Автор: Yoktilar
Responsible investing fidelity
Investors also need to act as responsible stewards of their investee companies through regular engagement and diligent voting to ensure companies continue to advance on their sustainability journey. This applies to all markets, including China. But in markets where most companies are just starting out on this journey, such as China, stewardship plays an even more significant role.
This is because most companies well understand the importance and ever-increasing business relevance of their sustainability practices but need guidance or even handholding as they get started. Through engagement, companies can obtain better clarity on investor expectations, learn about the practice and progress of their peers, and become informed about the resources available that can assist their efforts.
Given the general lack of quality disclosure, this is indispensable for investors seeking to assess the sustainability practice of companies in emerging markets. The importance of voting is also true for China. We see voting as a right but also a responsibility.
Diligent voting, where not only every vote is cast, but where each is cast with proper deliberation, serves as a constant reminder for companies that investors are actively engaged and, when needed, will not hesitate to use their votes to drive corporate change.
How we do it? As with ESG analysis, at Fidelity stewardship is embedded in our core investment capabilities, where our sector analysts and portfolio managers conduct ESG engagements with companies and make voting decisions according to our voting policy. Our in-house sustainable investing team the SI team acts as an enabler by providing the domain knowledge and expertise.
Our analysts also meet companies frequently, at least once a quarter. This ensures continuity in our engagement, because, in addition to the dedicated ESG meeting which generally happens once or twice a year, quick discussions to follow-up on previously discussed ESG topics take place during regular management meetings to discuss operations and financials.
Our engagement approach in China is generally the same as in other jurisdictions, but our engagement activities here differ in breadth, frequency and tactics. Given many companies are at the early stages of their sustainability journey and disclosure is still often lacking, we find it necessary to engage with a larger base of companies. These engagements often need to cover a wide range of issues, which makes more frequent engagement helpful.
Carefully crafting suggestions into constructive feedback instead of direct criticism is also important, particularly for the first few meetings. Voting is centrally managed by the SI team, which votes on all routine resolutions according to our voting policy, which has been discussed and agreed to by our investment team. Non-standard resolutions are reviewed and discussed with the relevant analysts and portfolio managers. The fundamental insights from the investment team in evaluating such proposals are extremely important and are generally lacking in proxy research.
Our sector analyst started a dialogue with its management about three years ago to understand its ESG practices. The principles outlined in our report reflect the values, processes, and commitments that we undertake as we manage the assets of our customers.
Knowledge and education Through proprietary ESG data sets and bottom-up analysis, we provide educational resources and tools for our investment teams to assess a company's sustainability profile. ESG product development We are committed to providing our shareholders with the ability to invest consistent with their values, while also seeking to deliver long-term investment value.
Investing through an ESG lens is not new to Fidelity For many years, we have engaged with companies on behalf of Fidelity mutual funds, our fund shareholders, and institutional clients discussing various long-term economic factors, including the impact of certain ESG factors. We believe the best-managed companies work to maintain balance among varied interests and groups, and have transparent and clear policies to engage with stakeholders.
This includes policies that address ESG issues in the communities in which a company operates. As a result, these considerations are generally incorporated into our evaluation of a company's investment risk or return, across all asset classes, sectors, and markets. Read our ESG Statement of Policy PDF Our commitment to sustainable investing To aid in our efforts to promote sustainable investing, guide our initiative to effectively incorporate ESG issues into investment decisions, and to support the evolution of ESG disclosure, we have joined several external organizations.
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Sustainable investing is known by many names. Among them: socially responsible, ethical, impact, and principles-based investing. Fidelity defines sustainable investing as an investing approach that integrates ESG factors into research and decision-making. Generally, sustainable investing can mean selecting companies that limit the negative impact their operations and products have on the environment; focus on more equitable relationships among and between their customers, employees, suppliers, and communities they operate in; and exhibit accountable and transparent governance with diverse and independent boards; offer compensation incentives that align with shareholders; and sound capital allocation policies.
