Capital Group Future Generations Global Corporate Bond Fund (LUX)
SRI Style:
Sustainable Style
SDR Labelling:
Not eligible to use label (out of scope)
Product:
SICAV/Overseas
Fund Region:
Global
Fund Asset Type:
Fixed Interest
Launch Date:
27/02/2024
Last Amended:
Aug 2025
Dialshifter (
):
Fund/Portfolio Size:
£41.80m
(as at: 31/03/2025)
Total Screened Themed SRI Assets:
£494.10m
(as at: 31/03/2025)
Total Responsible Ownership Assets:
£2178850.90m
(as at: 31/03/2025)
Total Assets Under Management:
£2179344.00m
(as at: 31/03/2025)
ISIN:
LU2720022313, LU2728519567
Contact Us:
Objectives:
The Fund has a sole investment objective – to seek to provide, over the long term, a high level of total return (a combination of capital growth and income) by investing primarily in corporate investment grade bonds issued by companies worldwide, which we believe contribute positively to environmental and social objectives through their current or future products and/or services. It does this by investing in companies that are either majority-aligned to sustainable development goals (UN SDGs) or are transitioning their business to higher positive alignment over the long term.
The Fund does not have a separate sustainability objective. Our investment approach is bottom up, with portfolio construction reflecting our highest investment convictions that meet our sustainable investment criteria; we do not set top-down targets for our sustainable investment themes or specific sustainability objectives.
Sustainable, Responsible
&/or ESG Overview:
We believe companies contributing positively to the UN SDGs through their products and services can deliver superior long-term investment results.
At the heart of sustainable development is balancing the needs of present and future generations. A long-term investment focus is therefore crucial to align with the time horizons over which sustainable investment themes will unfold.
We invest in companies that are majority aligned (‘Aligned’) and those making meaningful changes that will have a growing contribution (‘Transitioning’). We believe that investing in Transitioning companies, which are focused on hard-to-abate areas or making significant investments in innovative solutions, is critical to achieving the significant ambitions of the SDGs.
A multi-thematic approach provides access to a bigger opportunity set with the potential for multi-decade tailwinds and better risk-adjusted returns than single themed funds.
Rigorous, fundamental research, deep ESG expertise, and a robust eligibility process are vital to identify and evaluate companies.
Primary fund last amended:
Aug 2025
Information directly from fund manager.
Fund Filters
Sustainability - General
Has policies that consider (environmental and social) sustainability issues. Strategies vary but are likely to consider environmental issues like climate change, carbon emissions, biodiversity loss, resource management, environmental impacts; and social issues like equal opportunities, human rights, labour standards, diversity and adherence to internationally recognised codes. See individual entry information.
Has a significant focus on sustainability issues
Has documented policies or thematic investment approaches supporting investment in more sustainable, greener transport methods. These will typically set out a preference for companies that run, enable or support more sustainable methods of transport.
Use the UN Global Compact to inform or help direct where they can or cannot invest. Will typically not invest in companies with significant breaches (low standards) - strategies vary. (The UNGC covers a wide range of issues - search 'UNGC'). See https://unglobalcompact.org/
Aim to invest (and manage assets) in ways that help to address all or some of the UN's Sustainable Development Goals (SDGs). See https://sdgs.un.org/goals).
Has a theme or investment strand focused on the shift to a circular economy - where products are reused and recycled not incinerated or dumped. See eg https://www.ellenmacarthurfoundation.org/topics/circular-economy-introduction/overview
Environmental - General
Has a policy or theme that relates to managing natural resources more efficiently. Strategies vary. See individual entry information.
Aims to invest in companies with strong or market leading environmental policies and practices. Strategies vary. See individual entry information for more detail.
Has a written policy or theme focused on waste management - typically to support or encouraging higher levels of recycling and better efficiency / reducing waste. Strategies vary.
Nature & Biodiversity
A significant focus on investments that aim to protect, improve and / or restore natural habitat.
Climate Change & Energy
Avoid investment in major coal, oil and/or gas (extraction) companies. Strategies vary.
Avoid companies involved in fracking and tar sands - which are widely regarded as controversial methods of oil and gas extraction. Strategies vary.
Avoid companies that are involved in extracting oil from the Arctic regions.
Avoid investing in companies / assets with coal, oil and gas reserves. See individual entry information for further details.
Invest (or may invest) in clean / renewable energy companies and other assets. The proportion directly or indirectly invested in renewable energy may vary over time.
Has an energy efficiency theme - typically meaning that the manager is focused on investing in organisations that manage - or help others to manage - energy use more carefully and less wastefully - and so reduce greenhouse gas emissions.
Invest in renewable energy companies and / or companies where renewable energy is a significant part of their business. Strategies vary.
Has a policy or theme which sets out their position on investment in companies researching/developing hydrogen as an energy solution.
Excludes companies and other assets with direct involvement in fossil fuel exploration (eg coal, oil and gas companies)
Aims to ensure holdings will reduce their greenhouse gas emissions in line with targets set at COP21 in Paris. The core aim is to help achieve ‘net zero emissions by 2050’ and a ‘maximum global temperature increase of +1.5 to +2 degrees above preindustrial levels’. Strategies and opinions vary.
Social / Employment
Aims to invest in assets with high social values - this may include strong human rights, labour standards and equal opportunities or safety related practices.
Has policies or themes that set out their approach to health and wellbeing issues, typically aims to invest in companies with high standards - or encourage high standards.
Ethical Values Led Exclusions
Companies are excluded if they are involved in any aspect of the production chain for tobacco products, including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Companies are excluded if they make more than 5% of their revenue from the manufacture, sale or distribution of tobacco products including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Excludes companies which make controversial weapons such as landmines, cluster munitions and chemical weapons.
