RLP Fidelity Sustainable Emerging Markets Equity Pn
SRI Style:
ESG Plus
SDR Labelling:
-
Product:
Pension
Fund Region:
Emerging Markets
Fund Asset Type:
Equity
Launch Date:
26/03/2010
Last Amended:
Dialshifter (
):
Fund Size:
£1.25m
(as at: 29/02/2024)
ISIN:
GB00B67PPV50
Contact Us:
Objectives:
The fund aims to achieve capital growth by investing primarily in the equity securities of, and related instruments providing exposure to, companies that have their head office in, are listed in, or exercise a predominant part of their activity in developing markets including, although not limited to, countries in Latin America, Asia, Africa, Eastern Europe, and the Middle East. The fund may invest its net assets directly in China A and B Shares.
Sustainable, Responsible
&/or ESG Overview:
The fund is part of the Fidelity Sustainable Family of Funds and adopts a Sustainable Focused 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. The average ESG rating of the fund will exceed the average ESG rating of the fund’s investment universe, as represented by the Index after the exclusion of 20% of the assets with the lowest ESG ratings. The fund is actively managed. The Portfolio Manager will reference MSCI Emerging Markets Index by seeking to outperform it as the index constituents are representative of the type of companies the fund invests in.
Primary fund last amended:
Information directly from fund manager.
Fund Filters
Sustainability - General
Funds that have policies that consider (environmental and social) sustainability issues. Strategies vary but are likely to consider environmental issues like climate change, carbon emissions, biodiversity loss, resource management, environmental impacts; and social issues like equal opportunities, human rights, labour standards, diversity and adherence to internationally recognised codes. See fund information.
Find funds which substantially focus on sustainability issues
A core element of these funds aim to encourage higher sustainability standards across business practices through responsible ownership / stewardship / engagement / voting activity
Find funds that use the UN Global Compact to inform or help direct where they can or cannot invest and will typically not invest in companies with significant breaches (low standards) - although strategies vary. (The UNGC covers a wide range of issues - search 'UNGC'). See https://unglobalcompact.org/
Environmental - General
Funds that have policies which relate to environmental issues. These will typically set out the fund's stance on issues such as pollution, climate change, resource management, biodiversity loss, carbon emissions, plastics and/or additional environmental impacts. Strategies vary. See fund information for further information.
Climate Change & Energy
Funds that have policies (documented strategies that explain their position on) climate change related issues such as greenhouse gas/carbon emissions, net zero, transitioning to lower carbon. Strategies vary. Read fund details for further information.
Funds that avoid investing in major coal, oil and/or gas (extraction) companies. Funds vary: some may exclude all companies that extract oil. Others may have exposure to oil extraction via more diversified energy companies. See fund literature to confirm details.
Funds that avoid companies that are involved in extracting oil from the Arctic regions. See fund literature for further details.
Funds that avoid investing in companies with coal, oil and gas reserves. See fund information for further details.
The fund manager excludes companies with direct involvement in fossil fuel exploration (eg coal, oil and gas companies)
Find funds that require all, or almost all, of the companies it invests in to have a ‘net zero action plan’ - meaning that the companies they invest in have worked out how they will, over time, reduce their total carbon (and other greenhouse gas) emissions to nil.
Will only invest in companies that report greenhouse gas emissions reduction strategies in line with the framework set out the by the Taskforce for Climate Related Financial Disclosure, which is increasingly becoming mandatory. See https://www.fsb-tcfd.org/ https ://www.ifrs.org/sustainability/tcfd/
Social / Employment
Find funds that have policies which set out their approach to social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact). Funds with social policies typically avoid companies with low standards or work to encourage higher standards. See fund information for detail.
Find funds that have a labour standards policy - which can be expected to mean that the fund will invest in / favour companies that have higher standards in this area - although fund strategies can vary significantly (as with all policy areas). See eg https://www.ilo.org/international-labour-standards
Find funds with policies or themes that set out their approach to health and wellbeing issues. Funds of this kind typically aim to invest in companies with high standards - or encourage high standards. Themed funds are likely to have more of an emphasis on this area. Strategies vary. See fund information for further detail.
All mining companies excluded
Ethical Values Led Exclusions
Find funds that have policies that set out their position on ethical or 'personal values' based issues. Strategies vary. See fund information for further detail.
Companies are excluded if they are involved in any aspect of the production chain for tobacco products, including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Find funds that avoid companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non-strategic military products. See fund literature for fund specific details.
Find funds with a written civilian firearms exclusion policy - meaning that they will not invest in companies that make (or perhaps also sell) handguns made for non-military users.
Find funds that avoid investment in companies involved in the production of alcohol. Strategies vary; some funds allow a small proportion of profits to come from this area. See fund literature for further information.
Find funds that avoid companies with significant involvement in the gambling industry. Some funds may allow a small proportion of profits to come from this area. See fund policy for further details.
Find funds that avoid companies that derive significant income from pornography and related areas. Strategies vary. See fund details for further information.
Human Rights
Find funds that have policies relating to human rights issues. Funds of this kind typically require companies to demonstrate higher standards, although some fund managers work to encourage improvements. Investee companies are often judged against internationally agreed norms or standards. Strategies vary. See fund information for further detail.
Find funds that have policies in place to ensure they do not invest in companies that employ children.
Find funds with policies that exclude companies or other assets where regimes are not democratic, or where people may be oppressed. May use eg. Freedom House research. Strategies vary. See fund literature for further information.
Find funds that have policies or a theme that relates to the responsible management of supply chains. These may relate to employment issues, notably people employed by their suppliers, as well as the sourcing of materials and products. See fund literature for further information.