While such an investing approach isn't new, its definition and objectives have evolved over the years—from avoiding certain investments so-called "sin stocks," such as tobacco, firearms, alcohol, and casinos to a more holistic approach, based on ESG factors. Those factors are: Environmental impact—An environmentally friendly investing objective can include companies that produce renewable and sustainable energy, enhance energy efficiency, source raw materials using eco-safe methods, use little or no hazardous chemicals in their production process, limit waste, and prioritize recycling.
Examining environmental factors can reveal which companies are responsive to consumer demand for sustainable practices. There are many examples of these types of investments. Social issues—Positive social investing objectives focus on companies that consider the impact upon all stakeholders, such as seeking gender equality, providing healthy working conditions and lifestyles, addressing wealth inequality, and showing a commitment to charitable endeavors, among other factors.
A focus on social themes can identify businesses that demonstrate a commitment to a diverse and inclusive workplace. Governance quality—Strong corporate governance systems entail having policies and principles that address potential conflicts of interest among stakeholders e.
Attention to governance can uncover which companies are committed to diverse board composition and shareholder-friendly policies. Something to consider when evaluating opportunities based on ESG criteria is what characteristics actually qualify this type of investment. Simply because a company states their goal is to reduce carbon emissions, for example, does not mean the company will definitely follow through with reducing their carbon footprint. Aligning your principles and objectives The primary reason to consider an ESG investing strategy is an attempt to match your personal beliefs with your investments.
Always be sure to consider your investment objectives, risk constraints, time horizon, liquidity needs, and tax situation. As with any investment, costs and performance should always be an important consideration. Looking deeper into ESG An important caveat when assessing these types of investments is that there is not as much historical performance data for ESG funds compared with, say, the broad US market as well as other developed markets.
For this reason, the research and conclusions drawn from sustainable investing may not be as profound. A growing number of do-gooders want their money to have a good impact on the world, and this is where ESG investing comes in. When selecting where to invest their hard-earned cash, some of todays investors put sustainable and environmental, social, and governance concerns at the forefront of their decision-making.
While this is wonderful news for the planet and the communities in which we live, it also offers investors a great chance to explore new opportunities. Some brokerages have stronger socially responsible investing offerings than others. For example, Merrill Edge and Fidelity have screener tools to help you find the right funds for your portfolio. The Social Equity Fund is designed to invest in mid- and large-capitalization U. Criteria include exposure to fossil fuels, vice products, weapons, and poor company governance , among others.
The UC Global Equity ex Fossil Fuel Fund is designed to invest in domestic and international companies that do not own fossil fuel reserves or sell tobacco products. As a result, the OCIO excludes certain types of stocks from the core menucompanies that derive their profits from thermal coal or oil sands mining and production is one example.
One item that got buried in all the talk about base federal funds rates? The central bank has already agreed to bump up rates on its overnight repurchase facility in order to provide some relief to money market funds. The Feds low base ratecombined with a tsunami of pandemic stimulushas driven down yields on short-term debt, with many funds already cutting fees to prevent going negative.
At its meeting last week, the Fed agreed to increase the interest rate on the facility to 5 basis points , helping money markets stay in the blackfor now. But with no plans to raise base rates anytime soon, and with the Treasury likely to issue more short-term debt in coming months, money markets yields may stay near-zero for some time. That could force further consolidation and fund closures.
In April , both Fidelity and Vanguard closed their government money market funds to new investors, though both firms have since reopened them. More information about Fidelitys full suite of sustainable investing funds and resources can be found at www. Fidelitys new equity funds will seek to invest in high-quality companies that are addressing climate change via corporate strategy or through products and services, prioritizing and advancing womens leadership and development, or that have proven or improving sustainability practices.
Additionally, Fidelity will offer a bond fund seeking to invest in companies that provide environmental solutions or support efforts to reduce their own environmental footprints. The mutual funds and ETFs will be available for individual investors and financial advisors to purchase commission-free through Fidelitys online brokerage platforms. These include nine mutual funds and two exchange-traded funds.
Both ETFs and mutual funds are collections of stocks or bonds, but ETFs are generally cheaper, more tax-efficient, and easier to trade.
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