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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 » (C) Implementation: Integration of ESG factors

(C) Implementation: Integration of ESG factors

LEI 08. Review ESG issues while researching companies/sectors

08.1. Indicate the proportion of actively managed listed equity portfolios where E, S and G factors are systematically researched as part of your investment analysis.

ESG issues

Proportion impacted by analysis
Environmental

Environmental

Social

Social

Corporate Governance

Corporate Governance

08.2. Additional information. [Optional]

Our investment analyst team provides proprietary sustainability ratings across our investment universe.  The ratings framework divides the investment universe into 99 subsectors, each with industry-specific criteria against which the issuer is assessed relative to its peers, using an A to E rating. The ratings are updated on an annual basis or following a change of policy or an exceptional event at the company. The proprietary ratings have been fully integrated into Fidelity’s investment process and internal research platform and are available to all our investment teams as an additional source of insight and to support investment decisions across Fidelity’s client portfolios.

We receive ESG ratings and company reports from an external vendor which are systematically incorporated into our research management system. The ESG ratings are also included in our analyst company reports. In addition, we provide the investment team with quarterly reports highlighting industry leaders and laggards within our holdings.

Our Sustainable Investing team concentrate on ESG factors in their engagements with investee companies and report this information back to the investment team.

Fidelity maintains a permanent in-house team of governance specialists who work closely with the investment team and who are responsible for conducting our voting activities.


LEI 09. Processes to ensure integration is based on robust analysis

09.1. Indicate which processes your organisation uses to ensure ESG integration is based on robust analysis.

          ESG risk profile of analyst coverage
        

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

09.3. Indicate how frequently third party ESG ratings that inform your ESG integration strategy are updated.

09.4. Indicate how frequently you review internal research that builds your ESG integration strategy.

09.5. Describe how ESG information is held and used by your portfolio managers.

          ESG Fund Reviews
        

09.6. Additional information. [Optional]

We use an external ESG research provider to supplement our analysis for both the equity and fixed income teams globally. These reports are forwarded by the vendor to the company for review by them.

Our Sustainable Investing team is responsible for periodically reviewing the quality of our ESG research provider and changing providers if considered necessary.

Our global Sustainable Investing team also provide our PMs around the world, on request, with a breakdown of their portfolio according to the external ESG ratings. This fund analysis forms part of the discussion members of our ESG team have with the PMs on the highest risk ESG factors in their portfolios. We also provide a similar report to our analysts based on their coverage and this forms part of their overall investment analysis.

ESG ratings and carbon intensity are included in the Quarterly Fund Review (QFR) process.  The QFR is a detailed analysis of each portfolio, conducted by the relevant CIO and attended by the portfolio manager and representatives from the risk, portfolio construction and investment directing teams.  An understanding of each portfolio’s exposure to ESG related issues is a fundamental part of this review.


LEI 10. Aspects of analysis ESG information is integrated into (Private)


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