The fund has a policy which excludes assets with involvement in Modern Slavery
Gilts & Sovereigns
Find funds that do not invest in / exclude 'sovereigns' - debt issued by governments. See eg https://www.investopedia.com/terms/s/sovereign-debt.asp
Governance & Management
Find fund options that have policies that relate to corporate governance issues such as board structure, executive remuneration, bribery and/or corporate corruption. These funds will typically avoid companies with poor practices. Strategies vary. See fund literature for further information.
Find funds that aim to avoid investing in companies with poor governance practices.(e.g. board structure, management practices etc.) Views may however vary on what counts as 'poor' practices - and funds may not immediately divest as they may prefer to work to encourage higher standards. See fund literature for further information.
Exclude companies that are subject to United Nations sanctions. See eg https://main.un.org/securitycouncil/en/content/un-sc-consolidated-list
Find funds that have policies explaining how managers will respond to assets / companies that do not comply with relevant anti-bribery and anti-corruption standards or laws. Strategies vary; options include stewardship/ engagement and divestment - or a combination. See fund literature for further information.
Find funds that have policies explaining how the fund managers take into account digital/cyber security related risks. Funds with cyber policies will typically favour companies with higher standards or that are helping to solve problems - but strategies vary. See fund literature for further information.
Fund managers encourage the companies they invest in to have more diverse board structures (e.g. more women on boards)
Find fund managers that encourage the banks and insurance companies they invest in to publish climate change related financial information - as set out by the Task Force on Climate Related Financial Disclosures (with the aim of helping investors measure and respond to climate risk).
A core element of these funds will aim to encourage higher ESG standards through responsible ownership / stewardship / engagement /voting activity
Asset Size
Find funds that invests more than half of their money into what are commonly regarded as 'large companies'. This will typically mean that the market capitalisation (or value) of the companies they hold is in excess of £5 to £10 billion.
Find funds that have SRI strategies and focus their investment stock selection on larger companies. (e.g. over circa £5-£10bn)
How The Fund Works
Find funds that focus on finding and investing in companies with positive / beneficial attributes. This strategy can be applied in addition to exclusion criteria and engagement/stewardship activity.
Find funds where their main 'ethical approach' is to avoid companies by using negative screening criteria. Read fund literature for further information.
Find funds that invest more heavily in those that have higher ESG ratings/standards or scores and less heavily in companies with lower ESG ratings. Where this is central to a fund's strategy you should expect it to invest in most sectors. Strategies vary.
Aims to avoid companies that do significant harm. This originates from the EU’s sustainable finance ‘DNSH’ (do no significant harm) work, which is not necessarily used by UK investors.
Find funds that make significant use of internationally agreed 'norms' (e.g. United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) as part of their investment selection process alongside additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
Find funds that have an ESG strategy (which is typically focused on avoiding companies that pose environmental, social or governance related risks) with additional criteria such as positive and/or negative screens, themes and stewardship strategies.
A major focus of these funds is the careful management of environmental, social and governance (ESG) related risks - typically by avoiding or being underweight in companies seen as posing major risks in these areas (i.e. not necessarily by using themes, exclusions etc).
Find funds that have published explanations of their ethical, social and/or environmental policies online (i.e. fund decision making strategies/ buy/sell &/or asset management strategies).
This fund uses, or can use, specialist strategies to aid performance which involve ‘lending’ fund assets to others at specific points in time.
Unscreened Assets & Cash
The percentage of assets held within the fund that match the fund’s sustainability objectives and are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
The percentage of assets held within the fund that match the fund’s sustainability objectives and are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
The percentage of assets held within the fund that match the fund’s sustainability objectives and are not being held purely for risk management purposes, such as derivatives and cash equivalent assets
All assets held in the fund - except cash - meet the sustainability criteria published in fund documentation.
Intended Clients & Product Options
Finds funds designed to meet the needs of individual investors with an interest in sustainability issues.
Find funds that are available via a tax efficient ISA product wrapper.
Fund Management Company Information
About The Business
Finds fund management companies that have a published company wide stewardship, engagement and / or responsible ownership policy or strategy that covers all investments. Stewardship typically involves encouraging higher ESG standards through voting and dialogue.
Collaborations & Affiliations
Find fund management companies that have partnered with Fund EcoMarket - meaning that they are helping to improve access to information on sustainable and responsible investment by paying an annual fee to us which enables us to publish information for free. Partner funds are listed ahead of other funds and have their logos displayed.
Process:
The key steps of our disciplined, repeatable investment process are:
Idea generation
The fund takes full advantage of the breadth and depth of our research coverage across the developing markets of the world, seeking out the most attractive listed companies that dominate their market either locally, or globally. We seek to capitalise on the very best stocks unearthed by our investment team, regardless of whether they are represented in the benchmark or not.
We start by excluding companies that do not meet certain thresholds from a governance perspective and emphasises companies with the most robust governance structures. We prefer the managers of the companies in which we invest to think as long-term owners of those companies. We feel such an incentive structure will help to ensure that the business is managed sustainably and in the interest of stakeholders, resulting in the sustainability of cash flows and economic returns within the business. Importantly, this includes both sustainability of financial returns, but also environmental and social considerations. Stock ideas come from our proprietary bottom-up research, company meetings as well as from external research. The Portfolio Manager and the Non-Discretionary Advisor draw on the expertise of the company’s global research network, making extensive use of our strong in-house team of equity research analysts and portfolio managers across 8* offices on the ground in Asia Pacific. There are regular meetings with analysts to discuss stock ideas and sector reviews to discuss prominent stocks and recommendations.
