Fidelity updates sustainable investing framework

3 July 2024

Fidelity International has updated its sustainable investing framing to adapt to the evolving sustainable investing landscape.

To meet changing client needs and environmental, social and governance regulations, Fidelity has created three categories within its framework. The first is ESG Unconstrained, which covers products that aim to generate financial returns and may or may not integrate ESG risks and opportunities into the investment process.

The second is ESG Tilt, which includes products that aim to generate financial returns and promote environmental and social characteristics through a tilt towards issuers with stronger ESG performance than the product’s benchmark or investment universe.

Products in this category also adopt the ESG Unconstrained exclusions and further exclusions apply such as tobacco production, thermal coal mining, thermal coal power generation and certain sovereign issuer exclusions.

Finally, the framework includes ESG Target, which covers products that aim to generate financial returns and have ESG or sustainability as a key investment focus or objective, such as investing in ESG leaders, sustainable investments, a sustainable theme or that meet impact investing standards.

Jenn-Hui Tan, chief sustainability officer at Fidelity International, said: “We have long been committed to sustainable investing and have continued to evolve our approach and capabilities in line with client requirements and ESG regulations. The integration of sustainability into investment research and portfolio construction is part of our fundamental process to identify the drivers of long-term value creation.

“Our revised framework aims to facilitate the creation and maintenance of a consistent, transparent, and practical range of investment capabilities that meet evolving client and regulatory needs. We believe this framework balances a robust approach to sustainability with a flexible approach that can accommodate different investment styles, asset classes and client preferences.”

Professional Paraplanner