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Fidelity International

PRI reporting framework 2020

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You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes » (A) Implementation: Screening

(A) Implementation: Screening

LEI 04. Types of screening applied

04.1. Indicate and describe the type of screening you apply to your internally managed active listed equities.

Type of screening

Screened by

Description

As part of our approach to responsible investment, Fidelity considers the exclusion of companies from our investment universe based on ESG criteria. We place companies which we regard as unsuitable investments on an Exclusion List. When deciding on whether to exclude a company we are guided by international conventions, particularly the Convention on Cluster Munitions, the International Convention on the Prohibition of the use of, stockpiling, production, and transfer of Anti-Personnel Mines, guidance from the United Nations, The World Bank, and other global regulations upholding ESG principles.

All funds managed by Fidelity International are subject to Fidelity International’s firm-wide exclusions list (cluster munitions and anti-personnel landmines). We also have extensive experience in managing institutional client portfolios with specific restrictions/guidelines in place. Some examples of client-requested exclusions that we have implemented include controversial weapon producers, alcohol and tobacco stocks, home country stocks, or stocks in which the investor has an economic interest.

Additionally, Fidelity has a Sustainable Family of Funds (“SF”) which is subject to an additional level of exclusions covering manufacturers of controversial weapons, civilian firearms, and tobacco.

Fidelity's firm-wide Exclusions Policy Framework can be found on our websites and we review the exclusion list on a quarterly basis.

https://www.fidelity.co.uk/assets/pdf/personal-investor/about-fidelity/corporate-governance/exclusion-policy-framework.pdf

Screened by

Description

Funds in Fidelity’s Sustainable Family (“SF”) range - which on the listed equity side are the Sustainable Global Equity Fund, Sustainable Eurozone Equity Fund, and Sustainable Water and Waste Fund -- are required to invest a minimum of 70% of the portfolio in securities that maintain sustainable characteristics which may include, but are not limited to, the securities the investment manager believes to have effective governance and superior management of environmental and social issues. The Sustainable Global Equity Fund and Sustainable Eurozone Equity Fund follow a best-in-class approach, with the aim of selecting companies that are higher ESG performers relative to peers or where we identify an improving outlook (i.e. an expected outperformer).

Screened by

Description

Funds in Fidelity’s Sustainable Family (“SF”) range - which on the listed equity side are the Sustainable Global Equity Fund, Sustainable Eurozone Equity Fund, and Sustainable Water and Waste Fund -- as well as the Fidelity Institutional European Smaller Companies Fund,  are subject to a norms-based screen applying the 10 Principles of the UN Global Compact to ensure that the funds do not invest in companies that are not compliant with these principles.

04.2. Describe how you notify clients and/or beneficiaries when changes are made to your screening criteria.

We notify of changes to the investment process to investors via the relationship managers and also via shareholder letters where required by regulation if there are changes to the prospectus


LEI 05. Processes to ensure screening is based on robust analysis

05.1. Indicate which processes your organisation uses to ensure ESG screening is based on robust analysis.

05.2. Indicate the proportion of your actively managed listed equity portfolio that is subject to comprehensive ESG research as part your ESG screening strategy.

05.3. Indicate how frequently third party ESG ratings are updated for screening purposes.

05.4. Indicate how frequently you review internal research that builds your ESG screens.

05.5. Additional information. [Optional]

We adopt a principles-based approach to ESG matters and as part of this we place companies which we regard as unsuitable investments on an Exclusion List. When deciding on whether to exclude a company we are guided by international conventions particularly the Convention on Cluster Munitions, the International Convention on the Prohibition of the use of, stockpiling, production and transfer of Anti-Personnel Mines, guidance from The United Nations, The World Bank and other global regulations which uphold ESG principles.

The ESG Oversight Group governs the definition and application of this Exclusion Policy and any security specific exclusion lists created as a result thereof, subject to the approval of the Fidelity Board. Our full exclusion list is reviewed quarterly unless a specific event necessitates an out-of-cycle review.

The compliance monitoring team monitors the portfolios with screening criteria systematically through hard coded restrictions in the investment guidelines


LEI 06. Processes to ensure fund criteria are not breached (Private)


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