In addition to regular company interaction by our team of research analysts, members of the Portfolio Management Team spend an average of one week each month meeting management teams of companies. In addition, they will typically meet with 10–15 companies a week. Company meetings and local market insights are integral to establishing conviction in the investment thesis on each stock and as such, are invaluable in the generation of investment ideas across the team.
The fund is also subject to a firm-wide exclusion list, which includes, but is not limited to, companies involved in the production and/or distribution of cluster munitions and anti-personnel landmines.
The aim is to identify sectors that offer structural growth opportunities. Within such sectors the Portfolio Manager and the Non-Discretionary Advisor look for companies with strong brand, technology and scale leadership that allows them to generate sustainable high return on capital.
In addition, they look for a trustworthy management team with good capital allocation track record and that focus on complying to and improving their business’ ESG characteristics.
*Source: Fidelity International, as at 31 March 2024.
Idea validation
The Portfolio Manager and the Non-Discretionary Advisor along with our analysts engage with company managements and other stakeholders to understand the business – what they do, why they win. We look to understand sustainability of their competitive advantages, their culture and their capital allocation policy.
They also study their value chains, the competitive landscape they operate in as well as their consumers and clients to build an investment thesis. The team would challenge an investment thesis to understand where it could go wrong and be aware of any biases. Given that businesses operate in a dynamic environment, he would continue to look for changes in the company, its competitors and industry.
Sustainable investing is core to the Portfolio Manager's and the Non-Discretionary Advisor's quality-focused and fundamentals-driven investment process. They strongly believe that strong ESG practices will over time lead to lower cost or capital and higher returns for a company versus its competitors with weak ESG practices. Consumers are increasingly becoming conscious of a company’s social and environmental practices and over time this will reflect in their brand leadership and market share. Hence, continuous engagement with companies they own in the fund or those which are on their watch list are an integral part of their process. Information gathered from such engagements is regularly used in investment decision-making as well as portfolio monitoring. The result of this process is that the fund has an overweight in higher-rated ESG companies versus the reference index.
Valuation discipline
This is the last step in the process where the Portfolio Manager and the Non-Discretionary Advisor look to identify a reasonable level of sustainable or cross cycle earnings power of the business and assign an appropriate multiple and target double digit compounding over medium to long term.
Position sizes and buy/sell decisions are based on expected total shareholder return to target price.
The team believes that even for high-quality businesses, growth is rarely linear and hence a disciplined buy/sell process is important to generate/retain alpha.
Portfolio construction
The resultant portfolio will have 30 to 50 holdings (active money in the range of 75–85%) representing high conviction and low downside potential.
Although the portfolio is benchmark agnostic, the team looks to understand benchmark constituents and their stock drivers, with conviction in a top five index stock being reflected in active weight to maximise relative return.
Positions are primarily sized from 1–4% driven by risk-reward to target price, in order to reduce stock specific risks as the Portfolio Manager believes proportionally large mistakes are difficult to compensate. No stock (regardless of index weight) will be purchased if it doesn’t offer adequate return potential. Tail of portfolio constitutes of starting or exiting positions, expensive valuations or less liquid names.
Turnover is expected to be 30–50%, with a target holding period of between two to five years.
The Portfolio Manager continuously reviews the stock theses and price targets, and adherence to investment guidelines as well as the ESG characteristics of holdings within the fund. This includes actively engaging with companies, meeting with management and voting at the relevant company annual general meeting.
Resources, Affiliations & Corporate Strategies:
At Fidelity, we are dedicated to achieving the best possible risk-adjusted returns for our investors. We believe that high standards of corporate responsibility generally make good business sense and have the potential to protect and enhance investment returns. Consequently, we integrate Environmental, Social and Governance (ESG) issues into our research and investment decision-making process; we believe it has the potential to affect the long-term value of the investment.
Our integrated ESG approach is relevant across all asset classes, sectors and markets in which we invest.
ESG integration is carried out at the fundamental research analyst level within our investment teams, primarily through the implementation of Fidelity's proprietary ESG Rating. This rating leverages our internal research capabilities and our engagement with companies to inform our view on a company’s sustainability credentials.
The cornerstone of our investment approach is bottom-up research. As well as studying financial results, our portfolio managers and analysts are dedicated to carrying out additional qualitative analysis of potential investments. They visit companies in person, examining everything that could influence its business, from the shop floor to the boardroom. Customers and suppliers also come in for scrutiny. In this way we can develop a 360-degree view of every company in which we invest and ESG factors are regularly considered in this research process.
Our approach to integrating ESG aspects into our investment processes is detailed in the following policies:
Sustainable Investing Principles (Published 2013, Updated 12/2022)
Our Sustainable Investing Principles sets out the guiding principles and minimum requirements for Fidelity’s sustainable investing activities across all asset classes and geographies.
Engagement Policy (Published 02/2021)
Our Engagement Policy sets out how we undertake stewardship and shareholder engagement across our listed equity and fixed income holdings.
Exclusion Framework (Published 12/2021)
Our Exclusion Framework forms part of our Sustainable Investment Policy and defines the main requirements for an effective exclusion framework applicable throughout the organisation.
Voting Principles and Guidelines (Published 07/2021, updated 03/2023)
Our Sustainable investing voting principles and guidelines provides information on how we exercise ownership rights through voting to improve sustainable business behaviour and client returns.
Climate Investing Policy (Published 10/2021)
Our Climate Investing Policy details how we plan to work with stakeholders to reduce climate risk across all investment strategies in a way that aligns with our foundation in active, bottom-up research.