Avoids companies that manufacture weapons intended specifically for military use. Strategies vary - may or may not include non-strategic military products.
Does Not exclude companies with military contracts - this may include medical supplies, food, safety equipment, housing, technology etc.
Has a written civilian firearms exclusion policy - meaning that they will not invest in companies that make (or perhaps also sell) handguns made for non-military users.
Meeting Peoples' Basic Needs
Has a responsible food production or agriculture theme or strand of investment. May have a single or many themes.
Gilts & Sovereigns
Invest in loans issued the government, commonly known as gilts or government bonds. These may or may not be ringfenced for specific projects (see additional options).
Avoids investing in 'some' gilts or government bonds. Strategies vary, but this may relate to avoiding specific countries or particular reasons for bond issuance. 'Green gilts' for example would be likely to be acceptable.
Invest in financial instruments issued by governments, but will only hold those that meet certain environmental and or social criteria. This may, for example mean certain assets are excluded in line with eg Freedom House research. Strategies vary.
Banking & Financials
Can include banks as part of their holdings / portfolio.
May invest in insurance companies.
Governance & Management
Avoids investing in companies with poor governance practices.(e.g. board structure, management practices etc.) Views may however vary on what counts as 'poor' practices - and funds may not immediately divest as they may prefer to work to encourage higher standards.
Exclude companies that are subject to United Nations sanctions. See eg https://main.un.org/securitycouncil/en/content/un-sc-consolidated-list
Product / Service Governance
Find fund / asset managers that factor in 'environmental, social and governance' issues as part of their investment decision making process. A focus on 'ESG' typically means a fund is carrying out additional research to help reduce ESG related risks. It does not necessarily mean a focus on sustainability. Strategies vary. See fund literature.
How The Fund/Portfolio Works
Invests in assets which can be 'mapped' (reviewed) their investment selection and management strategies to identify which of the UN Sustainable Development Goals (SDGs) the fund is helping to address.
Investment selection process uses internationally agreed 'norms' (e.g. United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) alongside additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
Invests in assets which have an ESG strategy (which is typically focused on avoiding companies that pose environmental, social or governance related risks) together with additional criteria such as positive and/or negative screens, themes and stewardship strategies.
Focuses on the careful management of environmental, social and governance (ESG) related risks - typically by avoiding or being underweight in companies seen as posing major risks in these areas (i.e. not necessarily by using themes, exclusions etc).
Publish explanations of their ethical, social and/or environmental policies online (i.e. investment decision making strategies/ buy/sell &/or asset management strategies).
Does not use stock lending for performance or risk purposes.
Unscreened Assets & Cash
Holds between 70-79% of assets which align to the sustainability objectives; which are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
Holds between 80-89% of assets which align to the sustainability objectives; which are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
Holds at least 90% of assets which align to the sustainability objectives; which are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
All assets - except cash - meet the sustainability criteria published in strategy documentation.
Intended Clients & Product Options
Designed to meet the needs of individual investors with an interest in sustainability issues.
Labels & Accreditations
Find options classified under Article 8 of the EU’s SFDR (Sustainable Finance Disclosure Requirements). Article 8 of the SFDR is a set of requirements that apply to financial products that 'promote' environmental or social characteristics together with high governance. These rules do not currently apply to UK products so many managers may leave this field blank.
Fund Management Company Information
About The Business
Finds fund / asset management companies that have a published company wide stewardship, engagement and / or responsible ownership policy or strategy that covers all investments. Stewardship typically involves encouraging higher ESG standards through voting and dialogue.
Find fund / asset management companies that actively encourage higher 'environmental, social and governance' and / or 'sustainable and responsible investment' practices across investee companies - typically where the aim is to encourage positive change that is aligned with the best interests of investors. Strategies vary. See additional information and options.
Find fund / asset managers that vote all* the shares they own at Annual General Meetings and Extraordinary General Meetings. A commitment to voting shares is a key indicator of 'responsible share ownership' demonstrating their support for or disagreement with management policy. (*situations can legitimately, occasionally occur where voting proves impossible, but in principle all shares should be voted.)
Find options run by managers that apply Responsible ownership or 'Stewardship' policies to all or most of their investment assets. This means active involvement (e.g. voting, dialogue) with the companies across all or most funds, products and services.
Find fund / asset management companies that consider environmental, social and governance (ESG) issues when deciding whether or not to invest in a company for all / almost all of their funds and other assets. This is increasingly seen as part of sound risk management.
Finds organisations / fund managers that have an in-house (company wide) diversity improvement programme - meaning that they are working to ensure that within their own businesses they employ people from diverse backgrounds - often typically focused on ethnicity and/or sex.
Find fund / asset management companies that encourage the companies they invest in to have strong diversity, race, gender and other equality policies across all assets held, not simply screened or themed SRI/ESG funds. (ie Asset Management company wide).
Collaborations & Affiliations
Find fund / asset management companies that have signed up to the UN backed 'Principles of Responsible Investment'.
Find fund / asset management companies that are members of UKSIF - the UK Sustainable Investment and Finance association
Resources
Find fund / asset management companies that employ people to steer and support fund managers in voting shares at company AGM's and EGMs in ways that are consistent with encouraging higher ESG/sustainability standards.
Find a fund / asset management company that directly employs specialist ESG/SRI/sustainability researchers or analysts. This allows asset managers to discuss environmental, social and governance risks and opportunities directly with companies.
Find fund / asset management companies that makes use of expert external research companies. This can help deliver specialist expertise and means resources are pooled with other investors.
