Understand emerging markets opportunities and the American Century advantage.
We believe an integrated approach to ESG investing can help increase portfolio diversification and maximize the incorporation of both ESG quality and alpha-related inputs.
To maintain the independence of our portfolio management teams and the integrity of our investment process, our ESG integration framework was designed to align with our fundamental research process and fiduciary duty. Our dedicated Head of ESG and Investment Stewardship is accountable directly to the Co-CIO of Global Growth Equity.
We employ bottom-up analysis and integrated financial and ESG variables to evaluate whether ESG issues could move the needle on a company’s market valuation or warrant decrements to its fundamental profile. Our ESG assessments are both risk-based and forward-looking in order to find idiosyncratic risks or opportunities which may flow from exposure to ESG issues.
Subject to our clients' needs, we offer solutions ranging from negative screening to best-in-class tilting, to integration to thematic investing.
We believe it is possible to deliver superior returns for our clients and generate positive impact. We distribute 40% of our annual dividends to our owner, the Stowers Institute for Medical Research, a world-class biomedical research organization.
1. Our primary mission is to deliver superior, long-term, risk-adjusted returns for our clients.
2. We focus on material ESG issues which can affect the performance of individual securities to varying degrees over time.
3. We seek to integrate the analysis of potential risks and opportunities associated with ESG issues within our fundamental research process and we strive to mitigate related downside risks or capture upside potential as necessary, without compromising our fiduciary duty to act in the best interest of our clients.
4. In addition to conducting our business with the highest ethical standards and complying with all applicable laws and regulations, our ESG approach is regularly reviewed against industry investment stewardship and governance standards, and ESG methodologies to ensure alignment with our processes.
DOWNLOAD OUR ESG POLICY
With responsible investing firmly rooted in our DNA, American Century Investments' focus on ESG factors is integral to our corporate citizenship and business model. Our ownership structure is unique in the asset management space as it enables our clients to directly support lifesaving research and contribute to the global fight against cancer.
In 1994, American Century Investments' founder, James E. Stowers Jr., and his wife Virginia—inspired by their personal experiences with cancer and a desire to use their wealth to help humanity—dedicated the vast majority of their net worth to create the Stowers Institute for Medical Research (SIMR) . SIMR is a private biomedical research institution focused on researching genetic-based diseases, including cancer. Through this distinctive ownership structure, whereby the institute is a controlling owner of American Century Investments, we have been distributing dividends to the institute since 2000. Those payments have totalled $1.5 billion.
American Century Investments' founder, James E. Stowers Jr., and his wife Virginia dedicated the vast majority of their net worth to create the Stowers Institute for Medical Research .
Transitioned multiple portfolios to "no tobacco" (NT) versions used exclusively within the One Choice® Target Date and One Choice® Target Risk Portfolios series.
Initiated research on ESG incorporation into investment processes.
Formally integrated ESG research within several global and non-U.S. equity strategies.
January: Transitioned existing Emerging Markets Equity SICAV to management under UN Global Compact guidelines.
July: Launched the U.S. Sustainable Large Cap Core strategy.
Established investment-led ESG and Investment Stewardship team.
January: Developed proprietary ESG scoring system; formalized ESG integration process across global and non-U.S. equity strategies and U.S. Sustainable Large Cap Core.
April: Established ESG Proxy team to integrate ESG matters in proxy guidelines.
August: UNPRI Signatory
November: Launched Health Care Impact Equity Strategy.
Our ESG Platform is a cross-functional team through which ESG is embedded into the way we do business every day.
Led by Guillaume Mascotto, Head of ESG and Investment Stewardship.
Vice President, Head of ESG and Investment Stewardship
• Proprietary ESG scoring
• Portfolio monitoring and controversy analysis
• Engagement analysis
• Incorporation of ESG-related proxy proposals into voting policy
• Client relationship management
• Marketing strategy
• Business Development
• Public Relations
• Portfolio construction
• Idea generation
• ESG materiality analysis
• Client ESG guidelines implementation
• Third-party data systems integration
• ESG portfolio quantitative tool design
Oversight and accountability for American Century Investments' ESG-investing activities primarily fall under the responsibility of the Office of the Chief Investment Officer (CIO). The execution of our ESG policy and management of our ESG-investing platform falls under the purview of our Head of ESG and Investment Stewardship.
American Century Investments' multi-layered ESG framework combines both macro and sector inputs with a focus on financial materiality. The framework is aligned with our fundamental analysis process, and can be applied to various investments strategies in the equity and fixed income space.
Leverage third-party research and in-house macro assessments from ESG and Investment Stewardship team.
Identify ESG issues that could potentially affect long-term, market-specific dynamics and regulatory developments.
ESG and Investment Stewardship team partners with in-house sector analysts to isolate issues that could potentially alter sector-specific competitive forces.
Level of materiality depends on company's management practices to mitigate risks.
Utilize a proprietary tool to measure and rank issuers' relative risk management performance against quantitative environmental and social indicators.
Use a complementary tool to assess relative performance on governance that applies to all sectors.
Calculate Proprietary American Century Investments' ESG Score
Consider relative ESG assessments in context of analysis/fundamental research process
Portfolio manager consider analyses when evaluating investment decisions
Investment team addresses with company management any ESG issues and controversies deemed material to an issuer's long-term financial condition
View our on-demand webinar to hear an in-depth discussion on the outlook for ESG investing in 2019.
Discussion of ESG's 2018 milestones and what is driving ESG investing.
Toward A New Ideological/Policy Framework for Environmental Negotiations and Energy Innovation
Copyright © 2011 Harvard Law School Program on Negotiation (PON)
Sustainable investing continues to gain traction across regions. Watch the video.
Hear how we integrate ESG into our investment framework. Watch the video.
Our philosophy for ESG investing is guided by four principles. Watch the video.
With responsible investing firmly rooted in our DNA, American Century Investments' focus on ESG factors is integral to our corporate citizenship and business model.
ESG investing continues to gain momentum in investment management.
Learn why we believe investors may achieve alpha with impact without compromising solid returns.
Guillaume Mascotto, head of ESG and Investment Stewardship, discusses ESG factors that are financially material for companies.
Our ESG integration process extends to our proxy voting practices.
American Century Investments' proxy voting policy and practices are guided by general fiduciary principles. We act prudently, solely in the interest of the beneficial owners of the accounts that we manage, and for the exclusive purpose of providing benefits to such persons. In short, we vote proxies in the manner that we believe will do the most to maximize shareholder value.
We subscribe to certain proxy voting services offered by Institutional Shareholder Services (ISS), which services include the ISS proxy voting platform and proxy research, including their Socially Responsible Investing (SRI) proxy research. In 2018, we created an ESG (environmental, social and governance) Proxy team which is comprised of senior legal and compliance professionals and our head of ESG and Investment Stewardship. For American Century Investments' entire equity complex, our ESG Proxy team reviews, on a weekly basis, each proposal affecting our positions. With various inputs, including the ISS SRI proxy recommendations, the ESG Proxy team assesses the financial materiality of the ESG issues underpinning the proposals and makes appropriate voting recommendations to portfolio managers.
With regard to disclosure, the firm's proxy voting policies are available on the firm's website. Please note, we are in the process of updating these policies to reflect the ESG Proxy team involvement.
This information is for educational purposes only and is not intended as investment advice.
The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.