Fidelity warned companies it invests in that, if they don’t take sufficient action to combat climate change, the asset manager will vote against management at shareholder meetings beginning next year.
The $787.1 billion investment firm announced new policies on climate change and gender diversity Monday that include requirements for portfolio companies to manage their environmental impact, reduce their greenhouse-gas emissions and provide specific disclosures about their emissions. To limit global warming to 1.5 degrees Celsius above pre-industrial levels, every area of the global economy “will need to go through a radical transformation” and companies that fall short of Fidelity’s minimum expectations will be penalized by votes against their executives, according to a statement.
“Our message to investee companies is clear: The climate crisis must not and cannot be ignored,” said Jenn-Hui Tan, global head of stewardship and sustainable investing at Fidelity, in a statement. “It impacts the very nature of major industries in which we invest, and as such must be high on the agenda of all companies.”
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Make female executives and heiresses feel dumb about personal finance and they’ll take their portfolios elsewhere.
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The industry’s largest money manager experienced record inflows to sustainable products in the first six months of the year.
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“Given the moment that we’re at in history with all of the threats to racial, gender and climate justice, it really felt like it was time to expand what we were doing.” Rachel Robasciotti says.
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Fidelity’s warning comes as a growing cohort of asset managers seek to ratchet up pressure on companies to do more to address the climate crisis. BlackRock said it
Fidelity was among the founding members of the Net Zero Asset Managers
Even as money managers make greater commitments to tackle climate change, the asset management industry, and several of its leading players, have faced frequent criticism for maintaining large holdings of fossil-fuel companies and not doing enough to force them to change.
Fidelity also said Monday it plans to press for greater gender diversity on boards. The money manager said it will actively engage with portfolio companies and consider voting against management in most developed markets that don’t have at least 30% female representation on their boards. In markets where standards on diversity are still developing, Fidelity said it will have an initial threshold of 15%.
The Financial Times earlier reported Fidelity’s new initiatives.
