Fidelity International has announced a revised sustainable investing framework, in order to meet client requirements and ESG regulations.

In the revised framework, Fidelity has created three categories:

1. ESG Unconstrained: This category includes products that aim to generate financial returns and may, or may not, integrate ESG risks and opportunities into the investment process. Products in this category adopt Fidelity’s firmwide approach to exclusions.

2. ESG Tilt: This category includes products that aim to generate financial returns and promote environmental and social characteristics through a tilt towards issuers with stronger ESG performance than the product’s benchmark or investment universe. Products in this category adopt the ESG Unconstrained exclusions and further exclusions apply such as tobacco production, thermal coal mining, thermal coal power generation and certain sovereign issuer exclusions.

3. ESG Target: This category includes products that aim to generate financial returns and have ESG or sustainability as a key investment focus or objective, such as investing in ESG leaders (issuers with higher ESG ratings), sustainable investments, a sustainable theme (such as climate or transition investment) or meeting impact investing standards. Products in this category are subject to the enhanced exclusions mentioned above and further exclusions may apply.

Jenn-Hui Tan, Chief Sustainability Officer at Fidelity International said, “We have long been committed to sustainable investing and have continued to evolve our approach and capabilities in line with client requirements and ESG regulations. The integration of sustainability into investment research and portfolio construction is part of our fundamental process to identify the drivers of long-term value creation.

“Our revised framework aims to facilitate the creation and maintenance of a consistent, transparent, and practical range of investment capabilities that meet evolving client and regulatory needs. We believe this framework balances a robust approach to sustainability with a flexible approach that can accommodate different investment styles, asset classes and client preferences.”

END