Sustainable, Responsible &/or ESG Policy:

The FF Sustainable Climate Solutions Fund aims to achieve long term capital growth primarily through investments in equity securities of companies throughout the world, including those in countries considered to be emerging markets.

The fund actively seeks to select companies which are enabling global decarbonisation via technologies and solutions which materially reduce greenhouse gas (carbon dioxide equivalent) emissions versus incumbent technologies. Decarbonisation is measure in two ways, as described in the portfolio information section below. Investments will include companies involved in the design, manufacture or sale of products or services in technologies or solutions such as (but not limited to): electric vehicles, green hydrogen, autonomous vehicles, ride pooling, renewable energy, smart grids, industrial automation, agricultural efficiency, cloud computing, cellular networks, building efficiency solutions (including insulation, Light-Emitting Diode (LED) lighting and smart building systems) recycling, alternative meat / milk, e-health, e-work, and e-learning. This list of decarbonisation technologies is not exclusive and can expand to include new solutions in the future.

The climate emergency is real and there is growing momentum and widespread acknowledgement by governments, corporations and society as a whole that climate action is the need of our times. In order to keep global warming to the 1.5 degree Celsius above pre-industrial levels as recommended in the Paris Agreement, the global economy will need to go through a radical transformation, affecting every area of human activity. This transformation will span decades and have significant investment implications, creating structural growth opportunities in some sectors while rendering some business models obsolete.

The fund excludes companies which actually use stockpile, produce or transfer cluster munitions, anti-personnel mines and United Nations Global Compact (UNGC) violators based on guidance from international conventions and supranational bodies. The fund employs further exclusions at the 5% revenue level for production and/or distribution of tobacco, conventional and controversial weapons, semi-automatic firearms, thermal coal, arctic oil and gas, oil sands and Sovereigns.

The fund is part of the Fidelity Sustainable Family of Funds and adopts a Sustainable Thematic strategy under which a minimum of 90% of the fund’s net assets will be analysed as to whether they maintain Environmental, Social and Governance (ESG) characteristics and a minimum of 70% of the fund’s net assets will be invested in securities deemed to maintain favourable ESG characteristics, as described in the section entitled 'Sustainable Investing and ESG Integration' in the prospectus. When selecting investments, the fund’s investment universe, as represented by the index (for the purpose of this calculation), will be reduced by at least 20% due to the exclusion of issuers on the basis of their ESG characteristics.

Controversies involving environmental characteristics are regularly monitored. Environmental characteristics are analysed by our fundamental analysts and rated through Fidelity ESG Ratings. The fund seeks to promote these characteristics by adhering to the Fidelity Sustainable Family Framework,

The fund may invest its assets directly in China A and B shares. 

The fund is actively managed. The Portfolio Manager will, when selecting investments for the fund and for the purposes of monitoring risk, reference MSCI All Country World Index as the index constituents are representative of the type of companies the fund invests in. The fund’s performance can be assessed against its index. 

The Portfolio Manager has a wide range of discretion relative to the index. While the fund will hold assets that are components of the index, it may also invest in companies, countries or sectors that are not included in, and that have different weightings from, the index in order to take advantage of investment opportunities. It is expected that over long time periods, the fund’s performance will differ from the index. However, over short time periods the fund’s performance may be close to the index, depending on market conditions.

Shareholders’ attention is drawn to the fact that the index is not one which integrates environmental considerations. Instead, the fund promotes environmental characteristics by adhering to the Fidelity Sustainable Family Framework, as described above.

Process:

The fund aims to achieve capital growth over the long term by investing in sustainable investments.

The multi-stage investment process consists of:

• Investment universe continually monitored and updated
• Shortlist of high quality, high thematic purity names we would like to own, monitored and updated
• Idea generation from the thematic and SI assessed universe/shortlist
• Stock research and validation
• Portfolio construction and risk management
• Portfolio monitoring and oversight
• Active engagement

 Idea generation

Idea generation stems primarily from the Fidelity research platform. Fidelity has developed one of the industry’s largest research operations with 107* equity research professionals spread across various locations covering approximately 95% of the global equity universe by market cap.

Our analyst team provide both proprietary fundamental and sustainability analysis which allow us to create an investible universe for the fund consisting of <300 companies which have significant exposure to decarbonisation solutions. We have identified solutions, which are bucketed within four themes: Carbon Reduction, Clean Power, Green Fuels and Green Mobility. The opportunity set will evolve over time as new technologies will be included as they emerge.