Accreditations
Find fund / asset managers that are signatories to the FRC UK Stewardship Code, which sets out a framework for constructive investor / investee relations where managers are encouraged to behave like responsible, typically longer term 'company owners'.
Engagement Approach
Fund / asset manager has stewardship /responsible ownership strategy that is focused on addressing climate change with investee assets.
Fund / asset manager has a stewardship /responsible ownership strategy that involves working with fossil fuel companies on climate change related issues. See fund manager website for details.
Fund / asset manager has stewardship /responsible ownership strategy with involves encouraging investee asset to reduce plastic waste and pollution.
Fund / asset manager has a stewardship / responsible ownership policy that means they are working to encourage more responsible mining practices - where environmental and social issues are properly dealt with by the companies they invest in.
The fund / asset manager has a responsible ownership / stewardship strategy that focuses on biodiversity and nature issues relating to the assets they invest the aim of which will be to reduce harm and or deliver improvement. Strategies vary. https://tnfd.global
Fund / asset manager has responsible ownership / stewardship strategy in place which aims to address human rights issues in investee companies (and potentially their suppliers) with the aim of raising standards
Fund / asset manager has responsible ownership / stewardship strategy in place that aims to improve labour standards for the benefit of employees in investee companies (and potentially their suppliers)
Fund / asset management company has a stewardship strategy in place which involves working to raise diversity, equality and inclusion standards across investee assets
Fund / asset managers have stewardship strategies in place that focus on improving governance standards across investee assets
Has a stewardship / responsible ownership strategy that encourages responsible supply chain - ie the managers will discuss environmental, social and governance issues with investee companies with the aim of raising standards
Transparency
Find fund / asset management companies that publish a report detailing their responsible investment ownership - also known as 'Stewardship' - activity.
Find fund / asset management companies that publish information about their sustainable and responsible investment strategies on their company website.
Fund / asset management companies that publish a full record of how they vote their shares at AGMs (annual general meetings) and EGMs (extraordinary general meetings). Voting strategies have an important role to play encouraging higher environmental, social and governance standards.
Sustainable, Responsible &/or ESG Policy:
The Fund invests in multiple sustainable investment themes that we believe are durable investment themes and expect to persist over multiple decades. We believe that these offer good sources of long-term investment opportunities and future growth; to meet the goals of the UN SDGs, there is an estimated financing gap of $4.3 trillion annually. This represents a large and deep market of opportunity for companies to develop innovative solutions, refine business models and contribute positively to environmental and social objectives through their current or future products and/or services.
Our sustainable investment themes, which map to the UN SDGs, are:
- Health & wellbeing: Promotes healthy lives and well-being.
- Financial inclusion: Increases access and affordability of financial services and marketplaces.
- Education & information access: Ensures inclusive, quality education and information access.
- Energy transition: Ensures access to affordable, reliable and sustainable energy.
- Responsible consumption: Supports the transition to a circular and sustainable economy.
- Sustainable cities & communities: Supports urbanisation in an inclusive, sustainable way.
- Clean water and sanitation: Ensures availability and sustainable management of water and sanitation.
The themes capture a diverse range of business types and provide a rich, diverse and durable investment opportunity set.
We do not apply ESG screens to reduce the initial investment universe. Instead, we focus on whether companies meet our proprietary sustainable investment eligibility criteria. Following the fundamental research stage, where highest conviction ideas from a long-term financial returns perspective are identified, investment analysts draw on our sector-level Characteristics and Standards to make a high-level assessment of a company’s potential eligibility for our Future Generations funds. Here they consider whether a company contributes positively to environmental and social objectives through their current or future products and/or services, as well as whether the company is appropriately managing material ESG risks.
Our assessment of positive alignment with the UN SDGs, as well as assessment of ESG risks, is highly unlikely to deem certain companies and sectors to be eligible. However, to be prudent we apply the following ESG- and norms-based exclusions:
- Companies that violate UN Global Compact principles
- Companies with any ties to controversial weapons1
- Companies that generate any revenue from the production of nuclear weapons
- Companies with >10% revenue from weapons systems, components and support systems and services2
- Companies with >5% revenue from the production of tobacco
- Companies with >10% revenue from the production and / or distribution of thermal coal
- Oil & gas upstream producers: independent energy and integrated energy companies3
1 Companies that have any ties to cluster munitions, landmines, biological / chemical weapons, depleted uranium weapons, blinding laser weapons, incendiary weapons, nuclear weapons and/or non-detectable fragments.
2 Defined as weapons systems, components, and support systems and services (does not include controversial weapons).
3 As defined by Barclays Global Sector Classification (BCLASS)
Process:
Fundamental Research and Idea Generation.
The first step of the investment process is fundamental research and idea generation. Only issuers that our investment analysts have high conviction in from an investment perspective are put forward for consideration for inclusion in the fund.
Sector-Level ‘Characteristics and Standards’.
Following the fundamental research stage, which integrates ESG considerations, our investment analysts draw on our sector-level Characteristics and Standards to make a high-level assessment of a company’s potential eligibility for our Future Generations strategies.
- Characteristics focus on what products and services are aligned to the UN SDGs
- Standards focus on how products and services are produced, material ESG risks that need to be considered and best practices we expect companies to adhere to.
Proprietary eligibility process
Following the fundamental research stage, which integrates ESG considerations, we assess high conviction issuers for eligibility. This eligibility process aims to identify issuers that we believe contribute positively to Environmental and Social Objectives.
