Fidelity International

Resources, Affiliations & Corporate Strategies:

Fidelity has been committed to sustainability for over a decade. Having launched our Principles of Ownership in 2003 and as a signatory to the Principles for Responsible Investment since 2012, sustainable investing has been, and remains, a key priority. We have an extensive global research network of fundamental research analysts with broad bottom-up asset class coverage who works closely with our global sustainability team. 

As an investment manager, we have a fiduciary duty to act in the best interests of our clients. As such we have developed our approach to sustainable investing, comprising three key components (integration, stewardship, and solutions), as articulated in our Sustainable Investing Principles.  This approach aims to provide our clients with investment solutions that meet their financial and non-financial objectives, and to comply with rapidly evolving sustainability regulations for product labelling and disclosure. 

Proprietary ratings and tools sit at the heart of Fidelity’s sustainable investing approach, facilitating the integration of sustainability in our fundamental research and ensuring a consistent approach. These tools include:

 ESG Ratings: an assessment of management and mitigation of ESG risks.

Our ESG Ratings aim to provide a forward-looking assessment of an issuer’s sustainability characteristics, with emphasis on how it operates and the associated negative impact and risks.

Four key principles underpin our ESG Ratings:

• Consideration of both non-financial and financial impacts ('double materiality'). A focus on absolute impacts allows comparison across sectors and geographies.
• Providing a forward-looking perspective that is complementary to our financial forecasts, helping to inform the long-term prospects of an individual issuer. 
• Consideration of material impact across more than 100 individual subsectors for a more focused and relevant set of indicators.
• Flexible output for different use cases. Individual E, S, and G scores provide guidance for determining an overall ESG score at the issuer level and trajectory ratings.

Note: Third party ESG ratings may apply when a Fidelity ESG rating is not available. The prioritisation between third party ESG ratings and Fidelity ESG ratings may vary across products, please refer to the prospectus for more information.

 Climate Ratings: alignment to the outcome of net zero carbon emissions by 2050.

Our Climate Ratings assess an issuer’s operational alignment to the objectives of the Paris Agreement, providing a holistic view of climate-related risks and opportunities. We look at three key areas:

• Carbon emissions disclosure: Disclosure of Scope 1, Scope 2 and material Scope 3 emissions.
• Emissions reduction targets: Concentrates on current emissions, net zero GHG emissions ambitions, targets and carbon reduction targets.
• Climate governance: Analyses executive remuneration plans linked to climate ambitions, as well as governance responsibilities and oversight.

 SDG Tool: an assessment of positive contribution to the UN Sustainable Development Goals

Our SDG Tool provides an insight into an issuer’s positive contribution to environmental and social outcomes. Here, we focus on products and services (what an entity does), rather than operational alignment (how an entity operates).

It is intended to complement our ESG Ratings, which assess the management of adverse impacts arising from ESG issues.

SDG Tool primary use cases:

• Issuer and entity-level assessment - analyses the percentage of revenue that contributes to each SDG. This can be used as the input to help define a thematic investment universe.
• Sustainable Finance Disclosure Regulation (SFDR) - under SFDR, there is a requirement to identify issuers that make a positive contribution to an environmental or social outcome and can qualify as ’sustainable investments‘. 
• Reporting - provides the ability to report the contribution of a fund’s investments to the SDGs to our clients on a consistent and scalable basis.

 Quarterly Sustainability Reviews: an internal forum to review relevant quantitative and qualitative metrics and discuss sustainability integration in specific strategies.

Our integration tools and processes also support the prioritisation of stewardship activities and the development of solutions that meet different regulatory requirements and client objectives.

Furthermore, we promote active ownership as the steward of our clients’ assets, supporting real world sustainability outcomes that help us to fulfil our fiduciary duty. Effective and outcomes-focused stewardship combines bottom-up corporate engagement, top-down thematic engagement, and system-wide stewardship. This approach is essential to drive change and encourages regular engagement and dialogue which we believe is more efficient than exclusions because this simply diverts the problem elsewhere. We believe that monitoring the progress of engagements is as important as initiating them to assess change over time. The outcomes (or lack of outcomes) resulting from our engagements can be reflected by investment analysts in our ESG ratings and used to inform investment decisions. Our Voting Principles and Guidelines sets out our minimum expectations for our investee companies in key areas including climate change, deforestation, and gender diversity. 