Nature Roadmap (Published 11/2023)
Our Nature Roadmap details how we are enhancing the integration of nature into our investment platform to help create a world where both people and the planet can thrive.
Deforestation Framework (Published 12/2022)
Our Deforestation Framework outlines how we engage with stakeholders to address agricultural commodity-driven deforestation risks across our investment strategies, aligned to our active, bottom-up investment approach.
All our sustainable investing related policies and reports are available on our website:
https://professionals.fidelity.co.uk/sustainable-investing/our-policies-and-reports
We use a combination of internal and external resources.
Internal
The bulk of the engagement and analysis is carried out by our research analysts who strive to go beyond studying just financial results and aim to integrate ESG and other factors into a comprehensive perspective. They are supported by our team of 34* sustainable investing specialists who engage with companies on various issues including:
- Corporate governance (for example, board structure, executive remuneration);
- Shareholder rights (for example, election of directors, capital amendments);
- Changes to regulation (for example, greenhouse gas emissions restrictions, governance codes); and
- Physical threats (for example, extreme weather, climate change, water shortages).
Our sustainable investing specialists engage with senior management of investee companies as well as their Socially Responsible Investment/ESG professionals.
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. Our suite of proprietary tools include:
- ESG ratings: An assessment designed to generate a forward-looking and holistic assessment of ESG risks and opportunities. Analysts qualify the direction of change of companies’ ESG performance (positive, neutral or negative trajectory).
- Climate ratings: An assessment that utilises our fundamental research capabilities to identify climate risks, net zero investments and targets for transition engagement within the Fidelity investment universe. It assesses which companies are in the best position to transition to net zero or have a positive trajectory towards transition. The Climate Rating is designed to complement our broader ESG Ratings, which already incorporate climate change factors.
- SDG tool: An assessment which provides the percentage of an entities or portfolio’s alignment with each SDG, and where relevant the underlying targets and indicators. This provides a quantitative, transparent, and consistent approach to measuring the alignment of portfolios against the underlying targets and indicators behind the SDGs.
External
Fidelity is a signatory to many industry initiatives such as the Principles for Responsible Investing, UK Stewardship Code and the Japanese Stewardship Code. We are also active members of the Asian Corporate Governance Association, Assogestioni, the UK Sustainable Investment and Finance Association, the UK Investor Forum and many other trade and industry bodies around the world.
Fidelity uses a number of external research sources that provide ESG-themed reports, research, ratings and data on themes such as corporate involvement in verified or alleged failures to respect international norms, for example the Ten Principles of the United Nations Global Compact as well as on carbon emission, fossil fuel and power generation. The coverage of companies varies by provider and the providers currently cover more than 10,000 companies globally.
We also subscribe to a number of corporate governance and voting advisory services, including products supported by Institutional Shareholder Services (ISS), Glass Lewis and ZD Proxy Shareholder Services. In addition to these, we leverage information from these providers:
- MSCI: ESG data and indicators, exclusions, non-carbon PAIs, ratings, controversies.
- FactSet: RBICS/GeoRev in portfolio analysis.
- Moody's: EU Taxonomy Data.
- ICE Data Services: avoided emissions.
We constantly explore new data sets and approaches that can provide enhanced insights into companies.
*Source: Fidelity International, as at 30 September 2024. Excludes China AMC resources.
Sustainability Team
Fidelity's Sustainability Team, part of Fidelity’s broader investment team, comprises sustainability and stewardship professionals with expertise in various subject areas. Consisting of 34* professionals, based in locations across Europe and the Asia Pacific region, 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.
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.
*Source: Fidelity International, as at 30 September 2024. Excludes China AMC resources.
Oversight of ESG at Fidelity
The following individuals and teams are responsible for maintaining and integrating Fidelity’s ESG policies:
- The board members of FIL Limited (the ultimate holding company of the group known as Fidelity International) are responsible for overseeing and being accountable for sustainable investing. The Sustainability Team provides regular reports to the board on its activities, at least once a year. Any changes or amendments to our Sustainable Investing Principles, including our voting guidelines, are approved by the board.
- In 2017, the company established a Sustainable Investing Operating Committee (SIOC) with the aim of providing thorough oversight of all ESG matters across the company's various jurisdictions and business areas. The committee consists of senior management team members representing all asset classes and convenes monthly to review ESG company policy changes, industry developments, client requirements, new product innovations, and regulatory updates. It also ensures the alignment of all active ESG initiatives across the company. Additionally, ad-hoc meetings may be called to address urgent issues that arise before the next scheduled meeting.
- Andrew Wells - Interim Co-Chief Investment Officer, Fixed Income, Multi Asset and Private Assets and Head of Canada and Niamh Brodie-Machura - Co-Chief Investment Officer, Equities (both members of our Global Operating Committee) have oversight and accountability for our sustainable investing strategy and activities globally.
- Jenn-Hui Tan, our Chief Sustainability Officer, oversees Fidelity’s strategy and policies on engagement, voting and ESG integration across our active product range. He manages our dedicated Sustainability Team that is comprised of 34* sustainable investing specialists, based in London, Singapore, Hong Kong, Shanghai, Melbourne, Sydney and Tokyo, who work closely with the investment management teams globally across all asset classes. They are responsible for consolidating our approach to ESG integration, engagement and voting.
- Our directors of research are directly involved in the implementation of sustainable investing principles and procedures in the company.