Eligibility process
The investment analysts and ESG analysts work together to assess company-level eligibility for the Future Generations strategies, with the research effort culminating in a detailed impact thesis which incorporates the following:
Assessment of alignment to UN SDGs
The analysts assess the company’s business alignment to the UN SDGs. They typically consider the company’s sources of revenue, however in some instances other metrics may be more relevant, for example, energy production mix for utilities.
We categorize companies as either ‘Aligned’ or ‘Transitioning’:
- 'Aligned’ A company is considered aligned if it has 50%+ business alignment to the UN SDGs, cumulatively across its products and services.
- ‘Transitioning’ companies are those whose business is moving towards higher positive alignment over the long term, with material near- to- medium term changes expected.
- We also assess risks of misalignment to the UN SDGs. If these risks are deemed material, the analyst may choose not to put forward an eligibility recommendation for the company.
Assess ESG risks
We 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. If the analysts deem these risks to be material or not appropriately managed, they may choose to not put forward an eligibility recommendation for the company.
Identify KPIs & engagement topics
We identify relevant key performance indicators (KPIs) and targets to monitor progress and alignment to the UN SDGs. These will vary depending on the sector, sustainable investment theme and company.
Engagements are conducted by our ESG Team in collaboration with our investment professionals. We prioritise Transitioning companies for engagement to assess their progress and will also monitor and engage with aligned companies to ensure continued alignment and appropriate management of material ESG risks.
Eligibility voting
Once the impact thesis has been completed, the Principal Investment Officers (PIOs), PMs and ESG Leadership vote to determine whether a company can be included in our eligible universe.
Monitoring and ongoing assessments
Eligibility is monitored on an ongoing basis and there is a more formal 'refresh' of the impact thesis that occurs broadly annually. In addition to monitoring changes in quantitative measures of business alignment and impact metrics, monitoring also assesses changes in business strategy, management of ESG risks, and progress of our engagements. We monitor 'Aligned' companies to ensure continued positive alignment, and we monitor 'Transitioning' companies to ensure they are on track to meet specific targets and increase positive alignment to the SDGs over the medium to long term.
Portfolio Construction:
Portfolio construction is driven by sector specialists who put forward their highest conviction ideas within their respective industries of coverage. As well as fundamentals, analysts also consider currency, duration and curve, as well as relative value within their sector and across sectors. The PIO, Damir Bettini, is responsible for portfolio construction and ensures the best fundamental, bottom-up ideas within the eligible universe are reflected in the portfolio.
Resources, Affiliations & Corporate Strategies:
ESG Resource
Capital Group has a robust governance structure in place that enables oversight and accountability for effective stewardship within the organization. The structure of our ESG resources reflects our integrated approach to ESG and includes the following in-house teams:
ESG Team: Capital Group has a dedicated 43-person ESG team, led by the global head of ESG and ESG Leadership Team, that partners with investment professionals on integrating ESG considerations into the investment process. Team members have experience in areas such as research and thought leadership, issuer engagement, proxy voting, ESG regulations, ESG data and reporting.
Within the global team, 30 specialists, each with distinct roles and areas of specialization, are responsible for partnering with the Investment Group to:
- Produce thematic and sector-focused research that provides insight into key ESG themes and issues that are material.
- Execute our stewardship efforts, including analyzing proxies and engaging companies, both in partnership with investors.
- Employ an evidence-based approach to the analysis of material ESG risks and opportunities using data-driven tools.
The remaining 12 specialists provide leadership and experience on areas including our ESG monitoring process, ESG data and operations, and supporting client, product, industry and regulatory needs, as well as ESG content development and thought leadership.
Investment Group: More than 120 portfolio managers and 220 in-house analysts work to integrate material ESG considerations into their investment decision-making to help generate long-term value. As part of their fundamental investment research, they evaluate ESG-related and other issues that could impact a company's ability to generate long-term returns. Decisions are based on a holistic view of each issuer that incorporates the long-term prospects of the individual entity, as well as the context of markets, industries and geographies in which it operates.
Governance
The Capital Group Board of Directors and Capital Group Management Committee (CGMC) are responsible for setting and communicating the long-term strategy of the firm, including goals related to ESG and stewardship, as well as those affecting Capital Group’s own corporate sustainability goals.
Capital Group’s subsidiary Capital Research and Management Company’s (CRMC) Board of Directors (and related subsidiary boards) is responsible for investment management activity on behalf of CRMC’s clients. In fulfilling this responsibility, the CRMC board acts through investment policy, investment oversight and proxy voting committees, and the investment and operations teams.
The ESG Management Committee oversees the integration of ESG into our investment process and reviews our ESG strategy with the Capital Group Management Committee throughout the year. The group comprises a subset of our board, our global head of ESG and several senior leaders from across our business groups.
Signatory agreements and memberships
We are members and participants in a number of organizations and initiatives, including:
- International Financial Reporting Standards (IFRS) Foundation / Participant since 2016, signed in 2017
- Asian Corporate Governance Association (ACGA) / 2003
- Council of Institutional Investors (CII) / 2004
- The Investor Forum (UK) / 2014
- Canadian Coalition for Good Governance (CCGG) / 2021
We are also signatories to several agreements such as the UN PRI, ISSB (incl. TCFD), as well as to the UK, Japan and Hong Kong stewardship codes. The full list of our signatories and memberships can be found on our website.
