Capital Group is one of the world’s largest and most experienced active investment managers. Since 1931, it has been singularly focused on delivering superior results for long-term investors using high-conviction portfolios, rigorous research, and individual accountability. Capital Group joined the Net Zero Asset Managers Initiative in June 2022 and made its initial Target Disclosure in August 2023.
Percentage of assets covered by the Net Zero Asset Managers Commitment Statement
0.64% of total AUM (USD $14.7 billion)
Information on interim target(s) covering the proportion of assets to be managed in line with net zero
For each account with a carbon reduction target, the WACI of the account’s associated benchmark as of 12/31/2019 will serve as the baseline for purposes of tracking the account’s performance against its target.
In-scope Capital Group Luxembourg UCITS and UK OEIC will be managed either to a carbon reduction target or an engagement target.
Our carbon reduction target seeks a 50% reduction in the weighted average carbon intensity (WACI) of a portfolio against a 2019 benchmark baseline by 2030 (see more below).
Our engagement target aims for 75% of assets in a portfolio to be classified as “transition aligning” or “transition aligned” by 2030.
Both our carbon reduction target and our engagement target will only apply to listed equity and corporate fixed income assets where there is adequate emissions data available.
GHG scopes included:
Scope 1 and 2 GHG emissions of corporate holdings are in-scope for carbon reduction targets.
We believe it is important for issuers to consider and disclose material scope 3 GHG emissions. At the same time, we acknowledge the challenges with respect to assessing scope 3 given lack of data availability and varying methodologies at this time. As such, when engaging with high-emitting companies on the topic of climate, we seek to understand their plans regarding the reporting and mitigation of material scope 3 GHG emissions.
IPCC 1.5 degrees above pre-industrial levels with at least 50% probability.
Proportion of AUM committed:
We are taking a client-led approach to net zero. We are committing funds in regions, specifically Europe and Asia-Pacific, that are seeing greater client demand for investments with sustainability considerations.
Our commitment represents approximately 29% of Capital Group’s asset under management in Europe and Asia-Pacific.
Assets committed to be managed in-line with net zero are composed of the following:
1) Segregated accounts where Europe and Asia-Pacific clients have opted-in to the net zero commitment.
2) Capital Group Funds with explicit carbon targets or climate-related constraints. These products are on the market in Europe and Asia-Pacific.
Policy on coal and other fossil fuel investments:
We do not have a firm-wide coal and fossil fuel policy. However, we do apply fossil fuel screens to certain of our Luxembourg Article 8 UCITS and UK OEIC funds.
We incorporate analysis of the risks and opportunities that arise from climate change and the energy transition into our investment process to support the generation of superior long term investment results.