Fidelity International has become the latest fund group to launch proprietary sustainability ratings.
In an announcement on Wednesday, that company said the its sustainability ratings would examine the fixed income and equities universe of more than 3,000 issuers, using its in-house research capabilities and engagement with company management teams.
The framework segments the investment universe into 99 subsectors, with industry-specific criteria which result in each issuer being assessed against its peers and awarded a rating of A to E.
“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,” said Ned Salter, the company’s head of equity.
“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.”
The company said that its ratings will be based on the assessments of more than 180 equity and fixed income analysts who participate in 16,000 company meetings each year. These ratings are to be updated annually or if an issuer is affected by an exceptional event, or changes its policies.
“Evaluating how effectively a company serves its stakeholders in the broadest sense is integral to our investment process,” said global head of research, fixed income, Marty Dropkin.
“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.”