SDR Labelling:
Not eligible to use label (out of scope)
Literature
Fund Holdings
Voting Record
| Fund Name | SRI Style | SDR Labelling | Product | Region | Asset Type | Launch Date | Last Amended |
|
|---|---|---|---|---|---|---|---|---|
Capital Group Future Generations Global Corporate Bond Fund (LUX) |
Sustainable Style | Not eligible to use label (out of scope) | SICAV/Overseas | Global | Fixed Interest | 27/02/2024 | Aug 2025 | |
ObjectivesThe Fund has a sole investment objective – to seek to provide, over the long term, a high level of total return (a combination of capital growth and income) by investing primarily in corporate investment grade bonds issued by companies worldwide, which we believe contribute positively to environmental and social objectives through their current or future products and/or services. It does this by investing in companies that are either majority-aligned to sustainable development goals (UN SDGs) or are transitioning their business to higher positive alignment over the long term. The Fund does not have a separate sustainability objective. Our investment approach is bottom up, with portfolio construction reflecting our highest investment convictions that meet our sustainable investment criteria; we do not set top-down targets for our sustainable investment themes or specific sustainability objectives. |
Fund/Portfolio Size: £41.80m (as at: 31/03/2025) Total Screened Themed SRI Assets: £494.10m (as at: 31/03/2025) Total Responsible Ownership Assets: £2178850.90m (as at: 31/03/2025) Total Assets Under Management: £2179344.00m (as at: 31/03/2025) ISIN: LU2720022313, LU2728519567 Contact Us: tri.huynh@capitalgroup.com |
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Sustainable, Responsible &/or ESG OverviewWe believe companies contributing positively to the UN SDGs through their products and services can deliver superior long-term investment results. At the heart of sustainable development is balancing the needs of present and future generations. A long-term investment focus is therefore crucial to align with the time horizons over which sustainable investment themes will unfold. We invest in companies that are majority aligned (‘Aligned’) and those making meaningful changes that will have a growing contribution (‘Transitioning’). We believe that investing in Transitioning companies, which are focused on hard-to-abate areas or making significant investments in innovative solutions, is critical to achieving the significant ambitions of the SDGs. A multi-thematic approach provides access to a bigger opportunity set with the potential for multi-decade tailwinds and better risk-adjusted returns than single themed funds. Rigorous, fundamental research, deep ESG expertise, and a robust eligibility process are vital to identify and evaluate companies. |
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Primary fund last amended: Aug 2025 |
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Information received directly from Fund Manager |
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Fund FiltersSustainability - General
Sustainability policy
Has policies that consider (environmental and social) sustainability issues. Strategies vary but are likely to consider environmental issues like climate change, carbon emissions, biodiversity loss, resource management, environmental impacts; and social issues like equal opportunities, human rights, labour standards, diversity and adherence to internationally recognised codes. See individual entry information.
Sustainability focus
Has a significant focus on sustainability issues
Sustainable transport policy or theme
Has documented policies or thematic investment approaches supporting investment in more sustainable, greener transport methods. These will typically set out a preference for companies that run, enable or support more sustainable methods of transport.
UN Global Compact linked exclusion policy
Use the UN Global Compact to inform or help direct where they can or cannot invest. Will typically not invest in companies with significant breaches (low standards) - strategies vary. (The UNGC covers a wide range of issues - search 'UNGC'). See https://unglobalcompact.org/
UN Sustainable Development Goals (SDG) focus
Aim to invest (and manage assets) in ways that help to address all or some of the UN's Sustainable Development Goals (SDGs). See https://sdgs.un.org/goals).
Circular economy theme
Has a theme or investment strand focused on the shift to a circular economy - where products are reused and recycled not incinerated or dumped. See eg https://www.ellenmacarthurfoundation.org/topics/circular-economy-introduction/overview Environmental - General
Resource efficiency policy or theme
Has a policy or theme that relates to managing natural resources more efficiently. Strategies vary. See individual entry information.
Favours cleaner, greener companies
Aims to invest in companies with strong or market leading environmental policies and practices. Strategies vary. See individual entry information for more detail.
Waste management policy or theme
Has a written policy or theme focused on waste management - typically to support or encouraging higher levels of recycling and better efficiency / reducing waste. Strategies vary. Nature & Biodiversity
Nature / biodiversity based solutions theme
A significant focus on investments that aim to protect, improve and / or restore natural habitat. Climate Change & Energy
Coal, oil & / or gas majors excluded
Avoid investment in major coal, oil and/or gas (extraction) companies. Strategies vary.
Fracking & tar sands excluded
Avoid companies involved in fracking and tar sands - which are widely regarded as controversial methods of oil and gas extraction. Strategies vary.
Arctic drilling exclusion
Avoid companies that are involved in extracting oil from the Arctic regions.
Fossil fuel reserves exclusion
Avoid investing in companies / assets with coal, oil and gas reserves. See individual entry information for further details.
Clean / renewable energy theme or focus
Invest (or may invest) in clean / renewable energy companies and other assets. The proportion directly or indirectly invested in renewable energy may vary over time.
Energy efficiency theme
Has an energy efficiency theme - typically meaning that the manager is focused on investing in organisations that manage - or help others to manage - energy use more carefully and less wastefully - and so reduce greenhouse gas emissions.
Invests in clean energy / renewables
Invest in renewable energy companies and / or companies where renewable energy is a significant part of their business. Strategies vary.
Hydrogen policy or theme
Has a policy or theme which sets out their position on investment in companies researching/developing hydrogen as an energy solution.
Fossil fuel exploration exclusion - direct involvement
Excludes companies and other assets with direct involvement in fossil fuel exploration (eg coal, oil and gas companies)
Paris aligned strategy
Aims to ensure holdings will reduce their greenhouse gas emissions in line with targets set at COP21 in Paris. The core aim is to help achieve ‘net zero emissions by 2050’ and a ‘maximum global temperature increase of +1.5 to +2 degrees above preindustrial levels’. Strategies and opinions vary. Social / Employment
Favours companies with strong social policies
Aims to invest in assets with high social values - this may include strong human rights, labour standards and equal opportunities or safety related practices.
