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Commitment to responsible investing

We believe that by investing in companies which operate with high standards of corporate responsibility we can protect and enhance investment returns for our clients.

Through our rigorous bottom-up research process we gain an in-depth understanding of ESG issues at a company level before they escalate and potentially threaten the value of our clients’ investments. 

A+ rated by UNPRI

We have been a signatory to the UN Principles for Responsible Investment (UNPRI) since 2012. 

We are proud of our ratings - in 2017 we scored A+ in Strategy & Governance and for our fixed income strategies and maintained our A rating for both equities strategies.

Source: UN Principles for Responsible Investment - ‘Overall Strategy &Governance 2017’

 

Module 2017 Fidelity score 2017 Median 2016 Fidelity Score 2016 Median
Strategy & Governance A+ A A B
Listed Equity - Incorporation A A A A
Listed Equity - Active Ownership A B A B
Fixed Income - Corporate Non-Financial A+ B A+ C
Fixed Income - SSA A+ B A+ C
Fixed Income - Corporate Financial A+ B A+ C
Fixed Income - Securitised A+ E +A E

Source: UNPRI (UN Principles for Responsible Investment).

 

650+ companies actively engaged in 2016

In 2016, we engaged with more than 650 companies on issues such as governance and remuneration, board composition, capital structure and environment and social issues.

As significant investors in many companies, we believe it is our duty to encourage companies to act in the best interest of shareholders and our environment - for better investment outcomes for our clients.  We have engaged with companies on issues such as:

  • Bribery and corruption
  • Lack of board integrity and competence
  • Misaligned remuneration
  • Shareholder rights
  • Data breaches/cyber security
  • Corporate failings
  • Climate change/risk

 

Voted at 3,700+ shareholder meetings

ESG process

In 2016 we voted at more than 3,700 shareholder meetings, voting against management in nearly a third of cases to protect the rights of investors. For further information on Proxy Voting Disclosure for Australian Listed Companies, please refer to www.fidelity.com.au/funds/proxy-voting/.

 

Voting record 1 April 2017 - 30 June 2017*

In three months to 30 June 2017, Fidelity International gave instructions to vote as follows:

Region Votes with management Votes against management** Abstain** Blocked Took no action*** Total
Americas 266 188 14 0 2 270
Asia 655 21 5 0 4 685
Europe 160 247 3 4 2 416
Japan 172 125 0 0 0 297
MEA 10 3 4 0 0 17
Australia 36 4 5 0 0 45
UK 176 63 2 0 1 242
Total 1475 651 33 4 9 2172

 

Voting record 1 July 2016 to 30 June 2017*

In the 12 months to 30 June 2017, Fidelity International gave instructions to vote as follows: 

Region Votes with management Votes against management** Abstain** Blocked Took no action** Total

Americas

366

225

20

0

3

614

Asia

1223

65

7

0

10

1305

Europe

281

303

8

15

67

674

Japan

228

180

0

0

0

408

MEA

32

12

8

0

0

52

Australia

158

49

15

0

1

223

UK

315

138

4

0

5

462

Total

2603

972

62

15

86

3738

This information is distinct from the voting record disclosed by Fidelity Management & Research Co.
* Excludes funds locally registered in France, Hong Kong, Japan, South Korea and Taiwan.
** ‘Against Mgmt’ and ‘Abstain’ meetings are where Fidelity voted against management or abstained in respect of one or more resolutions.
*** ‘Took No Action’ meetings relate principally to the General Meetings of Fidelity Funds.

For more information on how the Australian registered managed investment schemes voted on each resolution in relation to Australian listed entities in the 12 months to 30 June 2017, please refer to our Proxy Voting  page.

 

Summary of votes cast 

The chart below shows a summary of votes cast by Fidelity between 1st July 2016 and 30th June 2017.

Summary of meetings by region

The chart below shows a summary of votes cast by Fidelity between 1st July 2016 and 30th June 2017.

Summary of votes per month

The chart below shows a breakdown of the number of votes per month between 1st July 2016 and 30th June 2017

ESG is part of our investment process

There are four important inputs into how we analyse ESG for each company that we research - our analysts, our specialist ESG team, external research and our portfolio managers who actively consider ESG in their investment decisions.

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An evolution of ESG at Fidelity

We are continually striving for enhanced ESG integration into our investment process*.  