Sustainability Team

As an active bottom-up research house, we have always looked beyond financial reporting to gauge the value of an investment. This involves maintaining ongoing dialogue with investee companies, staying vigilant to the evolving regulatory landscape, and monitoring other factors that could influence sustainable cash flows over our investment horizon, including those currently categorised as ESG. We began formally integrating ESG considerations into our investment and research processes since becoming a signatory to the Principles for Responsible Investment in October 2012. 

As a logical consequence of our focus on sustainability, we established our Sustainability Team over a decade ago. Initially a small group based in London, the team has now grown to include 30* professionals with the global presence spanning London, Singapore, Tokyo, Hong Kong, Shanghai, Sydney and Melbourne. Members of our Sustainability Team bring a diverse skill set, including expertise in research, climate science, and governance, with many boasting over a decade of experience.

The significant expansion of our team - nearly half of whom joined in 2021 or later - underscores the growing importance of sustainability within the financial services sector. This increase in team size, knowledge, and skillset has also allowed us to organise the team based on specialisation. Broadly, the team is divided into specialists focused on:

• Stewardship and research
• Strategy, product, and governance
• Client engagement

Within these broad areas, sustainable investing specialists focus on key themes such as climate, diversity, deforestation and circular economy among others.

*Source: Fidelity International, as at 31 March 2025. Excludes China AMC resources. 

Industry collaboration

Fidelity recognises the importance of networks and information platforms for sharing tools and pooling resources, using investor reporting as a source of learning. Our Sustainability Team keeps its current and potential membership of investor organisations under constant review. We monitor all international treaties, supranational organisations and other sustainability memberships to ensure we are up to date with market trends and to stay involved in the debate (listed per category):

Gender Diversity:

• 30% Club Australia (2021)
• 30% Club Hong Kong (2022)
• 30% Club Japan (2019)
• 30% Club Investors Group (2019)
• 40:40 Vision (2020)
• Bright Network Women in Leadership
• Lord Mayor's Appeal - We Can Be
• Women in Finance Charter (2017)
• Women on Boards (2018)

Social Inclusion and Diversity:

• #10000 Black Interns (2020)
• BBBA Talent Accelerator (2020)
• Black North Initiative
• Black Young Professionals
• Catalyst After School Programme
• Disability:IN (2022)
• Diversity Project
• LGBT Great (2019)
• Lord Mayor's Appeal (2019)
• Minority Supplier Development UK (2020)
• OutBritain (2022)
• President’s Challenge Enabling Employment Pledge and Enabling Mark (2023)
• Race at Work Charter
• Social Enterprise UK (2021)
• Social Mobility Foundation (2021)
• Stonewall (2016)
• Trans in the City (2021)
• Valuable 500 (2019)
• Veteran Owned UK (2021)
• WeConnect International (2021)

Climate Change:

• Asia Investor Group on Climate Change (2020)
• CDP - formerly Carbon Disclosure Project (2019)
• Climate Bonds Initiative (2019)
• Climate Investment Summit (2022)
• Coalition for Climate Resilient Investment
• Global Standard on Responsible Corporate Climate Lobbying (2022)
• Green Finance Industry Taskforce Singapore (2020)
• Glasgow Financial Alliance for Net Zero (2021)
• Institutional Investors Group on Climate Change (2020)
• Investor Agenda (2021)
• Investor Group on Climate Change (2021)
• Net Zero Asset Managers Initiative (2020)
• One Planet Asset Manager Initiative (2021)
• Partnership for Carbon Accounting Financials (2022)
• Point Zero Carbon Programme (2022)
• Powering Past Coal Alliance (2021)
• Transition Pathway Initiative (2021)
• UN Climate Change Conference (2021)

Responsible Investment and Finance:

• Asia Securities Industry and Financial Markets Association (2015)
• Asia Research & Engagement (2023)
• European Sustainable Investment Forum (2017)
• European Public Real Estate Association (2023)
• Hong Kong Green Finance Association (2020)
• International Regulatory Strategy Group
• Investment Association (2010)
• Investor Forum - UK (2014)
• Principles for Responsible Investing (2012)
• The Purposeful Company Task Force
• Responsible Investment Association Australasia (2021)
• Sustainable Trading (2005)
• UK Sustainable Investment and Finance Association (2010)
• World Benchmarking Alliance (2020)