- Fidelity’s research analysts have overall responsibility for analysing and rating the ESG performance of the companies and buildings in which we invest. Our portfolio managers are also active in analysing the potential effects of these factors when making investment decisions, ensuring that each stock in the final portfolio adheres to the strategy’s and clients’ ESG requirements.
- The Compliance Monitoring Team monitors the portfolios with screening criteria systematically through hard-coded restrictions in the investment guidelines.
*Source: Fidelity International, as at 30 September 2024. Excludes China AMC resources.
Industry collaboration
Fidelity recognises the importance of networks and information platforms to share tools, pool resources, and make use of investor reporting as a source of learning. Fidelity is a member or signatory to the following:
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 (2020)
- 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)
Literature
| Fund Name | SRI Style | SDR Labelling | Product | Region | Asset Type | Launch Date | Last Amended |
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|---|---|---|---|---|---|---|---|---|
RLP Fidelity Sustainable Emerging Markets Equity Pn |
ESG Plus | - | Pension | Emerging Markets | Equity | 26/03/2010 | ||
ObjectivesThe fund aims to achieve capital growth by investing primarily in the equity securities of, and related instruments providing exposure to, companies that have their head office in, are listed in, or exercise a predominant part of their activity in developing markets including, although not limited to, countries in Latin America, Asia, Africa, Eastern Europe, and the Middle East. The fund may invest its net assets directly in China A and B Shares. |
Fund Size: £1.25m (as at: 29/02/2024) ISIN: GB00B67PPV50 Contact Us: salessupport@fidelity.co.uk |
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Information received directly from Fund Manager |
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Fund FiltersSustainability - General
Sustainability policy
Funds that have policies that consider (environmental and social) sustainability issues. Strategies vary but are likely to consider environmental issues like climate change, carbon emissions, biodiversity loss, resource management, environmental impacts; and social issues like equal opportunities, human rights, labour standards, diversity and adherence to internationally recognised codes. See fund information.
Sustainability focus
Find funds which substantially focus on sustainability issues
Encourage more sustainable practices through stewardship
A core element of these funds aim to encourage higher sustainability standards across business practices through responsible ownership / stewardship / engagement / voting activity
UN Global Compact linked exclusion policy
Find funds that use the UN Global Compact to inform or help direct where they can or cannot invest and will typically not invest in companies with significant breaches (low standards) - although strategies vary. (The UNGC covers a wide range of issues - search 'UNGC'). See https://unglobalcompact.org/ Environmental - General
Environmental policy
Funds that have policies which relate to environmental issues. These will typically set out the fund's stance on issues such as pollution, climate change, resource management, biodiversity loss, carbon emissions, plastics and/or additional environmental impacts. Strategies vary. See fund information for further information. Climate Change & Energy
Climate change / greenhouse gas emissions policy
Funds that have policies (documented strategies that explain their position on) climate change related issues such as greenhouse gas/carbon emissions, net zero, transitioning to lower carbon. Strategies vary. Read fund details for further information.
Coal, oil & / or gas majors excluded
Funds that avoid investing in major coal, oil and/or gas (extraction) companies. Funds vary: some may exclude all companies that extract oil. Others may have exposure to oil extraction via more diversified energy companies. See fund literature to confirm details.
Arctic drilling exclusion
Funds that avoid companies that are involved in extracting oil from the Arctic regions. See fund literature for further details.
Fossil fuel reserves exclusion
Funds that avoid investing in companies with coal, oil and gas reserves. See fund information for further details.
Fossil fuel exploration exclusion - direct involvement
The fund manager excludes companies with direct involvement in fossil fuel exploration (eg coal, oil and gas companies)
Require net zero action plan from all/most companies
Find funds that require all, or almost all, of the companies it invests in to have a ‘net zero action plan’ - meaning that the companies they invest in have worked out how they will, over time, reduce their total carbon (and other greenhouse gas) emissions to nil.
TCFD reporting requirement (Becoming IFRS)
Will only invest in companies that report greenhouse gas emissions reduction strategies in line with the framework set out the by the Taskforce for Climate Related Financial Disclosure, which is increasingly becoming mandatory. See https://www.fsb-tcfd.org/ https ://www.ifrs.org/sustainability/tcfd/ Social / Employment
Social policy
Find funds that have policies which set out their approach to social issues (e.g. human rights, labour standards, equal opportunities, child labour and adherence to internationally recognised codes such as the UN Global Compact). Funds with social policies typically avoid companies with low standards or work to encourage higher standards. See fund information for detail.
Labour standards policy
Find funds that have a labour standards policy - which can be expected to mean that the fund will invest in / favour companies that have higher standards in this area - although fund strategies can vary significantly (as with all policy areas). See eg https://www.ilo.org/international-labour-standards
Health & wellbeing policies or theme
Find funds with policies or themes that set out their approach to health and wellbeing issues. Funds of this kind typically aim to invest in companies with high standards - or encourage high standards. Themed funds are likely to have more of an emphasis on this area. Strategies vary. See fund information for further detail.
Mining exclusion
All mining companies excluded Ethical Values Led Exclusions
Ethical policies
Find funds that have policies that set out their position on ethical or 'personal values' based issues. Strategies vary. See fund information for further detail.
Tobacco and related product manufacturers excluded
Companies are excluded if they are involved in any aspect of the production chain for tobacco products, including cigarettes, vaping, e-cigarettes, chewing tobacco and cigars.
Armaments manufacturers avoided
Find funds that avoid companies that manufacture products intended specifically for military use. Fund strategies vary - particularly with regard to non-strategic military products. See fund literature for fund specific details.
