Fidelity International (Fidelity) has launched its proprietary sustainability ratings, as it looks to enhance its global research capabilities.
The new ratings will evaluate the focus and trajectory of companies on ESG-related issues, covering over 3,000 issuers in Fidelity’s equities and fixed income universe. They will be updated annually or after a change of policy at a company.
The ratings will divide Fidelity’s investment universe into 99 subsectors. Each subsector will industry-specific criteria and every issuer will be assessed each relative to its competitors with an A to E rating system.
Fidelity’s ratings will utilise the viewpoints of 180 equities and fixed income analysts, who take part in more than 16,000 company meetings a year. The investment solutions firm will integrate the proprietary ratings into its investment process and they will be available for all of its investment teams as an additional source of insight, and to support investment decisions across its client portfolios.
Marty Dropkin, global head of research, Fixed Income, Fidelity International said evaluating companies from an ESG perspective was crucial to the future of its investment process.
He said: “Evaluating how effectively a company serves its stakeholders in the broadest sense is integral to our investment process. Building this proprietary sustainability ratings tool was a natural next step that matches our bottom-up fundamental research process and draws on our deep corporate access.”
Ned Salter, head of equity, Fidelity International believed the ratings will provide clients with more transparency when looking over the ESG performance of companies.
He said: “The strength of our proprietary ratings lies in the integration of our equity and fixed income research at the issuer level with the ongoing engagement undertaken by our ESG team, portfolio managers and analysts. This gives us the opportunity to provide our clients with a truly forward-looking view of the multiple factors impacting a company’s ESG performance and future trajectory.”
