Fidelity International expands voting guidelines with new diversity and climate change policies globally

  • Fidelity introduces new policies on climate change and gender diversity
  • Fidelity will hold investee companies to account for failing to address climate change crisis
  • Fidelity calls for investee companies to reach 30% board gender diversity target in most developed markets and 15% in all other markets globally

Fidelity International (Fidelity), a global asset manager with total client assets of $787.1 billion, today announces the publication of its Sustainable Investing Voting Principles and Guidelines, introducing new global policies on climate change and gender diversity.

Through engagement and voting, Fidelity aims to improve the governance and sustainability behaviours of its investee companies. The new policy will see Fidelity increasingly hold investee companies to account, utilising its right to vote against boards that do not meet expectations.

“At Fidelity, we believe that exercising our ownership rights by voting at company meetings is a fundamental responsibility for shareholders,” said Jenn-Hui Tan, global head of stewardship and sustainable investing, Fidelity International. “Through the use of engagement and voting, we aim to improve the governance and sustainability behaviours of our investee companies.”

The Sustainable Voting Principles and Guidelines cover 12 topics focusing on key environmental, social and governance (ESG) areas detailing summary voting principles and Fidelity International’s expectations for its investee companies.

Tackling Climate Change

Fidelity International recognises that climate change poses one of, if not the most, significant risks to the long-term profitability and sustainability of companies. To limit global warming to not more than 1.5 °C above pre-industrial levels, the global economy will need to go through a radical transformation, affecting most areas of human activity.

Fidelity expects investee companies to:

  • Take action to manage climate change impacts and reduce their greenhouse gas (GHG) emissions,
  • Make specific and appropriate disclosures around emissions, targets, risk management and oversight.

From 2022, where companies fall short of its minimum expectations, Fidelity will vote against company management.

“Our message to investee companies is clear; the climate crisis must not and cannot be ignored,” Jenn-Hui Tan comments. “It impacts the very nature of major industries in which we invest, and as such must be high on the agenda of all companies. At Fidelity, we’re working collaboratively with peers in the Net Zero Asset Managers initiative, supporting and the transition towards global net zero emissions.

“We expect investee companies to do the same and have policies in place to reduce carbon and other greenhouse gas emissions. This includes setting and reporting on ambitious targets aligned to the UN’s Paris Agreement on climate change including an approach to Net Zero.”

Gender Diversity on Boards

While progress has been made in some markets in recent years, new research in the UK has revealed that more needs to be done to build a balanced, fair and representative corporate sector. The new report –The Hidden Truth About Diversity and Inclusion in the FTSE All-Share1from Women on Boards, exposed that more than half of all companies listed in the FTSE All-Share ex350 have all-male executive leadership teams.

Fidelity will actively engage and consider voting against company management in most developed markets that do not have at least 30 per cent female representation on the board of directors. In markets where standards on diversity are still developing, an initial 15 per cent threshold is targeted.

Paras Anand, CIO, Asia Pacific, Fidelity International, comments: “An increasing body of research has shown that organisations that promote diversity are more productive and better performing. We know from our own company that a diverse and inclusive workplace brings benefits for our customers, our business and our people. At Fidelity, we are committed to actively engaging with our investee companies in the UK and globally; driving them towards more ambitious gender diversity goals, and ensuing we are holding them to account where our expectations are not met.”

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