Sustainable Finance Lobbying Overview: Capital Group appears to have had somewhat limited engagement on sustainable finance policies, stating top-line support for ESG disclosure but appearing cautious of other forms of regulation.

Top-Line Messaging on Sustainable Finance Policy: Capital Group has recognized the risks climate change poses to the financial system, but it is unclear whether it supports systemic reforms to address these risks. In 2022, Capital Group joined the Net Zero Asset Managers initiative, supporting the goal of net zero emissions by 2050. Capital Group has mentioned engaging with regulators on sustainable finance policies but has not described details of these engagements. In 2020, Capital Group stated opposition to “prescriptive requirements” to achieve sustainable finance goals in the EU.

Position on Regulated Corporate ESG Disclosure: Capital Group has taken mixed positions on regulated corporate ESG disclosure, supporting disclosure generally but outlining concerns with some specific policy provisions. In a 2021 paper Capital Group stated support for policymakers working to create a strong framework for company disclosure, and it has supported regulatory implementation of the TCFD. In its 2022 Global Citizenship and Sustainability Report, Capital Group stated that it actively engages with regulators to “advocate for enhanced disclosure.” In a 2021 letter to the SEC Capital Group supported regulated corporate ESG disclosure aligned with TCFD recommendations, but took a mixed position on the SEC’s proposed disclosure rule in 2022, asserting that the proposal strayed from the Commission’s traditional materiality standard. In 2020 comments on the EU’s Renewed Sustainable Finance Strategy it stated support for the Non-Financial Reporting Directive (NFRD). In the same comments, however, Capital Group opposed mandating disclosure of specific targets related to Paris Agreements goals, instead supporting a more “dynamic” disclosure framework. In 2022, Capital Group expressed strong support for the International Sustainability Standards Board’s proposed climate disclosure standards, which are likely to inform government policy.

Position on ESG Standards/Labels/Benchmarks: Capital Group has been generally unsupportive of policy on ESG labels and standards. In 2020 comments on the EU Renewed Sustainable Finance Strategy, Capital Group did not support the European Commission’s proposed policy on ESG labels for investment funds and did not support the EU taking action to create an ESG benchmark. In a 2020 consultation on the EU Green Bond Standard Capital Group supported the standard overall but advocated for a flexible and proportionate approach when extending the standard to new sectors. In comments to the SEC in August 2022, Capital Group took a mixed position on the Commission’s proposed categorization of ESG-related funds.

Position on Incorporating ESG Factors Into Investor Duties: Capital Group has taken a mixed but overall negative position on incorporating ESG factors into investor duties. In response to the Joint European Supervisory Authorities’ consultation on standards for the Sustainable Finance Disclosure Regulation (SFDR) in 2020, Capital Group suggested that the proposed requirements were too prescriptive and should be more flexible. In the same comments, Capital Group did not support the inclusion of ESG impacts (negative externalities) in investor duties. Capital Group took a broadly positive position on ESG investing in response to Trump administration rollbacks in 2020; not supporting a Department of Labor rule that sought to limit shareholder rights and taking a mixed position on a proposed rule that limited ESG investing. In comments to the SEC in 2022, Capital Group outlined concerns with proposed disclosure requirements for ESG investors, advocating for less ambitious disclosure requirements for “ESG integration” funds.

Industry Association Governance: Capital Group has listed membership of trade associations but has not given details on the sustainable finance policy positions of these organizations or any actions taken to address misalignments.