This report shows public data only. Is this your organisation? If so, login here to view your full report.

Fidelity International

PRI reporting framework 2020

Export Public Responses
Pdf-img

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

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

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

          CM & LM Exclusion
        

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

Fidelity International believes that high environmental, social and governance standards will generally make good business sense and have the potential to protect and enhance investment returns. Fidelity is dedicated to achieving the best possible risk-adjusted returns for our investors and we believe that responsible investment is essential in maximising returns to our clients. We strive to gain an in-depth understanding of the relevant ESG issues applicable to our investments through our internal research process and we seek to identify these issues before they escalate into events that could threaten the value of our investment.

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

Fidelity International believes that high standards of responsible investing will generally make good business sense and have the potential to protect and enhance investment returns.

Fidelity's approach to responsible investment is consistent with the UN supported PRI Principles and is consistent with our view that ESG integration should be encouraged when it enhances long term financial return.

We encourage integration of ESG issues into our investment decision-making process when it has a material impact on the investment or it has the potential to affect the long-term value of the investment. Our ESG integrated approach is relevant across all the asset classes, sectors and markets in which we invest. We also provide our clients with the option to screen out companies based on ESG themes (on segregated mandates only).

Our Responsible Investment Policy covers all our asset classes lobally and is reviewed annually to ensure it captures all up-to-date elements of our Sustainable Investing strategy. The policy is approved by the ESG Oversight Group (ESGOG) and is avaialble on our website.

01.6. Additional information [Optional].

          
        

SG 01 CC. Climate risk (Private)


SG 02. Publicly available RI policy or guidance documents

 

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

Other, specify (1) description

          CM & LM Exclusion
        

URL/Attachment

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Additional information [Optional].

We also provide our clients with an annual Sustainable Investing Report which details the activities we have partaken in with respect to our investee companies as well as our wider stance on stewardship and ESG-related issues. This report is also published on our website (https://www.fidelityinstitutional.com/en/responsible-investing/).

In addition, we have an exclusion list for Exclusion List on Cluster Munitions and Anti-Personnel Landmines.

Upon client request, we also publish carbon footprint and ESG rating data of our portfolios for our clients.


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

Fidelity has a documented policy for the management of conflicts of interest in its UK business which is approved annually by the Conflicts Oversight Forum.  The policy addresses the obligations of Fidelity and its subsidiaries carrying on regulated business to maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of its clients. It applies to perceived as well as actual conflicts.

Conflicts are identified through various means, including regular interviews with the business heads, awareness training and internal reviews.  There is a governance structure in place to ensure the effective implementation of the Conflicts of Interest Policy and the Conflicts Oversight Forum meets on a quarterly basis to review any issues involving material conflicts occurring the previous quarter.

All staff must adhere to the Conflicts of Interest Policy and they are made aware that clients’ interests must always come before those of Fidelity or its staff.

Examples where 'CoI' could arise - Investing, Trade Allocation, Voting (we won't vote at annual shareholder meetings for Fidelity funds/investment trusts unless specially instructed by a client).

https://www.fidelity.co.uk/static/pdf/common/conflicts-policy.pdf

03.3. Additional information. [Optional]

Where it is a fiduciary, Fidelity owes a duty to its clients never to put itself in a position where its own interest results in an irreconcilable conflict with its duty to its clients or where its duty to one client results in an irreconcilable conflict with its duty to another client or clients. Fidelity is also under a regulatory duty to manage conflicts of interest fairly, both between itself and its clients and between different clients. To that end, Fidelity will identify, record, manage and, where required, disclose actual or potential conflicts of interests and have in place a policy relating to conflicts of interest.

A Conflicts Register is maintained to ensure that significant conflicts have been identified, addressed and recorded. All staff must adhere to the Conflicts of Interest Policy and the Code of Conduct and Associated Policies and they are made aware that clients' interests must always come before those of Fidelity or its staff.

Situations where conflicts of interest could arise in the context of stewardship include the following examples:-

Investing

Within Fidelity there are companies which invest as principal for investment purposes in equities and/or bonds in which Fidelity may also invest for our clients. Potential conflicts can occur during acquisition and disposal of securities, voting and the use of research. To manage these potential conflicts, decisions regarding Fidelity's investment portfolio are made independently of the investment management process which supports our clients' funds and accounts. Policies and procedures are in place to ensure that these principles are properly followed. It is also possible that a Fidelity fund or account will own securities issued by a client, but in all situations Fidelity's investment decisions will be guided by what we regard as the best interests of the relevant fund or account.

Trade Allocation

When performing client transactions in securities, Fidelity will combine orders where this it is in the best interests of the clients as a whole. If there is insufficient liquidity resulting in a partial completion of the order then the securities will be allocated across all clients participating in the block and it is possible that one client may receive a more favourable allocation over another client. To manage this potential conflict, Fidelity maintains a Trading Desk Policy which ensures the consistent and fair application of trade allocations. Allocations are performed on a pro-rata basis based on the size of the order, and the system allocation algorithm is automatically applied for every trade, subject to three lines of oversight - the Trading Desk supervisor, Compliance and Internal Audit/Risk.

Voting

In instances where a fund holds an investment in more than one party to a transaction we will always act in the interests of the specific fund in question and in instances where there is a conflict with Fidelity's own interests, we will either vote in accordance with the recommendation of our principal third party research provider or if no recommendation is available we will abstain or not vote at all. We will not vote at shareholder meetings of any Fidelity funds unless specially instructed by a client. The Head of Corporate Finance is responsible for monitoring possible conflicts of interest with respect to proxy voting.

 


SG 04. Identifying incidents occurring within portfolios (Private)


Top