In 2016

We included controversy data such as environmental disasters, product safety recalls and bribery scandals in our ESG rating methodology.

Our analysts continued their extensive research on climate change and electric vehicles and their impact on industry and the environment.  

We launched a new feature on our research management database to more systematically track ESG engagement and analysis.  

We developed a diagnostic tool to identify the key drivers behind the MorningStar sustainability ratings and used this for portfolio analysis on ESG matters.


*For further information on Fidelity’s approach to ESG for Fidelity’s managed investment schemes issued by FIL Responsible Entity (Australia) Limited, please refer to the relevant Product Disclosure Statements (“PDS”) and the accompanying Additional Information ("AI")
 

 

Contributing to global standards

We participate in the debate over the development of appropriate standards for responsible investment through our membership in these forums:

  • International Corporate Governance Network 
  • Asian Corporate Governance Association 
  • Asia Securities Industry and Financial Markets
  • Hong Kong Investment Funds Association 
  • The Association of British Insurers the Corporate Governance Forum, Investment Association and UK Sustainable Investment and Finance Association in the UK
  • The Dutch Association of Investors for Sustainable Development 

In addition, we are signatories to the UK Stewardship Code and the Japanese Stewardship Code. 

 

Want to know more?  

 

FAQs

The UNPRI defines responsible investment as an approach that aims to incorporate environmental, social and governance (ESG) factors into investment decisions, to better manage risk and generate sustainable, long-term returns.  At Fidelity, responsible investment is an integral part of our investment process.

ESG stands for Environment, Social and Governance. Analysing ESG factors can be a key way to assess the sustainability and social impact of an investment in a company or a business. Examples of ESG issues include energy consumption and greenhouse gas emissions, supply-chain risk management, gender diversity, employee productivity, independent board leadership and CEO compensation.

The 2016 Governance and Engagement Report details the activities of our specialist Environmental, Social and Governance team over the year.  Click here to view this report.

The UNPRI works with its international network of signatories to put six Principles for Responsible Investment into practice. Its goals are to understand the investment implications of environmental, social and governance issues and to support signatories in integrating these issues into investment and ownership decisions.

The six Principles were developed by investors and are supported by the UN. They have more than 1,400 signatories from over 50 countries representing US$59 trillion of assets.

In 2016, Fidelity's score in Strategy and Governance increased to A+ and we maintained our A ratings on all equity modules, and scored A+ for our fixed income modules.

  1. We will incorporate ESG issues into investment analysis and decision-making processes.
  2. We will be active owners and incorporate ESG issues into our ownership practices.
  3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.
  4. We will promote acceptance and implementation of the principles within the investment industry.
  5. We will work together to enhance our effectiveness in implementing the principles.
  6. We will each report on our activities and progress towards implementing the principles.

Active ownership is about using our voting rights and our influence as an investor to improve the long-term value of a company.  As stewards of our clients’ money we believe we have an important role to play in improving the governance of the companies in which we invest – helping companies become better companies. We engage directly with companies to encourage good governance and sustainable corporate practices.

You can find more detailed information in our Responsible Investment Policy. 

Members of Fidelity’s ESG team are involved in a wide number of external and collaborative governance-related bodies globally.

These include the Chairmanship of the Investment Association’s Governance and Engagement Committee, representation on the Code Committee of the Panel on Takeovers and Mergers, the Companies Committee of the Confederation of British Industry and the International Corporate Governance Network’s remuneration committee. Fidelity is a signatory to the United Nations Principles for Responsible Investment, the UK Stewardship Code, the Japanese Stewardship Code, the Hong Kong Securities and Futures Commission Principles of Responsible Ownership and the Taiwan Stock Exchange’s Stewardship Principles for Institutional Investors. We are also active members of the Asian Corporate Governance Association, the Association of British Insurers, the Corporate Governance Forum, Assogestioni, the UK Sustainable Investment and Finance Association, the Investor Forums in both Japan and the UK, the European Fund and Asset Management Association Responsible Investment and Corporate Governance Working Groups and many other trade and industry bodies around the world.

Consideration of Environmental, Social and Governance (ESG) issues is an integral part of our investment decision-making process for all Fidelity funds.

ESG analysis is carried out at analyst level within the equity, fixed income, real estate and multi-asset teams and our portfolio managers are also active in analysing the potential effects of these factors when making investment decisions.