Stock research and validation

The Portfolio Manager applies a purity factor to identify  companies with >20% of revenues or profits exposed to one or more of these solutions. In aggregate, the fund derives >60% revenues from these themes, and the majority of companies within the fund derive at least 20% revenue (and or profits) from one or more of these themes. This is a stringent measure and companies at the lower end of this threshold have large scope for incremental growth and future value creation. Using a combination of our research, third-party research including thematic research, expert calls, ESG calls and industry conferences, inputs from quantitative screens and company meetings including direct engagement, the Portfolio Manager further narrows the universe. He identifies companies with structural growth drivers, operating in industries with high barriers to entry, attractive competitive dynamics, sustainable returns and ability to compound. A healthy balance sheet, consistent cash flow generation and solid management track record are also important. Only stocks which satisfy the investment philosophy and offer a 50 - 100% upside over a four-year period are considered for further analysis.

Stock research and validation will consist of detailed financial model and industry analysis, carried out in conjunction with the relevant analyst, with a view to gain a fundamental edge in understanding the business and the industry it operates in. We undertake valuation work using a range of valuation metrics to identify mispricing, and help assess the upside potential for each stock, its relative attractiveness versus history, versus other potential investment candidates, as well as the existing portfolio holdings. We use target prices as a guideline and a trigger to re-evaluate the investment thesis. The Portfolio Manager continuously re-evaluates the investment thesis and upside potential of each holding in the portfolio. In a stable market environment, the expected annual turnover for the portfolio is ~30-40%. Stocks are sold when:

Portfolio construction

The portfolio typically consists of 35 - 50 stocks. Position sizes are determined based on factors such as upside/ downside, growth duration, conviction, risks to fundamentals, valuation levels, intra-portfolio correlations, volatility, liquidity and risk contribution. These are managed dynamically, as remaining upside and stock volatility evolve over time.

The Portfolio Manager focuses on businesses which can be broadly classified in four core categories for investment – carbon reduction, clean power, green fuels and green mobility  The common feature across buckets is exposure to structural growth driven by decarbonisation themes as well as attractive industry dynamics and/or technological/ innovation leadership. 

Carbon Reduction - these companies have products and solutions designed to replace CO2 processes or remove carbon as an output; reduce the carbon intensity of existing processes/products; allow fossil fuels to be replaced with an electric alternative; or enable reuse/recycling of a product if it prevents carbon heavy production of materials.

Clean Power - these companies provide renewable solutions, such as wind, nuclear, solar, waste-to-energy, biomass, etc.; are network operators for transmission and distribution; provide equipment for clean power and associated networks; provide energy storage solutions; or provide services for the management or construction of clean power.

Green Fuels - these companies produce alternative green fuels or have a hydrogen supply chain as a replacement for fossil fuels.

Green Mobility - includes companies producing electrified vehicles and related infrastructure to replace traditional internal combustion engines; have a battery supply chain for electric transportation; or offer a carbon-efficient form of transport as an alternative to cars/flights, such as railways.

Additionally, companies contributing to climate change adaptation or providing products, services, or infrastructure that enhance resilience to climate change impacts, such as water management solutions, sustainable agriculture and climate-resilient infrastructure are included.

Under typical market conditions, position sizes are determined based on an anticipated range of potential outcomes. These positions are managed dynamically, with adjustments made as the remaining upside potential and stock volatility shift over time. Upon initiation, position sizes generally fall within the 1-5% range, though they are also influenced by the overall portfolio fit, taking into account factors such as correlation, risk, and the impact on diversification. This approach aims to balance risk while optimising returns across the portfolio. 

Portfolio monitoring

At the stock level, we undertake a thorough analysis of the fundamental risk of the company and the investment thesis. We also monitor all ongoing developments with the help of our analysts. At the portfolio level, we assess intra-stock correlations and focus on calibrating position sizes in order to avoid unintended factor exposures or concentration risks. We also manage the portfolio’s style exposure with a view to delivering strong relative returns across a range of market environments.

The Portfolio Manager participates in a Quarterly Fund Review (QFR) chaired by the relevant Chief Investment Officer (CIO), which is also attended by a member of the Portfolio Construction and Risk Team. This review covers portfolio construction, liquidity, positions, trading activity, characteristics, style and risk in considerable detail.

