development, implementation and disclosure of responsible business practices. The Compact is a call to companies globally to align their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption, and to take action in support of the UN goals. These are embodied in its 17 Sustainable Development Goals (SDGs) which address many of the world’s most pressing needs and apply to all nations.
“The UN’s Sustainable Development Goals are a critical framework for asset managers and the companies we invest in to quantify their impact,” said Jessica Ground, Capital Group’s Global Head of ESG. “By leveraging the SDGs, we will add further focus to our ESG process, and better understand the impact we are achieving as an asset manager and employer.”
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Capital Group has integrated ESG across all of its investment strategies. A key pillar of the firm’s approach is its sector-specific investment frameworks, which identify the ESG issues that are likely to be the most material to the long-term success and sustainability of companies. The firm’s investment frameworks and business operations have been mapped to five prioritized SDG themes: Gender Equality, Decent Work and Economic Development, Reduced Inequalities, Responsible Consumption and Production, and Climate Action.
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“Robust processes and thoughtful frameworks are crucial, but we know that current and would-be clients want more than pledges. We are committed to providing more transparency on our processes around ESG integration,” said Robert W Lovelace, Vice Chairman and President of The Capital Group Companies. “Capital Group has always believed that knowing how a company interacts with and impacts its community, customers, suppliers and employees is important to understanding its potential as an investment. Our experience and research indicate that a company taking a thoughtful and robust approach to Environmental, Social and Governance dimensions is a positive indicator of sustainability and strategic thinking, and that those factors will eventually be positively reflected in its valuation.”
Launched in 2000, the UN Global Compact is the largest corporate sustainability initiative in the world, with more than 12,000 companies and 3,000 non-business signatories based in over 160 countries.
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