Fidelity International has built a global corporate bond portfolio with the aim of aiding companies reduce emissions and the world’s overall carbon dioxide levels
The group said carbon dioxide levels today are higher than at any point in at least the past 800,000 years, and as a result climate change represents a huge threat to our planet.
In response, it has launched the Fidelity Funds – Sustainable Reduced Carbon Bond Fund, managed by Kris Atkinson with Sajiv Vaid supporting as co-portfolio manager, to assist companies in moving towards greener business models using an active engagement approach.
The fund limits exposure to companies with the highest carbon emissions intensity and largest carbon reserves, while looking to identify companies transitioning towards a greener environment.
Lead fund manager Atkinson said:“Some investors believe green investing is black and white, only considering companies with low or zero emissions. It isn’t. To tackle the threat of climate change as investors we need to embrace companies transitioning to greener business models, not exclude them. By actively engaging with companies we can reduce emissions, influence their decarbonisation strategies and move to a more sustainable future.”
The product joins the five-strong Fidelity Funds range which includes two sustainable thematic funds focusing on carbon reduction and water and waste, as well as three equity and fixed income funds.
Mark Preskett, portfolio manager at Morningstar Investment Management, said: “We see this is welcome addition to the growing range of sustainable corporate bond funds being brought to the market. We rate the London-based corporate bond team at Fidelity highly and have exposure to their conventional credit funds in our managed portfolios.
“It would be interesting to run the fund through our ESG screens. ESG and sustainability means different things to different people. We use Sustainalytics data to assess the ESG-ness of a fund, while others could use either MSCI and FTSE to provide an ESG assessment. We have found that what may be a sustainable product for one provider, doesn’t qualify with another.
“We currently have exposure a sustainable US corporate bond ETF in our ESG portfolios but are continually assessing the marketplace for other offerings as they are launched.”