Climate change, tackling deforestation and fair, transparent remuneration are top of Fidelity International’s key voting considerations ahead of Europe’s AGM season.
These complement Fidelity’s four systemic themes; nature loss, climate change, strong and effective governance and social disparities.
Climate change
In line with Fidelity’s ambition to achieve net zero across its investment portfolios by 2050, including halving its portfolio carbon footprint by 2030, and to phase out investment in thermal coal by 2030 in OECD countries, Fidelity is reinforcing its approach to addressing climate change.
The asset manager said it will vote against directors at companies that fail to meet its minimum expectations on climate change governance, policies and disclosures. Climate transition plans and climate shareholder proposals will remain in the spotlight and Fidelity will use its vote to push for companies to adopt decarbonisation strategies that support a credible just transition to net zero.
Deforestation
A Finance for Biodiversity pledge signatory and founder member, Fidelity is committed to protecting and restoring nature through its financing activities and investments. It plans to vote against companies in high-risk sectors that do not meet its minimum standards of deforestation-related practices and disclosure.
Remuneration
A key focus for Fidelity during 2023 was the alignment between executive pay and the wider workforce. As global inflationary pressures ease and the cost of living falls, Fidelity said companies may de-prioritise internal pay equity in the face of questions surrounding competitiveness.
Fidelity said it will continue to support fair, transparent remuneration structures that incentivise senior managers to deliver on company strategy, while aligning with shareholders’ interests.
Emilie Goodall, head of stewardship, Europe, at Fidelity International, said: “As a research-led asset manager, we believe that active ownership is a positive force for driving sustainable business practices. Voting is a powerful tool for change and as the AGM season begins in Europe, it is important for us to reiterate our voting intentions on the matters that we think are pivotal to address for the year ahead.”
Goodall said the industry must work together to move towards tracking engagement outcomes and measuring progress made beyond the vote against clear and consistently communicated shareholder expectations.
“As part of this, we have been trialling an enhanced engagement tracking approach, to better capture and monitor our ongoing engagement activity at the underlying company level, particularly in relation to our thematic engagements,” Goodall added.
“This approach incorporates a wide range of engagement tools to push for real change, for example, alongside continuous behind-the-scenes engagement with all companies we invest in, we also engage with policymakers and other collaborative engagements in a bid to influence positive system-wide change.”
