Fidelity International threatens to take a hard line on climate and gender issues

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Fund Management Update

Fidelity International, a global asset management company, said it will punish the directors of more than 1,000 companies around the world next year if they fail to address climate change issues and insufficient gender diversity on the board.

Traditionally, large investors have been reluctant to vote against re-election as directors at shareholders’ meetings, but Fidelity said that from 2022 onwards, if the company is deemed to have made insufficient progress on board diversity or has insufficiently responded to board members. The board members will be held accountable. Global warning.

Jenn-Hui Tan, Global Head of Management and Sustainable Investment at Fidelity International, said: “Ultimately, the board of directors needs to take responsibility.” “This is their responsibility.”

Fidelity manages $787 billion in customer assets, and the company said it aims to target approximately 1,000 companies that are major greenhouse gas emitters at the industry level or that make significant contributions to carbon emissions in the asset management company’s own portfolio.

It will vote against the company’s directors who do not have a climate change policy or do not disclose emissions. It is expected that companies in the most risky industries will set targets for reducing carbon emissions and other indicators. Fidelity warned that, depending on the status quo of its target companies, it may eventually vote against the re-election of directors of 300-400 companies on the issue of climate change.

Fidelity also estimates that one-third of the directors of the 4,000 companies it invests in Diversity of the boardIt said it would vote against directors in developed markets where the proportion of women on the board of directors is no less than 30%, or that in markets where “gender standards are still being developed” the proportion of women is no less than 15%. Asset managers have voted against the all-male board.

Tan said that Fidelity hopes that by talking to the board of directors in the coming months, it can encourage the company to take stronger actions on board diversity and climate change.

“We hope that our policies will help the company…recognize the value of having a diverse board of directors and ensure that they have the right level of representation,” he said.

He added that the focus on diversity “will not start and end with board diversity.” In JapanFor example, Fidelity is conducting so-called participation activities, which require companies to provide data on women’s participation at the workforce, management and board levels, and gender pay gaps.

Colin Baines, investment project manager of Friends Provident Foundation, who has been promoting the use of voting by fund companies on environmental, social and governance issues, said that voting against the promise of director re-election is significant.

“We need to see formal shareholder participation in upgrading policies and stronger management become industry norms for responding to the most pressing social challenges and ESG risks (such as avoiding dangerous climate change),” he added.

Black stone Legal and general investment management companies are other large asset management companies, and they have insufficiently responded to the same issue with directors. BlackRock said that in the year to the end of June 2021, more than 1,850 directors voted against it due to lack of diversity on the board, and 255 directors voted against it due to climate-related issues.

Last year, Axa Investment Managers announced that it would adoption One of the most stringent policies for gender diversity in the fund industry requires that the board of directors have at least one-third of women in developed markets. It also stated that if women do not have at least one seat or 10% of the larger board, it will vote against the chairman of the nomination committee or against approving accounts in emerging markets and Japan.

Share Action CEO Catherine Howarth said: “It’s long overdue to vote against the directors of corporate climate laggards. We commend asset management companies for clarifying their voting criteria before the 2022 Annual General Meeting of Shareholders.”

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