Health & wellbeing policies or theme
Has policies or themes that set out their approach to health and wellbeing issues, typically aims to invest in companies with high standards - or encourage high standards. Ethical Values Led Exclusions
Tobacco & related product manufacturers excluded
Companies are excluded if they are involved in any aspect of the production chain for tobacco products, including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Tobacco & related products - avoid where revenue > 5%
Companies are excluded if they make more than 5% of their revenue from the manufacture, sale or distribution of tobacco products including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Controversial weapons exclusion
Excludes companies which make controversial weapons such as landmines, cluster munitions and chemical weapons.
Armaments manufacturers avoided
Avoids companies that manufacture weapons intended specifically for military use. Strategies vary - may or may not include non-strategic military products.
Military involvement not excluded
Does Not exclude companies with military contracts - this may include medical supplies, food, safety equipment, housing, technology etc.
Civilian firearms production exclusion
Has a written civilian firearms exclusion policy - meaning that they will not invest in companies that make (or perhaps also sell) handguns made for non-military users. Meeting Peoples' Basic Needs
Responsible food production or agriculture theme
Has a responsible food production or agriculture theme or strand of investment. May have a single or many themes. Gilts & Sovereigns
Invests in gilts / government bonds
Invest in loans issued the government, commonly known as gilts or government bonds. These may or may not be ringfenced for specific projects (see additional options).
Gilts / government bonds - exclude some
Avoids investing in 'some' gilts or government bonds. Strategies vary, but this may relate to avoiding specific countries or particular reasons for bond issuance. 'Green gilts' for example would be likely to be acceptable.
Invests in sovereigns subject to screening criteria
Invest in financial instruments issued by governments, but will only hold those that meet certain environmental and or social criteria. This may, for example mean certain assets are excluded in line with eg Freedom House research. Strategies vary. Banking & Financials
Invests in banks
Can include banks as part of their holdings / portfolio.
Invests in insurers
May invest in insurance companies. Governance & Management
Avoids companies with poor governance
Avoids investing in companies with poor governance practices.(e.g. board structure, management practices etc.) Views may however vary on what counts as 'poor' practices - and funds may not immediately divest as they may prefer to work to encourage higher standards.
UN sanctions exclusion
Exclude companies that are subject to United Nations sanctions. See eg https://main.un.org/securitycouncil/en/content/un-sc-consolidated-list Product / Service Governance
ESG integration strategy
Find fund / asset managers that factor in 'environmental, social and governance' issues as part of their investment decision making process. A focus on 'ESG' typically means a fund is carrying out additional research to help reduce ESG related risks. It does not necessarily mean a focus on sustainability. Strategies vary. See fund literature. How The Fund/Portfolio Works
Assets mapped to SDGs
Invests in assets which can be 'mapped' (reviewed) their investment selection and management strategies to identify which of the UN Sustainable Development Goals (SDGs) the fund is helping to address.
Combines norms based exclusions with other SRI criteria
Investment selection process uses internationally agreed 'norms' (e.g. United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) alongside additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
Combines ESG strategy with other SRI criteria
Invests in assets which have an ESG strategy (which is typically focused on avoiding companies that pose environmental, social or governance related risks) together with additional criteria such as positive and/or negative screens, themes and stewardship strategies.
ESG risk mitigation focus
Focuses on the careful management of environmental, social and governance (ESG) related risks - typically by avoiding or being underweight in companies seen as posing major risks in these areas (i.e. not necessarily by using themes, exclusions etc).
SRI / ESG / Ethical policies explained on website
Publish explanations of their ethical, social and/or environmental policies online (i.e. investment decision making strategies/ buy/sell &/or asset management strategies).
Do not use stock / securities lending
Does not use stock lending for performance or risk purposes. Unscreened Assets & Cash
Assets typically aligned to sustainability objectives 70 - 79%
Holds between 70-79% of assets which align to the sustainability objectives; which are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
Assets typically aligned to sustainability objectives 80 – 89%
Holds between 80-89% of assets which align to the sustainability objectives; which are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
Assets typically aligned to sustainability objectives > 90%
Holds at least 90% of assets which align to the sustainability objectives; which are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
All assets (except cash) meet published sustainability criteria
All assets - except cash - meet the sustainability criteria published in strategy documentation. Intended Clients & Product Options
Intended for clients interested in sustainability
Designed to meet the needs of individual investors with an interest in sustainability issues. Labels & Accreditations
SFDR Article 8 fund / product (EU)
Find options classified under Article 8 of the EU’s SFDR (Sustainable Finance Disclosure Requirements). Article 8 of the SFDR is a set of requirements that apply to financial products that 'promote' environmental or social characteristics together with high governance. These rules do not currently apply to UK products so many managers may leave this field blank. Fund Management Company InformationAbout The Business
Responsible ownership / stewardship policy or strategy (AFM companywide)
Finds fund / asset management companies that have a published company wide stewardship, engagement and / or responsible ownership policy or strategy that covers all investments. Stewardship typically involves encouraging higher ESG standards through voting and dialogue.
ESG / SRI engagement (AFM companywide)
Find fund / asset management companies that actively encourage higher 'environmental, social and governance' and / or 'sustainable and responsible investment' practices across investee companies - typically where the aim is to encourage positive change that is aligned with the best interests of investors. Strategies vary. See additional information and options.
Vote all* shares at AGMs / EGMs (AFM companywide)
Find fund / asset managers that vote all* the shares they own at Annual General Meetings and Extraordinary General Meetings. A commitment to voting shares is a key indicator of 'responsible share ownership' demonstrating their support for or disagreement with management policy. (*situations can legitimately, occasionally occur where voting proves impossible, but in principle all shares should be voted.)
