Fidelity: Companies are lagging behind with net zero

7 juni 2024

• Globally, 68% of companies responsive to Fidelity International analysts’ engagement efforts over the past 12 months
• 43% of Fidelity’s analysts surveyed believe companies have a credible net zero goal for 2050
• Regulation, government support, and shareholder action top areas expected to spur improvements in companies’ environmental practices

Reaching net zero is critical for the survival of our planet, but getting there remains one of the toughest challenges the world faces to date. Encouragingly, Fidelity International’s (Fidelity) annual ESG (environmental, social, governance) analyst survey finds companies remain keen to engage with stakeholders on how they can improve their sustainability efforts, recognising the rapidly changing physical, economic and regulatory environment around them.

Fidelity’s ESG analyst survey gathers the views of its in-house analysts across the world, aggregating bottom-up information from c.20,000 individual company interactions* to find key ESG trends in the corporate landscape.

Globally, Fidelity’s analysts reported 68% of companies they cover have been responsive to their engagement efforts over the past 12 months. Companies in Japan led the pack with 89% keen to engage in the last year, followed by EMEA / Latin America (83%) and Asia Pacific, ex China, ex Japan (71%).

Companies lag behind in net zero progress but risks become reality 

Only 43% of Fidelity’s analysts surveyed believe companies have a credible net zero goal for 2050 as it stands today, highlighting the urgency in accelerating net zero plans. However, companies are waking up to the risks of not meeting targets, with 85% of Fidelity’s analysts believing companies are addressing the threats to their businesses posed by potential changes in climate and nature.

Three most effective ways we can move the needle

While it is clear that there is still a long journey ahead to reach net zero, Fidelity’s analysts identify three areas that are expected to spur improvements in companies’ environmental practices: regulation, government support, and shareholder action.

Jenn-Hui Tan, Chief Sustainability Officer at Fidelity International comments:

'While companies may be lagging on their transition plans, there is growing awareness of the threats posed by a warming climate and deteriorating ecosystems, providing companies with a strong incentive to stay engaged. Despite an openness from companies to engage, our survey highlights there is still a long way to go, and companies need continued support in reaching their net zero goals. Regulation, government incentives and shareholder action all have a key role to play in creating an enabling environment for a successful corporate net zero transition, recognising that long term decision-making requires careful consideration of trade-offs and limitations in both financial and sustainability objectives, against an uncertain macro backdrop.'

Fidelity’s ESG Analyst Survey consists of responses from 115 analysts at Fidelity International, May, 2024.

*Source: Fidelity International, as at 31 December 2023. Includes all company meetings (such as, one-one, small and large group meetings, initial public offers, early look, deal meetings and meeting with private / non-listed companies) across equities, fixed income and solutions & multi asset, and across all locations - including Fidelity Canada. This is the most recent data available.