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VALIC Company I Systematic Growth VCBCX Sustainability

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Sustainability Analysis

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Sustainability Summary

VALIC Company I Systematic Growth Fund has a number of attributes that may meet the expectations of sustainability-focused investors, despite some issues worthy of attention.

VALIC Company I Systematic Growth Fund's holdings are exposed to average levels of ESG risk relative to those of its peers in the US Equity Large Cap Growth category, thus earning it an average Morningstar Sustainability Rating of 3 globes. Competing funds in the category with ratings of 4 or 5 globes have less ESG risk in their holdings. Unlike impact, which measures positive environmental and societal outcomes attributable to an investment, ESG risk reflects the degree to which investments could be affected by material ESG issues, including climate change, biodiversity, product safety, community relations, data privacy and security, bribery and corruption, and corporate governance.

One key area of strength for VALIC Company I Systematic Growth Fund is its low Morningstar Portfolio Carbon Risk Score of 3.52 and very low fossil fuel exposure over the past 12 months, which earns it the Morningstar Low Carbon Designation. Thus, the companies held in the portfolio are in general alignment with the transition to a low-carbon economy.

One potential issue for a sustainability-focused investor is that VALIC Company I Systematic Growth Fund doesn’t have an ESG-focused mandate. Funds with an ESG-focused mandate would have a higher probability to drive positive ESG outcomes. The fund exhibits high exposure (12.15%) to companies with severe controversies. Controversies are incidents that have a negative impact on stakeholders or the environment, which create some degree of financial risk for the company. Examples of types of controversies include bribery and corruption scandals, workplace discrimination and environmental incidents. Severe and high controversies can have significant financial repercussions, ranging from legal penalties to consumer boycotts. Such controversies can also damage the reputation of both companies themselves and their shareholders.

ESG Commitment Level Asset Manager