Responsible ownership policy for non SRI / sustainable options (AFM companywide)
Find options run by managers that apply Responsible ownership or 'Stewardship' policies to all or most of their investment assets. This means active involvement (e.g. voting, dialogue) with the companies across all or most funds, products and services.
Integrates ESG factors into all / most research (AFM companywide)
Find fund / asset management companies that consider environmental, social and governance (ESG) issues when deciding whether or not to invest in a company for all / almost all of their funds and other assets. This is increasingly seen as part of sound risk management.
In-house diversity improvement programme (AFM companywide)
Finds organisations / fund managers that have an in-house (company wide) diversity improvement programme - meaning that they are working to ensure that within their own businesses they employ people from diverse backgrounds - often typically focused on ethnicity and/or sex.
Diversity, equality & inclusion engagement policy (AFM companywide)
Find fund / asset management companies that encourage the companies they invest in to have strong diversity, race, gender and other equality policies across all assets held, not simply screened or themed SRI/ESG funds. (ie Asset Management company wide). Collaborations & Affiliations
PRI signatory
Find fund / asset management companies that have signed up to the UN backed 'Principles of Responsible Investment'.
UKSIF member
Find fund / asset management companies that are members of UKSIF - the UK Sustainable Investment and Finance association Resources
In-house responsible ownership / voting expertise
Find fund / asset management companies that employ people to steer and support fund managers in voting shares at company AGM's and EGMs in ways that are consistent with encouraging higher ESG/sustainability standards.
Employ specialist ESG / SRI / sustainability researchers
Find a fund / asset management company that directly employs specialist ESG/SRI/sustainability researchers or analysts. This allows asset managers to discuss environmental, social and governance risks and opportunities directly with companies.
Use specialist ESG / SRI / sustainability research companies
Find fund / asset management companies that makes use of expert external research companies. This can help deliver specialist expertise and means resources are pooled with other investors. Accreditations
UK Stewardship Code signatory (AFM companywide)
Find fund / asset managers that are signatories to the FRC UK Stewardship Code, which sets out a framework for constructive investor / investee relations where managers are encouraged to behave like responsible, typically longer term 'company owners'. Engagement Approach
Engaging on climate change issues
Fund / asset manager has stewardship /responsible ownership strategy that is focused on addressing climate change with investee assets.
Engaging with fossil fuel companies on climate change
Fund / asset manager has a stewardship /responsible ownership strategy that involves working with fossil fuel companies on climate change related issues. See fund manager website for details.
Engaging to reduce plastics pollution / waste
Fund / asset manager has stewardship /responsible ownership strategy with involves encouraging investee asset to reduce plastic waste and pollution.
Engaging to encourage responsible mining practices
Fund / asset manager has a stewardship / responsible ownership policy that means they are working to encourage more responsible mining practices - where environmental and social issues are properly dealt with by the companies they invest in.
Engaging on biodiversity / nature issues
The fund / asset manager has a responsible ownership / stewardship strategy that focuses on biodiversity and nature issues relating to the assets they invest the aim of which will be to reduce harm and or deliver improvement. Strategies vary. https://tnfd.global
Engaging on human rights issues
Fund / asset manager has responsible ownership / stewardship strategy in place which aims to address human rights issues in investee companies (and potentially their suppliers) with the aim of raising standards
Engaging on labour / employment issues
Fund / asset manager has responsible ownership / stewardship strategy in place that aims to improve labour standards for the benefit of employees in investee companies (and potentially their suppliers)
Engaging on diversity, equality & / or inclusion issues
Fund / asset management company has a stewardship strategy in place which involves working to raise diversity, equality and inclusion standards across investee assets
Engaging on governance issues
Fund / asset managers have stewardship strategies in place that focus on improving governance standards across investee assets
Engaging on responsible supply chain issues
Has a stewardship / responsible ownership strategy that encourages responsible supply chain - ie the managers will discuss environmental, social and governance issues with investee companies with the aim of raising standards Transparency
Publish responsible ownership / stewardship report (AFM companywide)
Find fund / asset management companies that publish a report detailing their responsible investment ownership - also known as 'Stewardship' - activity.
Full stewardship / responsible ownership policy information on company website
Find fund / asset management companies that publish information about their sustainable and responsible investment strategies on their company website.
Publish full voting record (AFM companywide)
Fund / asset management companies that publish a full record of how they vote their shares at AGMs (annual general meetings) and EGMs (extraordinary general meetings). Voting strategies have an important role to play encouraging higher environmental, social and governance standards. Sustainable, Responsible &/or ESG Policy:The Fund invests in multiple sustainable investment themes that we believe are durable investment themes and expect to persist over multiple decades. We believe that these offer good sources of long-term investment opportunities and future growth; to meet the goals of the UN SDGs, there is an estimated financing gap of $4.3 trillion annually. This represents a large and deep market of opportunity for companies to develop innovative solutions, refine business models and contribute positively to environmental and social objectives through their current or future products and/or services. Our sustainable investment themes, which map to the UN SDGs, are:
The themes capture a diverse range of business types and provide a rich, diverse and durable investment opportunity set. We do not apply ESG screens to reduce the initial investment universe. Instead, we focus on whether companies meet our proprietary sustainable investment eligibility criteria. Following the fundamental research stage, where highest conviction ideas from a long-term financial returns perspective are identified, investment analysts draw on our sector-level Characteristics and Standards to make a high-level assessment of a company’s potential eligibility for our Future Generations funds. Here they consider whether a company contributes positively to environmental and social objectives through their current or future products and/or services, as well as whether the company is appropriately managing material ESG risks. Our assessment of positive alignment with the UN SDGs, as well as assessment of ESG risks, is highly unlikely to deem certain companies and sectors to be eligible. However, to be prudent we apply the following ESG- and norms-based exclusions:
1 Companies that have any ties to cluster munitions, landmines, biological / chemical weapons, depleted uranium weapons, blinding laser weapons, incendiary weapons, nuclear weapons and/or non-detectable fragments. Process:Fundamental Research and Idea Generation. The first step of the investment process is fundamental research and idea generation. Only issuers that our investment analysts have high conviction in from an investment perspective are put forward for consideration for inclusion in the fund. Sector-Level ‘Characteristics and Standards’. Following the fundamental research stage, which integrates ESG considerations, our investment analysts draw on our sector-level Characteristics and Standards to make a high-level assessment of a company’s potential eligibility for our Future Generations strategies.