Civilian firearms production exclusion
Find funds with a written civilian firearms exclusion policy - meaning that they will not invest in companies that make (or perhaps also sell) handguns made for non-military users.
Alcohol production excluded
Find funds that avoid investment in companies involved in the production of alcohol. Strategies vary; some funds allow a small proportion of profits to come from this area. See fund literature for further information.
Gambling avoidance policy
Find funds that avoid companies with significant involvement in the gambling industry. Some funds may allow a small proportion of profits to come from this area. See fund policy for further details.
Pornography avoidance policy
Find funds that avoid companies that derive significant income from pornography and related areas. Strategies vary. See fund details for further information. Human Rights
Human rights policy
Find funds that have policies relating to human rights issues. Funds of this kind typically require companies to demonstrate higher standards, although some fund managers work to encourage improvements. Investee companies are often judged against internationally agreed norms or standards. Strategies vary. See fund information for further detail.
Child labour exclusion
Find funds that have policies in place to ensure they do not invest in companies that employ children.
Oppressive regimes (not free or democratic) exclusion policy
Find funds with policies that exclude companies or other assets where regimes are not democratic, or where people may be oppressed. May use eg. Freedom House research. Strategies vary. See fund literature for further information.
Responsible supply chain policy or theme
Find funds that have policies or a theme that relates to the responsible management of supply chains. These may relate to employment issues, notably people employed by their suppliers, as well as the sourcing of materials and products. See fund literature for further information.
Modern slavery exclusion policy
The fund has a policy which excludes assets with involvement in Modern Slavery Gilts & Sovereigns
Does not invest in sovereigns
Find funds that do not invest in / exclude 'sovereigns' - debt issued by governments. See eg https://www.investopedia.com/terms/s/sovereign-debt.asp Governance & Management
Governance policy
Find fund options that have policies that relate to corporate governance issues such as board structure, executive remuneration, bribery and/or corporate corruption. These funds will typically avoid companies with poor practices. Strategies vary. See fund literature for further information.
Avoids companies with poor governance
Find funds that aim to avoid investing in companies with poor governance practices.(e.g. board structure, management practices etc.) Views may however vary on what counts as 'poor' practices - and funds may not immediately divest as they may prefer to work to encourage higher standards. See fund literature for further information.
UN sanctions exclusion
Exclude companies that are subject to United Nations sanctions. See eg https://main.un.org/securitycouncil/en/content/un-sc-consolidated-list
Anti-bribery and corruption policy
Find funds that have policies explaining how managers will respond to assets / companies that do not comply with relevant anti-bribery and anti-corruption standards or laws. Strategies vary; options include stewardship/ engagement and divestment - or a combination. See fund literature for further information.
Digital / cyber security policy
Find funds that have policies explaining how the fund managers take into account digital/cyber security related risks. Funds with cyber policies will typically favour companies with higher standards or that are helping to solve problems - but strategies vary. See fund literature for further information.
Encourage board diversity e.g. gender
Fund managers encourage the companies they invest in to have more diverse board structures (e.g. more women on boards)
Encourage TCFD alignment for banks & insurance companies
Find fund managers that encourage the banks and insurance companies they invest in to publish climate change related financial information - as set out by the Task Force on Climate Related Financial Disclosures (with the aim of helping investors measure and respond to climate risk).
Encourage higher ESG standards through stewardship activity
A core element of these funds will aim to encourage higher ESG standards through responsible ownership / stewardship / engagement /voting activity Asset Size
Over 50% large cap companies
Find funds that invests more than half of their money into what are commonly regarded as 'large companies'. This will typically mean that the market capitalisation (or value) of the companies they hold is in excess of £5 to £10 billion.
Invests mostly in large cap companies / assets
Find funds that have SRI strategies and focus their investment stock selection on larger companies. (e.g. over circa £5-£10bn) How The Fund Works
Positive selection bias
Find funds that focus on finding and investing in companies with positive / beneficial attributes. This strategy can be applied in addition to exclusion criteria and engagement/stewardship activity.
Negative selection bias
Find funds where their main 'ethical approach' is to avoid companies by using negative screening criteria. Read fund literature for further information.
ESG weighted / tilt
Find funds that invest more heavily in those that have higher ESG ratings/standards or scores and less heavily in companies with lower ESG ratings. Where this is central to a fund's strategy you should expect it to invest in most sectors. Strategies vary.
Significant harm exclusion
Aims to avoid companies that do significant harm. This originates from the EU’s sustainable finance ‘DNSH’ (do no significant harm) work, which is not necessarily used by UK investors.
Combines norms based exclusions with other SRI criteria
Find funds that make significant use of internationally agreed 'norms' (e.g. United Nations Global Compact - UNGC - or the UN Sustainable Development Goals - SDGs) as part of their investment selection process alongside additional SRI criteria such as positive or negative stock selection policies and/or stewardship strategies.
Combines ESG strategy with other SRI criteria
Find funds that have an ESG strategy (which is typically focused on avoiding companies that pose environmental, social or governance related risks) with additional criteria such as positive and/or negative screens, themes and stewardship strategies.
Focus on ESG risk mitigation
A major focus of these funds is the careful management of environmental, social and governance (ESG) related risks - typically by avoiding or being underweight in companies seen as posing major risks in these areas (i.e. not necessarily by using themes, exclusions etc).
SRI / ESG / Ethical policies explained on website
Find funds that have published explanations of their ethical, social and/or environmental policies online (i.e. fund decision making strategies/ buy/sell &/or asset management strategies).