Our risk oversight process now includes a Quarterly Sustainability Review (QSR) for sustainable funds. This review is supported an approximately 20-page data pack covering a range of ESG datapoints, including; rating profiles and disparities (Fidelity and MSCI), engagement, voting, exclusions, carbon and climate data and Principle Adverse Impacts (PAIs). The QSR discussion is currently led by the Sustainability Team, in active dialogue with our Portfolio Managers, our Chief Investment Officer (CIO), the investment director, and data analysts.

The QSR is designed to further strengthen the authentic integration of sustainability throughout our range of strategies, by providing a regular and structured forum for each fund to thoughtfully discuss and debate key sustainability aspects of the portfolio and its holdings, including whether the fund is meeting its sustainability objectives and how the strategy may seek to improve and monitor its outcomes.

Although not the primary point of compliance or regulatory monitoring, the QSR provides an avenue for additional checks on and discussion of these issues. The QSR works as part of our established QFR process.

The risk management processes described above are further bolstered by independent risk oversight checks and controls. These include daily monitoring of portfolio guidelines and constraints (considering regulatory requirements) by the Compliance function, and monthly Investment Risk Committees' (IRCs') evaluations of portfolio risk exposures and their alignment with expectations.

*Source: Fidelity International, as at 31 March 2025.

Resources, Affiliations & Corporate Strategies:

As an investment manager, we have a fiduciary duty to act in the best interests of our clients. In the context of sustainable investing, we have developed an approach with three key components (integration, stewardship, and solutions) that aim to provide our clients with investment offerings that meet their financial and non-financial objectives, and to comply with rapidly evolving sustainability regulations for product labelling and disclosure.

Fidelity’s sustainable investing approach is established on the foundation of our integration tools and processes. We believe ESG factors should be integrated into different investment processes. We have designed ratings and tools to identify the relevant risks and opportunities of issuers and established other processes to ensure that ESG factors are integrated consistently in our portfolios. We will also consider research insights from third-party data providers where relevant.

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. While sustainability ratings and scores allow for easier comparison of company performance, sustainability analysis should be both quantitative and qualitative and its findings should be interpreted in the context of financial performance to provide a holistic picture of a company’s performance.

Proprietary ratings and tools sit at the heart of Fidelity’s sustainable investing approach. They build on Fidelity’s heritage of fundamental research, the contribution from investment analysts and the expertise of the Sustainability Team. These tools include:

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

The Fidelity ESG Ratings aim to provide a forward-looking assessment of the extent to which an issuer’s performance on material sustainability issues either supports, or is likely to impair, long-term value creation for shareholders. The ratings are differentiated in their forward-looking emphasis and their use of issuer interaction and due diligence by Fidelity’s fundamental analysts as the main input to identify and assess the material ESG risks impacting an issuer. 

Our ESG Ratings are integrated into Fidelity’s investment process and are available to all members of the investment team on our internal research platform. Our rating serves as an additional source of insight and as a tool to support investment decisions.

Our ratings comprise a combination of E, S, and G indicators that aim to address the most material issues in each sector, providing a forward-looking view of an issuer’s ESG practices. The ratings’ methodology reflects the evolution of Fidelity’s ESG integration approach, founded on the principle of ‘double materiality’, focusing on ESG both from a business risk perspective and in terms of the environmental and societal implications of the issuer’s operations.

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.

Our ESG Ratings framework is reviewed regularly to help identify the most material ESG factors for each sector. We aim to provide training on the ratings framework as it evolves and on specific themes and sectors to help enhance understanding of the material ESG factors required for analysis, and to enhance the quality and consistency of ratings. The in-depth nature of our approach means that our coverage is not as broad as a third-party provider, therefore we also use external research and rating providers, such as MSCI and Institutional Shareholder Services (ISS), to complement our internal research process and for the construction of our funds with specific sustainability objectives. Where possible and practical, we aim to use our own ESG ratings as a preferred data source for fundamental insight and measurement of product-level characteristics.

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.

