• Adoption of New FCA Label: Fidelity International plans to implement the ‘Sustainability Focus’ label under the FCA’s Sustainability Disclosure Requirements (SDR) for three of its UK domiciled equity funds, totaling over £865 million in assets.
• Commitment to ESG Standards: The selected funds will meet SDR criteria, investing at least 70% of their assets in companies contributing to environmental and social outcomes, verified through Fidelity’s SDG tool and the EU Taxonomy.
• Future Plans: Fidelity International is also exploring the adoption of additional SDR labels across its wider fund portfolio, reinforcing its sustainable investing framework.

Fidelity International has announced its intention to adopt the ‘Sustainability Focus’ label for three equity funds under the Financial Conduct Authority (FCA)’s Sustainability Disclosure Requirements (SDR). This move is part of Fidelity’s strategy to enhance transparency and align with evolving sustainability regulations.

The three funds in question—Fidelity Sustainable UK Equity Fund, Fidelity Sustainable Global Equity Fund, and Fidelity Sustainable European Equity Fund—comprise assets exceeding £865 million. These funds aim to generate long-term investment value, with at least 70% of their assets allocated to companies that contribute positively to environmental and social outcomes. Monitoring and reporting for these funds will be carried out using Fidelity’s proprietary Sustainable Development Goal (SDG) tool and the EU Taxonomy.

Background on FCA’s SDR

The FCA introduced the SDR in November 2023 to aid UK investors in distinguishing the sustainability attributes of investment products and to mitigate greenwashing risks. The SDR outlines four distinct labels: ‘Sustainability Focus,’ ‘Sustainability Improvers,’ ‘Sustainability Impact,’ and ‘Sustainability Mixed Goals.’ Each label has specific criteria, including a requirement for products to have at least 70% of their assets invested in line with their stated objectives and ongoing product-level disclosures.

Related Article: Fidelity International Launches Global Blue Transition Bond Fund, Targets Ocean and Freshwater Sustainability

Although originally set for December 2024, the FCA has postponed the implementation of SDR naming and marketing rules to April 2025, providing firms with additional time to comply with the new standards.

Jenn-Hui Tan, Chief Sustainability Officer at Fidelity International, highlighted the importance of these developments, stating,

“We welcome the introduction of SDR and see it as an important stage in the development of sustainable investing in the UK, giving investors greater confidence to allocate to sustainable funds. We believe the ‘Sustainability Focus’ label aligns well with the established investment approach of these funds and builds on our approach to managing SFDR Article 9 funds for European investors.”

Fidelity’s adoption of the ‘Sustainability Focus’ label complements its broader Sustainable Investing Framework, reinforcing the firm’s dedication to meeting local and global ESG regulations and client needs. The firm also noted it is assessing opportunities for applying other SDR labels within its fund range.

Looking Forward
Fidelity’s proactive measures in aligning with SDR labels demonstrate a clear commitment to enhancing sustainable investing practices, ensuring its products meet rigorous standards for environmental and social contributions.

This step positions Fidelity International as a frontrunner in sustainable fund management, catering to an investor base increasingly attentive to transparent and impactful ESG investments.

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