Fidelity International unveiled today new engagement and voting policies on climate change and gender diversity as part of its Sustainable Investing Voting Principles and Guidelines. The policies will see the company advocate for specific board diversity targets at investee companies, and hold companies to account for failing to address climate change crisis.
Jenn-Hui Tan, Global Head of Stewardship and Sustainable Investing, Fidelity International, said:
“At Fidelity, we believe that exercising our ownership rights by voting at company meetings is a fundamental responsibility for shareholders. Through the use of engagement and voting, we aim to improve the governance and sustainability behaviours of our investee companies.”
Addressing climate, Fidelity’s voting policy is designed to support the implementation of the Paris Agreement and limit global warming to well below 2°C, and sets out expectations for companies to manage climate change impacts and reduce greenhouse gas emissions, as well as advocating for disclosures from companies around emissions, targets, risk management and oversight.
Key gender diversity actions under the new policy include engaging and potentially voting against companies that don’t meet the firm’s expectations for at least 30% female board representation in most developed countries, and 15% in other markets.
Fidelity stated that from 2022, where companies fall short of its minimum expectations, it will vote against company management.
The announcement comes as major investors are increasingly focusing on ESG issues through their stewardship activities. In its 2021 Voting Spotlight released last week, investment giant BlackRock indicated an increase in engagement with portfolio companies on topics such as climate and natural capital, and an uptick in votes against management, and earlier this year, State Street Global Advisors (SSGA) informed investee companies that its stewardship priorities for this year will focus on the systemic risks associated with climate change and a lack of racial and ethnic diversity.
Jenn-Hui Tan added:
“Our message to investee companies is clear; the climate crisis must not and cannot be ignored. It impacts the very nature of major industries in which we invest, and as such must be high on the agenda of all companies. At Fidelity, we’re working collaboratively with peers in the Net Zero Asset Managers initiative, supporting and the transition towards global net zero emissions.”
Click here to see Fidelity International’s Sustainable Investing Voting Principles and Guidelines.