Proprietary eligibility process Following the fundamental research stage, which integrates ESG considerations, we assess high conviction issuers for eligibility. This eligibility process aims to identify issuers that we believe contribute positively to Environmental and Social Objectives. Eligibility process The investment analysts and ESG analysts work together to assess company-level eligibility for the Future Generations strategies, with the research effort culminating in a detailed impact thesis which incorporates the following: Assessment of alignment to UN SDGs The analysts assess the company’s business alignment to the UN SDGs. They typically consider the company’s sources of revenue, however in some instances other metrics may be more relevant, for example, energy production mix for utilities. We categorize companies as either ‘Aligned’ or ‘Transitioning’:
Assess ESG risks We 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. If the analysts deem these risks to be material or not appropriately managed, they may choose to not put forward an eligibility recommendation for the company. Identify KPIs & engagement topics We identify relevant key performance indicators (KPIs) and targets to monitor progress and alignment to the UN SDGs. These will vary depending on the sector, sustainable investment theme and company. Engagements are conducted by our ESG Team in collaboration with our investment professionals. We prioritise Transitioning companies for engagement to assess their progress and will also monitor and engage with aligned companies to ensure continued alignment and appropriate management of material ESG risks. Eligibility voting Once the impact thesis has been completed, the Principal Investment Officers (PIOs), PMs and ESG Leadership vote to determine whether a company can be included in our eligible universe. Monitoring and ongoing assessments Eligibility is monitored on an ongoing basis and there is a more formal 'refresh' of the impact thesis that occurs broadly annually. In addition to monitoring changes in quantitative measures of business alignment and impact metrics, monitoring also assesses changes in business strategy, management of ESG risks, and progress of our engagements. We monitor 'Aligned' companies to ensure continued positive alignment, and we monitor 'Transitioning' companies to ensure they are on track to meet specific targets and increase positive alignment to the SDGs over the medium to long term. Portfolio Construction: Portfolio construction is driven by sector specialists who put forward their highest conviction ideas within their respective industries of coverage. As well as fundamentals, analysts also consider currency, duration and curve, as well as relative value within their sector and across sectors. The PIO, Damir Bettini, is responsible for portfolio construction and ensures the best fundamental, bottom-up ideas within the eligible universe are reflected in the portfolio. Resources, Affiliations & Corporate Strategies:ESG Resource Capital Group has a robust governance structure in place that enables oversight and accountability for effective stewardship within the organization. The structure of our ESG resources reflects our integrated approach to ESG and includes the following in-house teams: ESG Team: Capital Group has a dedicated 43-person ESG team, led by the global head of ESG and ESG Leadership Team, that partners with investment professionals on integrating ESG considerations into the investment process. Team members have experience in areas such as research and thought leadership, issuer engagement, proxy voting, ESG regulations, ESG data and reporting. Within the global team, 30 specialists, each with distinct roles and areas of specialization, are responsible for partnering with the Investment Group to:
The remaining 12 specialists provide leadership and experience on areas including our ESG monitoring process, ESG data and operations, and supporting client, product, industry and regulatory needs, as well as ESG content development and thought leadership. Investment Group: More than 120 portfolio managers and 220 in-house analysts work to integrate material ESG considerations into their investment decision-making to help generate long-term value. As part of their fundamental investment research, they evaluate ESG-related and other issues that could impact a company's ability to generate long-term returns. Decisions are based on a holistic view of each issuer that incorporates the long-term prospects of the individual entity, as well as the context of markets, industries and geographies in which it operates. Governance The Capital Group Board of Directors and Capital Group Management Committee (CGMC) are responsible for setting and communicating the long-term strategy of the firm, including goals related to ESG and stewardship, as well as those affecting Capital Group’s own corporate sustainability goals. Capital Group’s subsidiary Capital Research and Management Company’s (CRMC) Board of Directors (and related subsidiary boards) is responsible for investment management activity on behalf of CRMC’s clients. In fulfilling this responsibility, the CRMC board acts through investment policy, investment oversight and proxy voting committees, and the investment and operations teams. The ESG Management Committee oversees the integration of ESG into our investment process and reviews our ESG strategy with the Capital Group Management Committee throughout the year. The group comprises a subset of our board, our global head of ESG and several senior leaders from across our business groups. Signatory agreements and memberships We are members and participants in a number of organizations and initiatives, including:
We are also signatories to several agreements such as the UN PRI, ISSB (incl. TCFD), as well as to the UK, Japan and Hong Kong stewardship codes. The full list of our signatories and memberships can be found on our website. SDR Labelling:Not eligible to use label (out of scope) LiteratureFund HoldingsVoting Record |
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