Use stock / securities lending
This fund uses, or can use, specialist strategies to aid performance which involve ‘lending’ fund assets to others at specific points in time. Unscreened Assets & Cash
Assets typically aligned to sustainability objectives 70 - 79%
The percentage of assets held within the fund that match the fund’s sustainability objectives and are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
Assets typically aligned to sustainability objectives 80 – 89%
The percentage of assets held within the fund that match the fund’s sustainability objectives and are not being held purely for risk management purposes, such as derivatives and cash equivalent assets.
Assets typically aligned to sustainability objectives > 90%
The percentage of assets held within the fund that match the fund’s sustainability objectives and are not being held purely for risk management purposes, such as derivatives and cash equivalent assets
All assets (except cash) meet published sustainability criteria
All assets held in the fund - except cash - meet the sustainability criteria published in fund documentation. Intended Clients & Product Options
Intended for investors interested in sustainability
Finds funds designed to meet the needs of individual investors with an interest in sustainability issues.
Available via an ISA (OEIC only)
Find funds that are available via a tax efficient ISA product wrapper. Fund Management Company InformationAbout The Business
Responsible ownership / stewardship policy or strategy (AFM company wide)
Finds fund management companies that have a published company wide stewardship, engagement and / or responsible ownership policy or strategy that covers all investments. Stewardship typically involves encouraging higher ESG standards through voting and dialogue. Collaborations & Affiliations
Fund EcoMarket partner
Find fund management companies that have partnered with Fund EcoMarket - meaning that they are helping to improve access to information on sustainable and responsible investment by paying an annual fee to us which enables us to publish information for free. Partner funds are listed ahead of other funds and have their logos displayed. Process:The key steps of our disciplined, repeatable investment process are: Idea generation The fund takes full advantage of the breadth and depth of our research coverage across the developing markets of the world, seeking out the most attractive listed companies that dominate their market either locally, or globally. We seek to capitalise on the very best stocks unearthed by our investment team, regardless of whether they are represented in the benchmark or not. We start by excluding companies that do not meet certain thresholds from a governance perspective and emphasises companies with the most robust governance structures. We prefer the managers of the companies in which we invest to think as long-term owners of those companies. We feel such an incentive structure will help to ensure that the business is managed sustainably and in the interest of stakeholders, resulting in the sustainability of cash flows and economic returns within the business. Importantly, this includes both sustainability of financial returns, but also environmental and social considerations. Stock ideas come from our proprietary bottom-up research, company meetings as well as from external research. The Portfolio Manager and the Non-Discretionary Advisor draw on the expertise of the company’s global research network, making extensive use of our strong in-house team of equity research analysts and portfolio managers across 8* offices on the ground in Asia Pacific. There are regular meetings with analysts to discuss stock ideas and sector reviews to discuss prominent stocks and recommendations. In addition to regular company interaction by our team of research analysts, members of the Portfolio Management Team spend an average of one week each month meeting management teams of companies. In addition, they will typically meet with 10–15 companies a week. Company meetings and local market insights are integral to establishing conviction in the investment thesis on each stock and as such, are invaluable in the generation of investment ideas across the team. The fund is also subject to a firm-wide exclusion list, which includes, but is not limited to, companies involved in the production and/or distribution of cluster munitions and anti-personnel landmines. The aim is to identify sectors that offer structural growth opportunities. Within such sectors the Portfolio Manager and the Non-Discretionary Advisor look for companies with strong brand, technology and scale leadership that allows them to generate sustainable high return on capital. In addition, they look for a trustworthy management team with good capital allocation track record and that focus on complying to and improving their business’ ESG characteristics. *Source: Fidelity International, as at 31 March 2024.
Idea validation The Portfolio Manager and the Non-Discretionary Advisor along with our analysts engage with company managements and other stakeholders to understand the business – what they do, why they win. We look to understand sustainability of their competitive advantages, their culture and their capital allocation policy. They also study their value chains, the competitive landscape they operate in as well as their consumers and clients to build an investment thesis. The team would challenge an investment thesis to understand where it could go wrong and be aware of any biases. Given that businesses operate in a dynamic environment, he would continue to look for changes in the company, its competitors and industry. Sustainable investing is core to the Portfolio Manager's and the Non-Discretionary Advisor's quality-focused and fundamentals-driven investment process. They strongly believe that strong ESG practices will over time lead to lower cost or capital and higher returns for a company versus its competitors with weak ESG practices. Consumers are increasingly becoming conscious of a company’s social and environmental practices and over time this will reflect in their brand leadership and market share. Hence, continuous engagement with companies they own in the fund or those which are on their watch list are an integral part of their process. Information gathered from such engagements is regularly used in investment decision-making as well as portfolio monitoring. The result of this process is that the fund has an overweight in higher-rated ESG companies versus the reference index.
Valuation discipline This is the last step in the process where the Portfolio Manager and the Non-Discretionary Advisor look to identify a reasonable level of sustainable or cross cycle earnings power of the business and assign an appropriate multiple and target double digit compounding over medium to long term. Position sizes and buy/sell decisions are based on expected total shareholder return to target price. The team believes that even for high-quality businesses, growth is rarely linear and hence a disciplined buy/sell process is important to generate/retain alpha.
