Fidelity International: Voting intentions in 2024 European AGM season

20 maart 2024

As part of its ongoing commitment to sustainability, Fidelity International ('Fidelity') today sets out its key voting considerations as Europe’s AGM season begins: addressing climate change, tackling deforestation and ensuring fair, transparent remuneration structures.

Voting at company shareholder meetings is perhaps the most direct way an investor can make their voice heard and exercise responsible stewardship. But transitioning to a more sustainable corporate environment is multi-layered, which is why Fidelity believes in combining bottom-up corporate engagement, top-down thematic engagement, and system-wide stewardship to influence positive change. This year’s voting considerations therefore complement Fidelity’s four systemic themes¹ it identified at the start of the year to help drive the firm’s engagement approach, focusing on nature loss, climate change, strong and effective governance, and social disparities.

Careful consideration of remuneration packages

Throughout 2023, a key focus for Fidelity was the alignment between executive pay and the experience of the wider workforce. As global inflationary pressures ease, and the cost-of-living falls, companies may de-prioritise internal pay equity in the face of questions surrounding competitiveness. Fidelity will continue to support fair, transparent remuneration structures that incentivise senior managers to deliver on company strategy, while aligning with shareholders' interests.

Addressing climate change

In line with Fidelity’s ambition to achieve net zero across its investment portfolios by 2050², including halving its portfolios carbon footprint by 2030³, and to phase out investment in thermal coal by 2030 in OECD countries and in the rest of the world by 2040⁴, Fidelity continues to reinforce its approach to addressing climate.

Fidelity will vote against directors at companies that fail to meet its minimum expectations on climate change governance, policies, and disclosures. Climate transition plans and climate shareholder proposals will remain in the spotlight, and Fidelity will continue to use its votes to advocate for companies to adopt decarbonisation strategies that support a credible transition to net zero.

Tackling deforestation

As a Finance for Biodiversity pledge signatory and foundation member, Fidelity has committed to protecting and restoring nature through its financing activities and investments and at COP26 in 2021, Fidelity International joined over 30 financial institutions, now representing more than $8.5 trillion of assets under management⁵, as a signatory to the Finance Sector Deforestation Action Initiative (FSDA)⁶.

Following the publication of its Nature Roadmap⁷ at the end of last year,  this year Fidelity will begin to vote against companies in high-risk sectors that do not meet its minimum standards of deforestation-related practices and disclosure.

Emilie Goodall, Head of Stewardship, Europe, Fidelity International comments:

'As a research-led asset manager, we believe that active ownership is a positive force for driving sustainable business practices. Voting is a powerful tool for change and as the AGM season begins in Europe, it is important for us to reiterate our voting intentions on the matters that we think are pivotal to address for the year ahead. However, voting statistics alone simply reflect the means, rather than the ends. We believe as an industry we must move towards tracking engagement outcomes, measuring progress made beyond the vote, against clear and consistently communicated shareholder expectations. As part of this, we have been trialling an enhanced engagement tracking approach, to better capture and monitor our ongoing engagement activity at the underlying company level, particularly in relation to our thematic engagements. This approach incorporates a wide range of engagement tools to push for real change - for example, alongside continuous behind-the-scenes engagement with all companies we invest in, we also engage with policymakers and other collaborative engagements in a bid to influence positive system-wide change.'

1. Source: Fidelity International, January 2024
2. Source: Fidelity Climate Investing Policy, October 2021, p.13
3. Source: Fidelity Climate Investing Policy, October 2021, p.13
4. Source: Fidelity Climate Investing Policy, October 2021, p.7
5. Source: The Finance Sector Deforestation Action (FSDA) Initiative, November 2021
6. Source: Financial Sector Commitment Letter on Eliminating Commodity-driven Deforestation, November 2021
7. Source: Fidelity’s Nature Roadmap, October 2023