ESG Overview
At American Century Investments, we’re committed to delivering investment performance and to making a difference. We are proud of our history of helping clients achieve financial success while also making a positive impact in the world.
Sustainability is truly in our genes, and as we help our clients achieve financial success, we make an impact on advancing U.N. Sustainable Development Goal 3 – Ensure Healthy Lives and Promote Well-Being for All at All Ages through our unique business model. Our controlling owner, the Stowers Institute for Medical Research, is a world-class biomedical research organization, and more than 40% of our dividends go to support its efforts to better understand human health and life-threatening diseases.
“Sustainability isn’t just something we practice; it is part of who we are as a company and as global citizens,” says Jonathan Thomas, American Century president and chief executive officer. “Providing investment solutions that incorporate sustainability principles is a natural extension of the impact our firm creates.”
Further, we believe that integrating ESG factors into our fundamental investment process allows us to assess long-term sustainability of an issuer’s business model or durability of cash-flows over time more holistically. We believe ESG issues can be important inputs into the fundamental analysis process and may contribute to downside risk mitigation or the understanding of upside potential of an issuer’s long-term business value. That is why many of our investment teams incorporate ESG considerations into their investment processes.
Our investment teams work in partnership with our dedicated Sustainable Research team as they seek to incorporate material ESG factors into fundamental research.
ESG Commentary from Victor Zhang, CIO
We believe integrating sustainability-related factors into the investment process helps us deliver better long-term, risk-adjusted returns for our clients.
For many years, we have been incorporating ESG considerations into our investing in various ways. Over time, the firm has steadily progressed its sustainable investing capabilities centered on strengthening the structure and commitment; expanding ESG integration across investment teams; advancing stewardship practices; enhancing proprietary tools; and innovating client solutions.
We proudly position our sustainable investing program as client focused and solutions driven. While American Century emphasizes ESG integration across many of our investment strategies, we also offer ESG-focused solutions that are designed to promote sustainable characteristics and outcomes. Our ESG-focused capabilities include best-in-class tilt, thematic, and impact investment strategies. These capabilities benefit from our ESG integration framework and are designed to promote sustainable outcomes in addition to seeking superior, long-term, risk-adjusted returns. Additionally, we have experience and expertise in managing portfolios in accordance with client-mandated investment exclusions, such as SRI guidelines, norms-based values, faith-based values, and other pre-selected exclusions.
“Clients are the heart of who we are, and we will continue to innovate our investment capabilities through solutions designed to achieve the sustainable investing goals of our clients,” says Chief Investment Officer Victor Zhang.
American Century Investments and Global Fund Search are not affiliated investment companies.
Many of American Century’s investment strategies incorporate the consideration of environmental, social, and/or governance (ESG) factors into their investment processes in addition to traditional financial analysis. However, when doing so, the portfolio managers may not consider ESG factors with respect to every investment decision and, even when such factors are considered, they may conclude that other attributes of an investment outweigh ESG considerations when making decisions for the portfolio. The consideration of ESG factors may limit the investment opportunities available to a portfolio, and the portfolio may perform differently than those that do not incorporate ESG considerations. ESG data used by the portfolio managers often lacks standardization, consistency, and transparency, and for certain companies such data may not be available, complete, or accurate.
ESG Definitions:
- ESG Integrated: An investment strategy that integrates ESG factors aims to make investment decisions through the analysis of ESG factors alongside other financial variables in an effort to deliver superior, long-term, risk-adjusted returns. Therefore, ESG factors may limit the investment opportunities available, and the portfolio may perform differently than those that do not incorporate ESG factors. Portfolio managers have ultimate discretion in how ESG issues may impact a portfolio’s holdings, and depending on their analysis, investment decisions may not be affected by ESG factors.
- ESG Focused: An investment strategy that focuses on ESG factors seeks to invest, under normal market conditions, in securities that meet certain ESG criteria or standards in an effort to promote sustainable characteristics, in addition to seeking superior, long-term, risk-adjusted returns. This investment focus may limit the investment opportunities available to a portfolio. Therefore, the portfolio may underperform or perform differently than other portfolios that do not have an ESG investment focus. ESG-focused investment strategies include but are not limited to impact, best-in-class, positive screening, exclusionary, and thematic approaches.
American Century Investment Management (UK) Limited is authorised and regulated by the Financial Conduct Authority. American Century Investment Management (UK) Limited is registered in England and Wales. Registered number: 06520426. Registered office: 12 Henrietta Street, 4th Floor, London, WC2E 8LH.
American Century Investments (EU) GmbH is registered with the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)). American Century Investment Management, Inc. is not authorised by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)).
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