Governance and Corporate Accountability:

• Asian Corporate Governance Association (2004)
• Assogestioni (2007)
• Corporate Governance Forum (2009)
• Hong Kong Principles of Responsible Ownership (2017)
• International Corporate Governance Network (2005)
• Japanese Stewardship Code (2014)
• Taiwan Stock Exchange’s Stewardship Principles for Institutional Investors (2016)
• UK Stewardship Code (2010)

Biodiversity:

• Finance for Biodiversity (2021)
• Finance for Biodiversity Pledge (2021)
• Green Praxis Biodiversity (2022)
• Natural Capital Investment Alliance (2021)
• Taskforce on Nature-related Financial Disclosures Forum (2021)
• The Finance Sector Deforestation Action Initiative (2023)

Other Initiatives and Collaborations:

• Council for Sustainable Business
• Edinburgh Airport Sustainability Pledge
• Environment management system standard ISO 14001 (2023)
• Farm Animal Investment Risk and Return (2020)
• Inspiring More Sustainability (2019)
• Investors Against Slavery and Trafficking Asia-Pacific (2020)
• Maastricht University & GRESB (2021)
• Mental Health First Aid Training (2017)
• WEF Stakeholder Capitalism Metrics (2019)
• WorkWell Leaders (2023)

Dialshifter:

Our organisation is helping to support the Paris Climate Agreement and the Race to Net Zero by…

We take a pro-active approach to minimising our own environmental footprint. We are committed to achieving net zero emissions by 2030 for Fidelity International’s operational emissions (including all Scope 1, 2 and 3 emissions we have direct control over). Our focus will be on the reduction of emissions through operational changes and investment in operational efficiencies, on-site renewals and purchasing of renewable energy whilst offsetting those we are unable to eradicate.

The goal at Fidelity is to conduct current and future business operations in a sustainable manner which helps create a better future for the environment. Fidelity ensures Environmental Sustainability is managed as any other critical business activity in an integrated, systematic way. The framework is designed to ensure Pollution Prevention, Carbon Reduction, Waste minimisation, responsible use of resources and compliance with legislation through good practice and continuous improvement.

Fidelity’s Commitment: 

• Manage Environmental Sustainability requirements in a systematic way aligned to the environmental management system standard ISO 14001;
• Develop carbon, Natural Resources and Waste data systems to effectively monitor and analyse performance; 
• Continuous improvement through setting realistic objectives to ensure sustainability management is improved in line with resources;
• Complying with legal and other mandatory requirements in relation to sustainability issues;
• Providing adequate control of environmental risks arising from our work activities and operations, including Pollution Prevention;
• Develop an environmentally sustainable culture where every employee can contribute towards Fidelity International goal to create a better future for the environment;
• Ensure effective communication and consultation on Environmental Sustainability with employees keeping them informed, motivated, and suitably trained;
• Ensure that business strategies, via the Environmental Sustainability Group, integrate Environmental Sustainability requirements;
• Reduce our consumption of resources (energy, water, materials, packaging), where feasible;
• Minimise Waste through a commitment to the Waste hierarchy to reduce, re-use, recover or recycle Waste, where feasible;
• To pursue Energy Efficiency in the design, maintenance, management and operation of our owned/operated buildings;
• Seek to use products that have the least possible environmental impact; and
• Reviewing and revising this policy, as necessary, at regular intervals.

Reports on environmental performance are produced covering a range of areas including energy management, carbon footprint, waste reduction, water usage and recycling. This data is collated on a monthly basis and communicated to Senior Management on a regular basis.

Our environmental management policy is based around our ability to obtain regular, accurate information on our environmental performance, not only in energy use and waste management, but also areas such as monitoring our carbon emissions in (for instance) air travel.

We receive regular reports from our incumbent service providers, and collate these for review. We then hold regular meetings with them to investigate areas for improvement. Where the meetings produce ideas which may help reduce the environmental impact of our operations, they are implemented and monitored. Where successful, they are incorporated into our procedures.

Fidelity’s corporate sustainability team have initiated carbon footprinting for a number of offices in recent years and are consolidating that in 2020 to produce global carbon emissions for Fidelity’s activities.