To facilitate our assessment of an issuer’s net zero transition, we have developed a Climate Rating that assesses an issuer’s operational alignment to the objectives of the Paris Agreement (to limit global average temperature rise this century well below 2°C and to drive efforts to limit the temperature increase even further to 1.5°C above pre-industrial levels). The Climate Rating is designed to be used in conjunction with our other ESG and climate tools to provide a more holistic view of an issuer’s exposure to climate-related risks and opportunities. 

Assessment criteria cover three key areas: 

• Carbon emissions disclosure: This assessment focuses on disclosure of Scope 1, Scope 2 and material Scope 3 (based on the definition of the Greenhouse Gas (GHG) Protocol). 
• Emissions reduction targets: This assessment concentrates on the issuer’s current emissions, net zero GHG emissions ambitions, targets and carbon reduction targets. 
• Climate governance: This assessment analyses executive remuneration plans linked to climate ambitions; governance responsibilities for climate at executive level; and board committees with responsibility for oversight of climate change policies. 

For high impact sectors, additional criteria may be included to take into account the unique requirements of certain hard-to-abate sectors in relation to achieving net zero. The Climate Rating does not rely on a single climate change model or scenario. The assessment undertaken takes into account a wide range of data sources including companies’ disclosure, inputs from the Carbon Disclosure Project (CDP), ISS Climate data (e.g., Implied Temperature Rise), and the Science Based Targets initiative (SBTi).

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

Fidelity’s SDG Tool aims to provide an assessment of an issuer’s positive contribution to environmental and social outcomes. It is intended to complement Fidelity’s ESG Ratings which provide an assessment of an entity’s management of adverse impacts arising from ESG issues. The SDG Tool also supports Fidelity’s definition of ‘sustainable investments’ under Europe’s Sustainable Finance Disclosure Regulation (SFDR). We aim to provide a separate analysis of the positive and negative issues an issuer may be exposed to, to help prevent the signal value from identifying a risk being offset by an unrelated positive contribution (e.g., poor corporate governance and a catastrophic tailing-dam failure are not mitigated by selling products that help the energy transition).

Primary use cases for the output of the model are: 

• Issuer and entity-level assessment: The model provides an assessment of the percentage of an issuer’s revenue that contributes to each SDG. This can be used as an input to help define a thematic investment universe. 
• 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’. The SDG Tool is a key input in this process. 
• Reporting: The SDG Tool 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 (QSR): an internal forum to review relevant quantitative and qualitative metrics and discuss sustainability integration in specific strategies

The QSR is a component of the Quarterly Fund Reviews (QFRs) which cover performance risk, liquidity, etc. The QSR is a quantitative and qualitative exploration of a product’s sustainability profile, and may include aspects such as ESG ratings, engagement activity, climate characteristics, impact indicators and other datapoints. Attendees may include representatives from the Sustainability Team, the asset class CIO, portfolio manager(s), and risk professionals. The discussion is supported by a data pack which draws together various ESG data sources. The targeted scope of QSRs is actively managed products with a higher level of ESG integration, which may include certain EU SFDR Article 8 and Article 9 products, and UK SDR Labelled and ESG Promoted (unlabelled) products. Products disclosing under SFDR Article 6 are not subject to the QSR process. SI-related investment mandates could be covered by QSR on an optional basis or at the request of clients.

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 stewards 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. 

For further details, please refer to our Sustainable Investing Principles sustainable-investing-principles.pdf. 

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 Luxembourg. 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.

*Source: Fidelity International, as at 31 December 2025.

The team’s scope now encompasses a wide range of activities related to ESG integration, engagement, policy, product development, sales and marketing, proxy voting as well as corporate sustainability. New members have contributed additional skills in legal and thematic areas, client and distribution expertise, and governance. 

The Sustainability Team functions across Fidelity in several ways:

• Collaborates closely with the broader investment team, supporting analysts in producing ESG research and conducting company-specific engagements, driving thematic engagement outcomes with sector analysts' input, and assisting portfolio managers in integrating ESG into their investment processes through proprietary tools, training, and frameworks.
• Works in tandem with the product team to develop sustainable investing frameworks and strategies in compliance with ESG regulations and tailored to diverse investor needs.
• Assists client-facing teams and clients with sustainable investing requirements and needs, including client communications, questionnaires, reporting, and training.

The team continues to evolve based on Fidelity's sustainable investing strategy, ensuring comprehensive support for all business areas and improving the quality and outcomes of engagement across asset classes.

