Sustainable investing

As a member of a workplace pension you and/or your employer are contributing to your pension pot each month. When you save into a pension, that money is invested into funds. This makes you an investor, and you can decide where your contributions go. You can opt to invest in the default fund, or you can choose to self-select funds.

At Fidelity, we carefully monitor the funds that are offered through our workplace pensions. We expect the fund managers we work with to outline how they assess companies on ESG factors. In addition, we require fund managers to measure the effectiveness of their strategy in terms of how it benefits members of pension schemes and other investors.

Learn more about the impact your funds have on climate change

Read more about our engagement policies and those of our Fund Managers:

Read the Fund Managers’ shareholder engagement policies for FIL Life Ltd
Read our Shareholder Engagement Policy

Whether you are investing via your scheme's default investment option or you are choosing your own funds for your workplace pension, you can find out more about the funds you are invested in by reading about the investment objectives in fund documentation.

There are different approaches to investing sustainably - you might invest in funds that avoid certain activities or industries altogether. Others see sustainable investing as a more proactive approach, where companies make a positive difference and act as voice for change. Finally, you can look at companies in each sector with the strongest ESG credentials.

A key question when it comes to sustainable investing is - does ESG and Sustainable Investing lead to lower returns?

It has become increasingly clear that companies that have higher environmental, social and governance standards are often better managed businesses and therefore more likely to succeed. However, like any investment, the value of ESG and sustainable investments can go down as well as up, so you may get back less than you invest.

All investments come with a certain degree of risk and sustainable funds are not necessarily more or less risky than any other fund.

Just how much risk you're prepared to take is likely to be influenced by a number of factors, including:

• your investment goals
• the timescale over which you are investing
• whether you require income from your investment or want to grow your portfolio
• the type of investment and the level of risks that suits you.

The fund factsheets on PlanViewer break down the level of risk so you can choose what is right for you and what you feel comfortable with.

We recognise that climate change poses one of, if not the most, significant risk to the long-term profitability and sustainability of companies, including our own. We are de-carbonising in a number of ways:

• Propriety ratings – as an asset manager we use these to identify companies exposed to climate risk, whether physically or from increased regulations. We then engage with companies to manage risks
• Participation in global programmes – such as Climate Action 100+ initiatives that push large emitters towards more sustainable business models
• Corporate targets – Fidelity International has committed to reduce company-wide operational CO2 emissions to be net zero by 2030, our asset management initiatives support net zero emissions on or before 2050 and our workplace investing business will be net zero by 2050 or earlier in its FutureWise default strategy

And we're also revising our sustainable investing framework - to adjust to an evolving sustainable investing landscape. Our revised framework aims to facilitate the creation and maintenance of a consistent, transparent, and practical range of investment capabilities that meet evolving client and regulatory needs. We believe this framework balances a robust approach to sustainability with a flexible approach that can accommodate different investment styles, asset classes and client preferences.