Our specialist ESG team, who sit within our global investment team, ensures Fidelity continues to be at the forefront of developing ESG trends and issues emerging globally.

Fidelity’s internal analysis is complemented by extensive external research and ratings analysis.

*For further information on Fidelity’s approach to ESG for Fidelity’s managed investment schemes issued by FIL Responsible Entity (Australia) Limited, please refer to the relevant Product Disclosure Statements (“PDS”) and the accompanying Additional Information ("AI")

Fidelity has a Cluster Munitions and Anti-personnel Landmines (CM & APL) Exclusion List based on guidance from international conventions and supranational bodies.  The CM & APL Exclusion list has been formulated using a third party ESG screening product with input from our internal research team. It includes those issuers who actually use, stockpile, manufacture and/or produce Cluster Munitions and Anti-Personnel Mines.

The Exclusion List currently includes 18 publicly listed companies and 18 private companies within eligible investment jurisdictions.

Climate change and carbon emissions exposure is consistently monitored across our funds and we incorporate these factors into our investment analysis across sectors where it is material. From our research process, we often and consistently engage with companies on their exposure to carbon and their strategy to deal with climate change.

We can tailor portfolios for our institutional clients to reflect specific ESG themes or restrictions and we welcome the opportunity to discuss your particular requirements. 


1 Average ESG score is defined as the weighted average MSCI Final Industry Adjusted Score of fund holdings. ©2017 MSCI ESG Research LLC Reproduced by permission.

2 Weighted Average Carbon Intensity is defined as the weighted average of the amount of Scope 1 and Scope 2 CO2 emissions per $1million of sales of fund holdings.

Important Information:
Prior to making an investment decision, retail investors should seek advice from their financial adviser. This material has been prepared without taking into account your objectives, financial situation or needs. You should consider these matters before acting on the information. You should also consider the relevant Product Disclosure Statements (“PDS”) for any Fidelity Australia product mentioned in this document before making any decision about whether to acquire the product. The PDS can be obtained by contacting Fidelity Australia on 1800 119 270 or by downloading it from our website at www.fidelity.com.au. This document may include general commentary on market activity, sector trends or other broad-based economic or political conditions that should not be taken as investment advice. Information stated herein about specific securities is subject to change. Any reference to specific securities should not be taken as a recommendation to buy, sell or hold these securities. While the information contained in this document has been prepared with reasonable care, no responsibility or liability is accepted for any errors or omissions or misstatements however caused. This document is intended as general information only.

This website is intended to provide general information only and has been prepared without taking into account your objectives, financial situation or needs. You should consider these matters before acting on the information and consider the relevant Product Disclosure Statement for any product named on this website before making an investment decision.

© 2017 FIL Responsible Entity (Australia) Limited ABN 33 148 059 009, AFSL No. 409340.
Fidelity, Fidelity International and the Fidelity International logo and F symbol are trademarks of FIL limited.

This document is issued by FIL Responsible Entity (Australia) Limited ABN 33 148 059 009, AFSL No. 409340 ("Fidelity Australia"). Fidelity Australia is a member of the FIL Limited group of companies commonly known as Fidelity International. Prior to making an investment decision retail investors should seek advice from their financial adviser. Please remember past performance is not a guide to the future. Investors should also obtain and consider the Product Disclosure Statements ("PDS") for the fund mentioned in this document. The PDS is available on www.fidelity.com.au or can be obtained by contacting Fidelity Australia on 1800 119 270. This document has been prepared without taking into account your objectives, financial situation or needs. You should consider such matters before acting on the information contained in this document. This document may include general commentary on market activity, industry or sector trends or other broad based economic or political conditions which should not be construed as investment advice. Information stated herein about specific securities is subject to change. Any reference to specific securities should not be construed as a recommendation to buy, sell or hold these securities. While the information contained in this document has been prepared with reasonable care no responsibility or liability is accepted for any errors or omissions or misstatements however caused. The document may not be reproduced or transmitted without prior written permission of Fidelity Australia. The issuer of Fidelity funds is FIL Responsible Entity (Australia) Limited ABN 33 148 059 009. References to ($) are in Australian dollars unless stated otherwise. © 2017 FIL Responsible Entity (Australia) Limited. Fidelity, Fidelity International, and the Fidelity International logo and F symbol are trademarks of FIL Limited.