Our ESG Approach

Focused on delivering ESG solutions that meet our clients' evolving needs

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.

           

Key Tenets to Our ESG Approach

Details

Details

Details

Details

ESG Guiding Principles

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.

Impact Through Ownership Model

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.

Evolution of ESG and Impact Investing

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 .

2006

Transitioned multiple portfolios to "no tobacco" (NT) versions used exclusively within the One Choice® Target Date and One Choice® Target Risk Portfolios series.

2013

Initiated research on ESG incorporation into investment processes.

2014

Formally integrated ESG research within several global and non-U.S. equity strategies.

2016

January: Transitioned existing Emerging Markets Equity SICAV to management under UN Global Compact guidelines.

July: Launched the U.S. Sustainable Large Cap Core strategy.

2017

Established investment-led ESG and Investment Stewardship team.

2018

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

Additional Information

  • ESG Platform
  • ESG Framework
  • ESG Insights
  • Proxy Voting
  • Collaborative Initiatives
  • In the News

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.

Guillaume Mascotto

Guillaume Mascotto

Vice President, Head of ESG and Investment Stewardship

ESG Research

• Proprietary ESG scoring
• Portfolio monitoring and controversy analysis
• Engagement analysis

Proxy Voting

• Incorporation of ESG-related proxy proposals into voting policy

Client Support & Marketing

• Client relationship management
• Marketing strategy
• Business Development
• Public Relations

 

Investment Management

• Portfolio construction
• Idea generation
• ESG materiality analysis

Portfolio Compliance

• Client ESG guidelines implementation

Information Technology & Analytics

• Third-party data systems integration
• ESG portfolio quantitative tool design

ESG Oversight and Management

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.

Identify ESG Issues Affecting Sectors and Companies

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.


 

Determine ESG Risk Exposures at Sector Level

ESG and Investment Stewardship team partners with in-house sector analysts to isolate issues that could potentially alter sector-specific competitive forces.


 

 

 

Assess ESG Materiality at Issuer Level

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

U.N. Sustainable Development Goals Present Opportunities in Emerging Markets

U.N. Sustainable Development Goals Present Opportunities in Emerging Markets

By investing with the intention of helping to advance the Sustainable Development Goals, you can play a critical role in creating a more inclusive society.

Integrating ESG Factors into the Investment Process Moves the Needle Forward

Integrating ESG Factors into the Investment Process Moves the Needle Forward

Guillaume Mascotto, head of ESG and Investment Stewardship, discusses ESG factors that are financially material for companies.

The Importance of SDG Investing in Emerging Markets

The Importance of SDG Investing in Emerging Markets

Learn why we believe investors may achieve alpha with impact without compromising solid returns. 

On-Demand Webinar: Identifying Why and How ESG Factors Move the Needle

On-Demand Webinar: Identifying Why and How ESG Factors Move the Needle

Hear insights including ESG exposure case studies and four emerging business risks demonstrating why implementing ESG principles into an investment program is becoming increasingly important.

Forest

ESG Outlook

Discussion of ESG's 2018 milestones and what is driving ESG investing.

a digital screen with a blue world map displaying

ESG Outlook in 2019: Effective Implementation to Mitigate Risks

View our on-demand webinar to hear an in-depth discussion on the outlook for ESG investing in 2019.

close up of rain drops on a leaf

Integrating an ESG Framework

ESG investing continues to gain momentum in investment management.

close up of rain drops on a leaf

Interest in ESG Investing Is Increasing

Sustainable investing continues to gain traction across regions. Watch the video.

ivy branches tangled with green leaves

Integrating ESG Into Our Investment Framework

Hear how we integrate ESG into our investment framework. Watch the video.

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ESG Continues to Evolve

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 Guiding Principles

ESG Guiding Principles

Our philosophy for ESG investing is guided by four principles. Watch the video.

Looking up at the side of a glass building with a tree next to it.

‘Green’ Capitalism:

Toward A New Ideological/Policy Framework for Environmental Negotiations and Energy Innovation

Copyright © 2011 Harvard Law School Program on Negotiation (PON)


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.

Signatory of:

Member of:


Other Collaborations

  • CEO Action for Diversity & Inclusion™
  • Girls Who Invest
  • Money Management Institute

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.