Portfolio construction The resultant portfolio will have 30 to 50 holdings (active money in the range of 75–85%) representing high conviction and low downside potential. Although the portfolio is benchmark agnostic, the team looks to understand benchmark constituents and their stock drivers, with conviction in a top five index stock being reflected in active weight to maximise relative return. Positions are primarily sized from 1–4% driven by risk-reward to target price, in order to reduce stock specific risks as the Portfolio Manager believes proportionally large mistakes are difficult to compensate. No stock (regardless of index weight) will be purchased if it doesn’t offer adequate return potential. Tail of portfolio constitutes of starting or exiting positions, expensive valuations or less liquid names. Turnover is expected to be 30–50%, with a target holding period of between two to five years. The Portfolio Manager continuously reviews the stock theses and price targets, and adherence to investment guidelines as well as the ESG characteristics of holdings within the fund. This includes actively engaging with companies, meeting with management and voting at the relevant company annual general meeting.
Resources, Affiliations & Corporate Strategies:At Fidelity, we are dedicated to achieving the best possible risk-adjusted returns for our investors. We believe that high standards of corporate responsibility generally make good business sense and have the potential to protect and enhance investment returns. Consequently, we integrate Environmental, Social and Governance (ESG) issues into our research and investment decision-making process; we believe it has the potential to affect the long-term value of the investment. Our integrated ESG approach is relevant across all asset classes, sectors and markets in which we invest. ESG integration is carried out at the fundamental research analyst level within our investment teams, primarily through the implementation of Fidelity's proprietary ESG Rating. This rating leverages our internal research capabilities and our engagement with companies to inform our view on a company’s sustainability credentials. The cornerstone of our investment approach is bottom-up research. As well as studying financial results, our portfolio managers and analysts are dedicated to carrying out additional qualitative analysis of potential investments. They visit companies in person, examining everything that could influence its business, from the shop floor to the boardroom. Customers and suppliers also come in for scrutiny. In this way we can develop a 360-degree view of every company in which we invest and ESG factors are regularly considered in this research process.
Our approach to integrating ESG aspects into our investment processes is detailed in the following policies:
Sustainable Investing Principles (Published 2013, Updated 12/2022) Our Sustainable Investing Principles sets out the guiding principles and minimum requirements for Fidelity’s sustainable investing activities across all asset classes and geographies.
Engagement Policy (Published 02/2021) Our Engagement Policy sets out how we undertake stewardship and shareholder engagement across our listed equity and fixed income holdings.
Exclusion Framework (Published 12/2021) Our Exclusion Framework forms part of our Sustainable Investment Policy and defines the main requirements for an effective exclusion framework applicable throughout the organisation.
Voting Principles and Guidelines (Published 07/2021, updated 03/2023) Our Sustainable investing voting principles and guidelines provides information on how we exercise ownership rights through voting to improve sustainable business behaviour and client returns.
Climate Investing Policy (Published 10/2021) Our Climate Investing Policy details how we plan to work with stakeholders to reduce climate risk across all investment strategies in a way that aligns with our foundation in active, bottom-up research.
Nature Roadmap (Published 11/2023) Our Nature Roadmap details how we are enhancing the integration of nature into our investment platform to help create a world where both people and the planet can thrive.
Deforestation Framework (Published 12/2022) Our Deforestation Framework outlines how we engage with stakeholders to address agricultural commodity-driven deforestation risks across our investment strategies, aligned to our active, bottom-up investment approach.
All our sustainable investing related policies and reports are available on our website: https://professionals.fidelity.co.uk/sustainable-investing/our-policies-and-reports
We use a combination of internal and external resources. Internal The bulk of the engagement and analysis is carried out by our research analysts who strive to go beyond studying just financial results and aim to integrate ESG and other factors into a comprehensive perspective. They are supported by our team of 34* sustainable investing specialists who engage with companies on various issues including:
Our sustainable investing specialists engage with senior management of investee companies as well as their Socially Responsible Investment/ESG professionals.
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. Our suite of proprietary tools include:
External Fidelity is a signatory to many industry initiatives such as the Principles for Responsible Investing, UK Stewardship Code and the Japanese Stewardship Code. We are also active members of the Asian Corporate Governance Association, Assogestioni, the UK Sustainable Investment and Finance Association, the UK Investor Forum and many other trade and industry bodies around the world. Fidelity uses a number of external research sources that provide ESG-themed reports, research, ratings and data on themes such as corporate involvement in verified or alleged failures to respect international norms, for example the Ten Principles of the United Nations Global Compact as well as on carbon emission, fossil fuel and power generation. The coverage of companies varies by provider and the providers currently cover more than 10,000 companies globally. We also subscribe to a number of corporate governance and voting advisory services, including products supported by Institutional Shareholder Services (ISS), Glass Lewis and ZD Proxy Shareholder Services. In addition to these, we leverage information from these providers:
We constantly explore new data sets and approaches that can provide enhanced insights into companies. *Source: Fidelity International, as at 30 September 2024. Excludes China AMC resources.
Sustainability Team Fidelity's Sustainability Team, part of Fidelity’s broader investment team, comprises sustainability and stewardship professionals with expertise in various subject areas. Consisting of 34* professionals, based in locations across Europe and the Asia Pacific region, 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. The Sustainability Team functions across Fidelity in several ways:
*Source: Fidelity International, as at 30 September 2024. Excludes China AMC resources.
Oversight of ESG at Fidelity The following individuals and teams are responsible for maintaining and integrating Fidelity’s ESG policies:
*Source: Fidelity International, as at 30 September 2024. Excludes China AMC resources.
Industry collaboration Fidelity recognises the importance of networks and information platforms to share tools, pool resources, and make use of investor reporting as a source of learning. Fidelity is a member or signatory to the following: Gender Diversity:
Social Inclusion and Diversity:
Climate Change:
Responsible Investment and Finance:
Governance and Corporate Accountability:
Biodiversity:
Other Initiatives and Collaborations:
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