In this article:
We face a climate emergency that demands collective action. But persuading an entire world to come together to change ingrained economic and social habits is hard. That was apparent at a global scale in the response to the Covid-19 pandemic. And we witness it at a micro level in our active engagements with companies on sustainability issues.
There is hope, however. The net zero ambitions of the world’s two largest economies - the US and China - have surpassed the expectations of many in the past 12 months, and there is real momentum as we approach the UN’s postponed COP26.
Many countries and companies around the world are already on a pathway to a lower carbon world and central banks globally are considering their role too. The question is whether we can get there quickly enough, and mitigate social disruption along the way. Protecting human rights and reskilling labour forces in legacy industries will be crucial, and carbon pricing of some kind is likely to be necessary.
As stewards of our clients’ capital Fidelity International’s role is to ensure that our capital allocation decisions reflect this transition to a more sustainable future. To achieve this, we continue to build on our sustainable investment and research capabilities, engage extensively with heavy emitters and companies that need to protect biodiversity to encourage them to make faster progress, and advocate for global standards.
We cannot do it alone, but in collaboration with others, we can make a real difference. Our work with other investors through the Climate Action 100+ programme has demonstrated the power of group engagements, and our participation in alliances such as the Net Zero Asset Managers Initiative and the Sustainable Markets Initiative will be key to driving global change.
We consistently raise other important issues with companies including diversity, employee welfare and digital ethics - all of which have profound social and economic consequences. And we have scaled up sustainability ambitions for our own operations in relation to cutting carbon emissions, promoting diversity and inclusion across the business, and supporting our local communities.
I hope you find this report of our sustainable investing and engagement activities useful and welcome your feedback on how we can go further, faster on the journey towards net zero.
CEO, Fidelity International