Fidelity unveils sustainable climate solutions fund

AJ Gonzalez | September 27, 2021

UK Today News, 9/6/21, 2 minute read

The Fidelity Funds — Sustainable Climate Solutions fund aims to achieve long-term capital growth by investing in companies which enable global decarbonisation efforts.

These companies offer solutions that materially reduce greenhouse gas emissions versus incumbent technologies. Investments will include companies involved in the design, manufacture or sale of products or services in technologies or solutions such as electric vehicles, green hydrogen, autonomous vehicles, renewable energy, smart grids, industrial automation and agricultural efficiency.

Velislava Dimitrova, lead at portfolio manager, Fidelity International, said: “Climate change has prompted decarbonisation policies around the world to help achieve global carbon neutrality. The world needs to decarbonise urgently, at a faster pace that we have seen to date, and investors can play a major role in supporting this change.

“The decarbonisation challenge is on a scale unmatched in human history. But it is one that offers the companies meeting it a 30-year period of growth that surpasses even the internet revolution. Our Sustainable Climate Solutions Fund offers investors access to this long-term global megatrend.”

The Fidelity Funds — Sustainable Climate Solutions fund, which is classified as Article 8 under the EU Sustainable Finance Disclosure Regulation (SFDR), forms part of Fidelity’s expanding sustainable family of funds. The fund adopts a sustainable thematic strategy under which a minimum of 70% of the fund’s net assets will be invested in securities of companies that maintain sustainable characteristics.

Cornelia Furse, co-portfolio manager atFidelity International, added: “Unlike other climate funds, we focus on carbon reduction, not carbon avoidance. Investing in low emission sectors will not be enough to reverse 150 years of rising greenhouse gas emissions. Our fund will identify and invest in existing and emerging solutions that help decarbonise society.

“The decarbonisation trend is currently at the early stage of penetration and will be driven by a combination of innovation, improving economics, accelerated governmental support and changing consumer behaviours. It is the stocks exposed to these themes that will drive superior investment opportunities for our investors.”

Fund managers representing $23trn in assets join net zero initiative

To keep global warming to the 1.5 °C above pre-industrial levels as recommended in the Paris Agreement, experts predict the global economy will need to go through a radical transformation, affecting most areas of human activity. It means reversing over 150 years of rising greenhouse gas emissions and reaching, or exceeding, net zero targets within 30 years – at a cost of $144trn, almost seven times annual US GDP.

Christian Staub, managing director Europe at Fidelity International, said: “The race to net zero is on. At Fidelity, we have also committed to reduce our operational carbon emissions to net zero by 2030, and we’re working collaboratively with peers in the Net Zero Asset Managers initiative, supporting the transition towards global net zero emissions.”

According to Fidelity International analysts, almost a quarter of all companies will be carbon neutral by the end of this decade.

The fund will have around 40 to 60 positions and comes with an OCF of 1.10%

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