Our ESG Approach

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ESG Insights
One point six billion: supporting lifesaving research through unique ownership structure.
Since 2006: Nearly 15 years history of responsible investing.
Less than 85 percent: majority of assets incorporate ESG considerations.

A Firmwide Commitment

We believe that incorporating environmental, social and governance considerations help manage risk and may lead to opportunities otherwise not captured by traditional financial analysis. As such, we believe that ESG integration is aligned with our fiduciary duty to serve our clients.

Victor Zhang, Chief Investment Officer, Senior Vice President

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The Monthly Monitor

This timely update provides insights into health care sector stock performance and social impact themes related to U.N. Sustainable Development Goal 3 (Good Health and Well-Being).

Sustainable Investing in Emerging Markets

There's a lot of talk about ESG investing. However, few managers have focused on emerging markets—and that's where we see a lot of potential.

The Value of ESG: Building on a Strong Foundation

Focusing on quality has historically led us to companies with strong financial and ESG characteristics.

    Our framework generates proprietary ESG assessments that are not static in time. Rather, the ESG views are both risk-based and forward looking to assess downside ESG risk propensity and capture ESG upside potential.

    Guillaume Mascotto, Vice President, Head of ESG and Investment Stewardship

    Our ESG Approach

    The environmental, social, and corporate governance (ESG) investment landscape continues to broaden, offering more opportunities to commit capital to businesses that offer attractive return potential while contributing to a better world.

    While demand has led to the proliferation of ESG information on companies, there’s a growing need for industry-wide standards of reporting. At American Century Investments®, we help our clients overcome the challenges by integrating in-depth ESG analysis into our investment processes.

    And partnering with us offers an opportunity unlike any other in the asset management industry. You can invest in strategies aligned with your investment objectives and impact goals—while supporting ground-breaking medical research. Through our unique ownership structure, generating results for clients also supports research that can improve health and save lives. 

    • Investment-Led ESG Expertise
    • Financial Materiality Focus
    • Solutions-Driven Platform
    • Committing Capital
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    Investment-Led ESG Expertise

    We maintain that portfolio management teams are in the best position to determine the financial merits of an investment. Our ESG and Investment Stewardship team supports this work with research directed at uncovering financially relevant exposure to ESG issues not captured by traditional financial analysis.

    Through ESG integration, we believe we can increase portfolio diversification and maximize the incorporation of both ESG quality and alpha-related inputs. Our investment professionals remain focused on security selection and constructing portfolios in line with our primary mission—to deliver superior, long-term, risk-adjusted returns aligned with client objectives.

    Multi-Layered ESG Framework

    Our dedicated ESG and Investment Stewardship team combines top-down and bottom-up inputs to identify idiosyncratic risks or return-enhancing opportunities that may flow from ESG-related issues.

    ESG MACRO ANALYSIS

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    Identify ESG issues affecting sectors and companies

    SECTOR ANALYSIS

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    Determine ESG risk exposures at sector level

    ISSUER MATERIALITY ASSESSMENT

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    Assess ESG materiality at issuer level

    Our ESG view.

    INVESTMENT TEAMS >

    Consider relative ESG assessments in context of analysis/fundamental research process.

    Address company management with any ESG issues and controversies deemed material to an issuer's long-term financial condition.

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    Exclusionary/ Negative Screening

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    ESG Integration

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    Positive/Best-in-Class ESG Tilt

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    Thematic Investing

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    Impact Investing

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    Combined Approaches

    Solutions-Driven Platform

    There are many ways to apply ESG considerations to an investment strategy. Approaches can vary based on asset class, style, time horizon, opportunity set and client objectives.

    While American Century emphasizes ESG integration as we believe it leads to better diversification and a more robust opportunity set within the investable universe, we position our ESG program as solutions driven. To that effect, we also offer bespoke ESG solutions for our clients. We are capable of, and have been, providing ESG solutions-ranging from negative screening to best-in-class tilting, to thematic, to impact investing-in relation to all our investment disciplines, subject to client requests.

    Stowers Institute for Medical Research.

    Committing Capital for More Impact

    With responsible investing firmly rooted in our DNA, American Century Investments' focus on ESG factors is integral to our corporate citizenship and business model. American Century’s founder established and endowed the Stowers Institute for Medical Research, which is dedicated to uncovering the causes, treatments and prevention of genetically based diseases, like cancer.

    The Institute owns a controlling interest in American Century. Through this unique ownership structure, dividend payments ensure the ongoing support of important work that can improve human health and save lives. Since 2000, those payments have totaled $1.6 billion.

    If we make our clients successful, then we, in turn, will be successful.

    Jim Stowers, Founder

    Evolution of ESG and Impact Investing

    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. With responsible investing firmly rooted in our DNA, American Century Investments' focus on ESG factors is integral to our corporate citizenship and business model.

     

    • 1994
    • 2006
    • 2014
    • 2016
    • 2017
    • 2018
    • 2019
    • 2020

    The Stowers Institute for Medical Research was founded by Jim and Virginia Stowers who dedicated the vast majority of their net worth to benefiting humankind.

    Through its distinct business model, American Century directs more than 40% of dividends to its owner, the Institute, to fund life-saving research that can improve human health and save lives.

    Excluded tobacco company stocks in the One Choice® Target Date and One Choice® Target Risk Portfolios series

    Formally incorporated ESG MSCI ratings/analysis into fundamental analysis of equity portfolios

    Launched first ESG-focused strategy: U.S. Sustainable Large Cap Core strategy

     

    Hired Head of ESG and Investment Stewardship

    Created ESG integration framework and proprietary scoring model

    Signed United Nations-supported Principles for Responsible Investment (PRI)

    Established firm ESG Investment Policy

    Incorporated ESG matters into Proxy Voting Policy and established ESG Proxy team

    Launched Health Care Impact strategy

    Integrated ESG analysis into additional equity and fixed income strategies

    Launched Emerging Markets Sustainable Impact strategy

    Implement engagement protocol across all investment disciplines

    Establish internal ESG training program for distribution teams

    Complete proprietary ESG certification for ESG Investment Champions

    Complete launch of proprietary ESG scoring system (equities, corporate bonds, sovereigns)

    Launch sustainable semi-transparent active ETF

    Further integrate ESG considerations across all investment disciplines

    In 1994, 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 (SIMR) .

     

    Our ESG philosophy aligns with who we are as a firm. Through our unique ownership structure, generating results for clients also supports research that can improve health and save lives. Prosper with purpose means that we can add alpha for our clients while contributing to advance humankind.

    Jonathan Thomas, CEO

    Learn More About Our ESG Approach

    • Collaborative Initiatives
    • Proxy Voting
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    Logo for Pensions for Purpose.
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    ESG Integration Process Extends to Proxy Voting Practices

    We believe the integrity of ESG integration is maintained by aligning proxy voting with our investment teams’ assessments of financially material ESG criteria. Therefore, we have incorporated the proxy process into the fundamental research process across investment strategies. The ESG Proxy team analyzes ESG issues underpinning proxy proposals and makes voting recommendations to portfolio managers, regardless of the type of portfolio that holds a particular security. 

    The firm's proxy voting policies are available here

    This information is for educational purposes only and is not intended as investment advice.

    A strategy or emphasis on environmental, social and governance factors ("ESG") 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. A portfolio's ESG investment focus may also result in the portfolio investing in securities or industry sectors that perform differently or maintain a different risk profile than the market generally or compared to underlying holdings that are not screened for ESG standards.