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Fidelity International

PRI reporting framework 2020

Export Public Responses

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LEA 02. Reasoning for interaction on ESG issues

Indicate the method of engagement, giving reasons for the interaction.

Type of engagement

Reason for interaction

Individual / Internal staff engagements
Collaborative engagements
Service provider engagements

02.4. Additional information. [Optional]

Although our portfolio managers and analysts meet the companies in which they invest on an ongoing basis, members of our Sustainable Investing team also engage with our investee companies regularly on ESG topics.

Fidelity is an active member of the UK Investor Forum and we maintain close links with other investors through organisations such as the Investor Association, the Corporate Governance Forum and numerous investor gatherings and conferences. There are collective meetings and calls with other investors several times a month at which company specific and wider governance issues are regularly discussed.

In 2019 we participated in new collaborative engagements with our peers on aspects of climate change.  We collaborated with multiple institutional investors through a Singaporean-based ESG consultancy, with the aim of encouraging all major Singaporean banks to forego short-term opportunities in coal and to improve their climate change strategies.  We also joined Climate Action 100+ and are now leading or joining these engagements across Asia and Europe.

LEA 03. Process for identifying and prioritising engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

03.1. Indicate whether your organisation has a formal process for identifying and prioritising engagements.

Indicate the criteria used to identify and prioritise engagements for each type of engagement.
Type of engagement
Criteria used to identify/prioritise engagements
Individual / Internal staff engagements

Individual / Internal staff engagements

Collaborative engagements

Collaborative engagements

03.3. Additional information. [Optional]

In relation to collaborative engagements, we will prioritise these types of engagements where we believe that working with our peers will bring about more leverage to change corporate behaviour on in cases where individual engagements are not bringing about the change/improvements that we have requested.   

LEA 04. Objectives for engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.
Indicate whether you define specific objectives for your organisation’s engagement activities.
Individual / Internal staff engagements
Collaborative engagements

04.2. Additional information. [Optional]

For all our thematic and company specific engagements, we identify objectives and milestones together with the investment analyst and continually monitor the engagements as they progress to meeting these objectives. The objectives will link to the end goal of the engagement and what we are hoping to achieve, for example, increased disclosure or more systematic processes introduced.  The milestones are the steps we intend to take to reach our end goal, for example, engagement with subject matter experts in the company or commitment to review disclosure.

In relation to collaborative engagements, the objectives are formulated at the initial stages of these engagements with input from each participating member and are reviewed as necessary throughout the engagement.  We continually check in with all collaborating participants to provide updates on steps taken to reach the objectives and milestones met.  These update meetings are also useful to ensure consistency in our objectives and to learn from each other’s experiences.

LEA 05. Process for identifying and prioritising collaborative engagement

Indicate whether you monitor and/or review engagement outcomes.
Individual / Internal staff engagements
Collaborative engagements
Indicate whether you do any of the following to monitor and/or review the progress of engagement activities.
Individual / Internal staff engagements
Collaborative engagements

05.3. Additional information. [Optional]

Fidelity has several measures in place to continually assess the materiality and feasibility of its engagements. Fidelity continuously tracks the investment thesis of its investee companies which forms part of its investment decisions. In addition, through regular dialogue between analysts, portfolio managers and the Sustainable Investing team, a collective examination and dialogue takes places to monitor and measure what steps companies have put in place to achieve remedial action and assess where progress has not been made. Fidelity looks closely at a company's financial results alongside its ability to address critical ESG issues, as part of an investors strategy for considering ESG issues.

In 2019, we started to build an engagement section in Insight, our Research Management System,  (accessible by the full investment team) which will systematically record each engagement and the steps we have taken to reach the objectives and milestones identified for each engagement.

In relation to our thematic engagements, we work with the investment team to create the objectives and milestones of each thematic engagement and we then monitor our progress on these milestones periodically. We update the investment team regularly on the steps we have taken to reach our milestones.

In relation to the collaborative engagements we are involved in, the objectives are identified at the beginning the initiatives and will be revised as required as we progress through the engagements.  For example, the initiative we worked on regarding Singapore banks and their coal policies, we started with an objective of tightening their coal policies and since we achieved this objective, we are continuing with our engagements moving the objective to increased disclosure on transition planning. 

LEA 06. Role in engagement process

06.1. Indicate whether your organisation has an escalation strategy when engagements are unsuccessful.

06.2. Indicate the escalation strategies used at your organisation following unsuccessful engagements.

06.3. Additional information. [Optional]

As a general policy we aim to support the management of the companies in which we invest but our dialogue with companies is a robust one and we will form our own views on the strategy and governance of a business. On occasion our views may differ from those of management or the Board and this may give rise to an escalation in our engagement. Factors taken into account prior to an escalation include an assessment of the materiality of the matter in dispute, the size of our shareholding, the timeframe of the investment thesis and the ownership profile of the business in question. Escalation can also occur when we become aware of differences between directors. Our specific response will always be determined on a case by case basis and there will be instances when we choose to sell our shares.

When escalation is deemed appropriate our first step is often to make contact with other significant shareholders to determine whether they share our views or concerns. Following these conversations we will speak to the company’s advisers and/or independent directors for a further exchange of views. Our strong preference is to achieve our objectives in a consensual and confidential manner but when differences with a company remain we may consider joint engagement with other shareholders, escalating concerns if necessary to regulators and more public forms of dissent, although as a general policy we do not favour using the media to help achieve our objectives. If differences with a company remain unresolved we may vote against the Board in a general meeting or even requisition an extraordinary general meeting to enable all investors to vote on the matter in dispute. We would not normally intervene on an operational matter but topics which have given rise to escalation in the past include the need for management and/or Board change, strategy, capital structure, M&A, protection of shareholder rights, remuneration and other ESG-related issues.

LEA 07. Share insights from engagements with internal/external managers (Private)

LEA 08. Tracking number of engagements

08.1. Indicate whether you track the number of your engagement activities.

Type of engagement
Tracking engagements
Individual/Internal staff engagements​

Collaborative engagements

08.2. Additional information. [Optional]

The Sustainable Investing team tracks the engagements they are involved in systematically through a shared team report. We breakdown the tracked engagements into various categories including engagement theme, objectives of engagement, status, mode, milestones and who we engaged with. These details are collated every year to monitor our progress and reflect on specific themes covered. 

We also use the data from our engagement tracking for client engagement and reporting.

Our fundamental analysts and portfolio managers systematically track their engagements with companies, and they are now expected to confirm whether they have engaged on a specific ESG matter at their mainstream meetings through our Sustainability Ratings.

We are expanding the use of our internal research management system to create a more efficient way of logging our ESG engagements for both the fundamental analysts and ESG analysts and this data will be directly available and visible to the full investment team.