Nature loss is one of the most severe risks humanity faces over the next decade according to the World Economic Forum, and is considered a significant systematic risk. Tackling nature loss is therefore one of Fidelity International’s (‘Fidelity’) top priorities within its sustainability strategy. Today, in line with its sustainability ambition, Fidelity takes a step further in its commitment to addressing nature loss with the publication of its Nature Roadmap.
This follows the firm’s initiative as a foundation member and signatory of the Finance for Biodiversity pledge, which aims to protect and restore biodiversity.
The Nature Roadmap outlines the company’s approach to further integrating nature in its sustainable investments and stewardship processes and reinforces nature-related risks management and opportunities. This includes a range of actions, including:
· Ensuring robust governance and oversight of sustainability related issues, including nature
· Integrating nature in its proprietary Environmental, Social and Governance (ESG) tools, including its ESG ratings, Sustainable Development Goals (SDG) tool and Climate rating, as well as leveraging external tools and data to enhance the integration of nature-related impacts, dependencies and associated risks and opportunities
· Integrating nature in its stewardship and voting activities (see more below)
· Ensuring nature is embedded in its Sustainable Investing Framework, to facilitate responsible capital allocation and deliver solutions to clients
· Policy engagement and system-wide stewardship
Focusing on deforestation: addressing the issue through voting
At COP26, Fidelity signed the Financial Sector Commitment Letter on Eliminating Commodity-Driven Deforestation with the intention to use best efforts towards the goal of eliminating forest-risk agricultural commodity-driven deforestation activities in investment strategies by 2025 via engagement and stewardship.
The Nature Roadmap firmly articulates the company’s engagement-led approach, including its expectations of exposed investee companies, and its escalation approach where companies do not meet expectations.
From 2024, Fidelity will begin to vote against companies in high-risk sectors that do not meet its minimum standards of deforestation-related practices and disclosure.
Jenn-Hui Tan, Chief Sustainability Officer, Fidelity International comments: “The loss of natural capital is a systematic risk to capital markets, and as such, prioritising and contributing to the health and preservation of our biodiversity and ecosystems is essential.
“The launch of our Nature Roadmap, along with the application of our deforestation voting principles and guidelines, demonstrates our commitment to natural capital conservation, setting out the approach we have chosen and articulating the broad range of tools we have at our disposal to integrate nature in our investment and stewardship processes.
“We seek to make a difference not only through direct corporate dialogue but in collaboration with the industry through system-wide stewardship, helping to shape an enabling policy and regulatory environment which places a fair value on natural capital and the ecosystem services from which we all benefit.”
