Winnersrationale

While many asset managers have made great strides to incorporate a stronger focus on ESG in recent years, for Fidelity International such considerations form part of its DNA.

The investment group’s emphasis in this area spans the length and breadth of its business, from integration of ESG screening into the security selection process of all of its funds, to active engagement with portfolio companies, and its own corporate culture.

Among the factors that impressed the judging panel at this year’s Asset Management Awards for Excellence were the comprehensiveness of Fidelity International’s ESG platform.

To Asian private banking clients, Fidelity International offers several Sustainable Family funds covering themes ranging from climate solutions, to water and waste management, and future connectivity. Additionally, in Singapore and Hong Kong, 40 and 37 funds respectively, are classified as Article 8 funds under the EU’s Sustainable Finance Disclosure Regulation (SFDR) framework, meaning that at least 50% of their assets are invested in securities classified as having sustainable traits. In addition, all Fidelity International’s investment teams and research analysts are supported by sustainable investing specialists with skill sets ranging from climate science to corporate governance.

All of the group’s work on ESG is founded in an internal sustainability ratings system that is integrated into all investment processes and scores portfolio companies on a sliding scale that incorporates ESG-related forecasts. These sustainability ratings were overhauled in 2021 to make them more robust.

But it is Fidelity International’s work to engage with investee businesses that is perhaps most impressive.

In 2020 alone, Fidelity International tallied 923 engagements with companies. With these businesses, the asset manager held 16,000 meetings and voted at more than 3,800 shareholder meetings. During the year, Fidelity International voted against management 28% of the time, up from 24% in 2019. In July 2021, the investment group updated its voting principles and guidelines for such engagements to take into account new policies on climate change and gender diversity.

Fidelity International has launched an ESG engagement application on its internal research platform, allowing for more precise tracking and reporting on long-term company engagements. The asset manager’s commitment to Asia-Pacific in terms of ESG is highlighted by the fact that its global head of stewardship and sustainability is based in Singapore.

Active engagement by Fidelity International during the period under consideration for the Asset Management Awards for Excellence has brought about tangible positive change in several instances.

Fidelity International has engaged with banks in the region in an effort to reduce financing for coal-fired power plants across southeast Asia, following an initial engagement in 2019 that resulted in a Singaporean lender ceasing financing for new coal-fired power plants. Since then, Fidelity International has expanded such engagements to banks in geographies including China, South Korea and Japan.

In another initiative by the asset manager, it partnered with fellow investors and trade bodies to assist seafarers stranded at sea due to the COVID-19 outbreak. By targeting portfolio companies in the shipping business with a co-ordinated mass email and media campaign, Fidelity International has been able to contribute to a significant reduction in seafarers stuck at sea over the last year or so.

Fidelity International has demonstrated excellence in applying ESG standards to its internal procedures. In 2021, the company accelerated plans to cut operational carbon emissions to net zero from 2040 to 2030 on the back of improved data collection and changes to work practices brought about by the pandemic. In addition, Fidelity International in 2021 reached its 30% target for female representation in senior management roles a year ahead of schedule, prompting the business to set a new goal of 35% by 2024.

Those efforts have been recognised by distributors across Asia-Pacific. Fidelity International’s sustainability-themed funds have been onboarded by a high number of private banking platforms across the region and benefited from significant client inflows during the period under consideration.

Fidelity International is Asian Private Banker’s House of the Year – ESG.