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. We are proactive in strengthening our links within the investment industry, to determine effective ESG initiatives, maintain ethical standards, and attend seminars and conferences to integrate ESG into the investment process. Additionally, our Sustainability Team speaks publicly at industry events on responsible investment practices and promotes transparency in corporate governance issues. Please refer to the following list of our memberships, affiliations and signatories, listed by category:

Social Disparities

• 30% Club Australia (2021)
• 30% Club Hong Kong (2022)
• 30% Club Investors Group (2020)
• 30% Club Japan (2019)
• 40:40 Vision (2020)
• Armed Forces Covenant (2019)
• BBBA Talent Accelerator (2020)
• Business in the Community, Race at Work Charter (2020)
• Diversity Project (2017)
• DWP Disability Confident Scheme (2022)
• Find it, Fix it, Prevent it (CCLA) (2020)
• Global Business Collaboration Leadership Pledge (2022)
• If not now, then when? Campaign on Racial Diversity (2020)
• Investor Initiative on Human Rights Data (2024)
• Investors Against Slavery and Trafficking Asia-Pacific (2020)
• Investor Alliance for Human Rights (2025)
• Lord Mayor's Appeal - We Can Be (2019)
• LGBT Great (2019)
• Luxembourg National Diversity Charter (2020)
• Mental Health First Aid Training (2017)
• Minority Supplier Development UK (2020)
• Mindforward Alliance (2022)
• OutBritain (2022)
• President’s Challenge Enabling Employment Pledge and Enabling Mark (2023)
• PRI Reference Group on Human Rights and Social Issues (2025)
• Progress Together (2022)
• Purple Space (2019)
• Social Mobility Foundation (2021)
• Social Enterprise UK (2021)
• Stonewall (2016)
• Talent-Wise Employment Charter and Inclusive Organisations Recognition Scheme (2022)
• UN LGBTI Standards of Conduct in Business (2019)
• Valuable 500 (2019)
• Veteran-owned UK (2021)
• WEConnect International (2021)
• Women in Finance Charter (2017)
• WorkWell Leaders (2023)
• #10000 Black Interns (2020)

Climate Change:

• Asia Investor Group on Climate Change (2020)
• CDP - formerly Carbon Disclosure Project (2019)
• China Climate Engagement Initiative (2023)
• Climate Action 100+ (2019)
• Climate Bonds Initiative (2019)
• Coalition for Climate Resilient Investment (2019)
• Financial Services Development Council (2022)
• 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 Group on Climate Change (2021)
• Net Zero Asset Managers Initiative (NZAMI) (2020)
• One Planet Asset Manager Initiative (2021)
• Partnership for Carbon Accounting Financials (2022)
• Point Zero Carbon Programme (2022)
• Powering Past Coal Alliance (2021)
• Singapore Sustainable Finance Association (2024)
• Transition Pathway Initiative (2021)
• UK Sustainable Investment and Finance Association (2010)

Good Governance:

• Asia Securities Industry and Financial Markets Association (2015)
• Asian Corporate Governance Association (2004)
• Assogestioni (2007)
• Corporate Governance Forum (2009)
• European Sustainable Investment Forum (2017)
• European Public Real Estate Association (2023)
• Hong Kong Green Finance Association (2020)
• Hong Kong Principles of Responsible Ownership (2017)
• International Corporate Governance Network (2005)
• Investment Association (2010)
• Investor Agenda (2021)
• Investor Forum - UK (2014)
• Japanese Stewardship Code (2014)
• Principles for Responsible Investing (2012)
• Responsible Investment Association Australasia (2020)
• Taiwan Stock Exchange’s Stewardship Principles for Institutional Investors (2016)
• Transition Finance Council (2025)
• UK Stewardship Code (2010)
• World Benchmarking Alliance (2020)

Nature Loss:

• Ceres - Valuing Water Finance Initiative (2022)
• Farm Animal Investment Risk and Return (2020)
• Finance for Biodiversity Pledge (2021)
• Green Praxis Biodiversity (2022)
• Investor Policy Dialogue on Deforestation (2024)
• Natural Capital Investment Alliance (2021)
• Nature Action 100 (2023)
• Taskforce on Nature-related Financial Disclosures Forum (2021)
• Finance Sector Deforestation Action (2021)

SDR Labelling:

Not eligible to use label (out of scope)