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Fidelity International

PRI reporting framework 2020

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You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income » Implementation processes

Implementation processes

FI 01. Incorporation strategies applied

Indicate (1) Which ESG incorporation strategy and/or combination of strategies you apply to your actively managed fixed income investments; and (2) The proportion (+/- 5%) of your total actively managed fixed income investments each strategy applies to.
SSA
0 Screening alone
0 Thematic alone
99 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
1 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (financial)
0 Screening alone
0 Thematic alone
99 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
1 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (non-financial)
0 Screening alone
0 Thematic alone
99 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
1 All three strategies combined
0 No incorporation strategies applied
100%
Securitised
0 Screening alone
0 Thematic alone
99 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
1 All three strategies combined
0 No incorporation strategies applied
100%

01.2. Describe your reasons for choosing a particular ESG incorporation strategy and how combinations of strategies are used.

We are an active manager and believe a diversified approach to managing risk in portfolios is the best way to generate superior risk-adjusted performance. This philosophy is based on the belief that fixed income markets are semi-efficient and that through rigorous research, investment opportunities can be identified. The investment process is team-based, combining the strengths and skills of separate disciplines including portfolio management, credit research, quantitative research (including ESG aspects) and trading. This process is designed to ensure that the best investment ideas are identified and incorporated efficiently within client portfolios. ESG integration naturally fits into this approach.

We focus our credit investments in optimal portfolios of high conviction bonds issued by companies where fundamental credit worthiness is not represented by current credit spreads. The strength of our fundamental view is affected for those companies whose businesses are influenced by ESG factors, which will in turn affect the decision to own the bonds.

01.3. Additional information [Optional].


FI 02. ESG issues and issuer research (Private)


FI 03. Processes to ensure analysis is robust

03.1. Indicate how you ensure that your ESG research process is robust:

specify description

          Sustainable Investing Analysts are responsible for periodically reviewing quality of ESG research providers and changing if considered necessary to ensure the highest quality research
        

03.2. Describe how your ESG information or analysis is shared among your investment team.

          Quarterly ESG Analyst Reports; ESG Fund Reviews, Controversy alerts, Carbon Footprint Analysis, ESG Research reports at Issuer and Sector level, Proxy voting research
        

03.3. Additional information. [Optional]

Our global Sustainable Investing team provides our PMs with a breakdown of their portfolio according to external ESG ratings. This analysis grounds the discussion our ESG specialists have with the PMs on high risk ESG factors in their portfolios. We provide a similar report to our analysts based on their coverage, this feeds into their investment analysis.

Our global Sustainable Investing team publish "Controversy Alerts" on our Research Management System. These reports include information on companies within our coverage who have been involved in a high risk controversy.

Analysts and PMs can now access external ESG data directly on our internal Research Platform, Insight. This include proxy voting research by ISS, ESG research by MSCI and Carbon Data from Trucost.

Additionally, Insight is also the platform where we have built an app for the analysts to complete the Proprietary Sustainability ratings of their coverage companies and for the whole investment team (including Sustainable Investing Analysts and PMs) to upload company level engagement information.

ESG Information (ratings and carbon footprint) has also been including within the QFRs (Quarterly Fund Review), which is a quarterly meeting the Fund Manager holds with the CIO to discuss the fund’s financial and ESG performance.


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