The impact your funds have on climate change
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Climate-related information for investors
It’s important that we lay out our approach to climate change for Fidelity’s UK Pension Business (FIL Life business), and the investments we make on behalf of our clients. We need to understand the impact climate change could have, how we can mitigate the effects, and how best to adapt to it.
It’s also important for you to understand the climate impact of the funds you invest in. By law we have to produce reports about a fund’s climate impact – but providing this information is also the right thing to do. Because when you understand how your investments affect the planet, you can make informed choices about where you put your money.
TCFD stands for The Task Force on Climate-Related Financial Disclosures. The TCFD created a framework to help us give you clear, easy-to-compare information about the environmental impact of their investments.
The FIL Life TCFD report sets out how FIL Life takes climate-related risks and opportunities into account when managing or administering investments for clients and consumers.
This report gives our clients, members and stakeholders an understanding of the climate-related risks and opportunities we face. It shows how we address these risks, and incorporate them into our governance, strategy, risk management, and metrics and targets.
The contents of the report are in line with the TCFD’s recommendations on disclosure of climate-related risks and opportunities. Firms that have set climate-related targets must also provide detailed disclosures on those targets, their KPIs, and how they measure progress.
The Financial Conduct Authority (FCA) has rules and guidance about climate-related financial information and how it’s disclosed. Alongside that, the Task Force on Climate-Related Financial Disclosures (TCFD) created a framework that sets out what information we must share with our clients and their members.
The latest UN climate report, dated March 2023, states that we’ve already reached 1.1°C of global warming above pre-industrial averages. By ‘pre-industrial’, we mean the period 1850-1900. This was before fossil-fuel burning started to change the climate.
It’s important to lay out our approach to climate change for the FIL Life business, and the investments we make available to clients and members. We need to understand the impact climate change could have, work towards mitigating its material effects, and adapt to it. And we need to know how to handle the transition in a way that allows us to maximise the opportunities that arise.
The TCFD report covers climate-related impacts and risks of any FIL Life business that’s in scope. FIL Life supports disclosing this information because it helps to provide greater transparency – for our Trustees, employers, and corporate investors, and also pension scheme members and retail investors.
The report should help you understand the impact of FIL Life's activities on the climate. It sets out our plans and targets to reduce the impact we make. And it shows the progress we've already made.
We try to write as clearly as we can, but because we're providing information about climate change, there are some words, phrases and industry terms we have to use. You'll find a glossary explaining these terms towards the end of the report.
The metrics are calculated annually for the reporting period 1 January - 31 December.
As this is our first reporting period, we’ve used assets held by FIL Life as of 31 December 2023 to cover the calendar year up to 31 December 2023. The latest available carbon data for each company is taken from Morningstar to calculate the numbers shown in this report. For our net zero numbers, we've included data from 2020. This allows us to show our net zero journey for FutureWise, because 2020 is the year we set our net zero target. The operational emissions reported in the Asset Manager report are from 2019. You can find out more about this in the FIL Life TCFD Report.
Different parts of the Fidelity Group are required to produce their own TCFD reports. Fidelity Group is mainly concerned with Business Operations (the day-to-day running of the business), and FIL Life is mainly concerned with Investments. The climate risks and opportunities will differ between them and there may be differences in the way data has been sourced or used. However, the reports are 'companion reports'. They are complementary and read together, they give a more complete picture of our TCFD approach.
FIL Life's main data provider is Morningstar. Morningstar researches and provides information about thousands of global investments every day. They gather data on the carbon emissions of companies and assets, and provide us with metrics based on this data.
The FIL Life TCFD report covers all of FIL Life's in scope activities and sets out a framework of policy and targets across the organisation.
The product reports give specific information about the climate impact of particular funds and strategies, including FutureWise and Investment Pathways - and the funds we make available to our customers. This is useful for members who are investing in them, or who are considering investing in them. It's useful to read the product reports alongside the FIL Life TCFD Report.