Now reading:

Outlook: Diverse stakeholders to drive progress in 2024

Outlook: Diverse stakeholders to drive progress in 2024

  • 27 December 2023
  • By Fidelity International
  • 10 mins read

The urgency to reach net zero and stop nature loss is leading to increasingly complex markets in need of more policy direction. Fidelity International outlines here how in response to these developments, asset managers are evolving their engagement approaches to include regulators, policymakers and industry groups, alongside corporates.

Key points

  • We have identified four themes that underpin our thinking around system-level stewardship: climate change, nature loss, strong and effective governance, and social disparities.
  • Climate financing remains a significant challenge for corporates and financial institutions alike. Gradually, frameworks are emerging to help companies put in place robust strategies to meet their net zero targets.
  • The ties between climate and nature are also becoming more evident in certain industries. Some, like mining, will need to play leading roles in a successful transition.

‘System-wide stewardship’, where investors engage with a broad spectrum of stakeholders on sustainability issues, will be a driver of the ESG agenda in 2024. The aim is to help create a favourable policy and regulatory environment that enables and incentivises companies to operate more sustainably. We have identified four themes that underpin our thinking around system-level stewardship: climate change, nature loss, strong and effective governance, and social disparities.

Transition finance needed

Climate financing remains a significant challenge for corporates and financial institutions alike. Gradually, frameworks are emerging to help companies put in place robust strategies to meet their net zero targets. As more businesses publish credible transition plans, we expect further developments in transition finance, including innovation in sustainable debt instruments.

Governments are seeking to close policy gaps to make green technologies cheaper while regulators are working to channel transition financing to the right places. System-wide initiatives such as the United States’ Inflation Reduction Act provides support to develop technologies like green hydrogen and sustainable aviation fuels. Political will such as this should help to develop decarbonisation pathways for sectors where the transition is either technologically difficult or too expensive. In the EU, the introduction of the Carbon Border Adjustment Mechanism is designed to create a level playing field between companies manufacturing within the bloc and exporters to it, by ensuring that the carbon price of incoming goods is equivalent to the carbon price of production within the EU.

But the social ramifications of the transition are also front of mind. We continue to engage with firms not only on the infrastructure costs of decarbonisation but also retraining workers as requirements change. At government level, policymakers are looking for ways to protect those least able to bear the costs from up-front transition commitments as new technologies are built out. The prize is a clean energy revolution with lower operating costs and increased energy security.

Nature in focus

COP15 in 2022 proved to be a turning point in recognising the impact of nature loss as part of the climate crisis. Healthy carbon sinks and ecosystems play a significant role in achieving net zero, while climate change is a direct driver of declining biodiversity.

The economic implications are clear: it’s estimated that more than half of global GDP is moderately or highly dependent on nature. 1 The ties between climate and nature are also becoming more evident in certain industries. Some, like mining, will need to play leading roles in a successful transition.

Companies are already considering how to implement the recently published Taskforce on Nature-Related Financial Disclosures (TNFD). Like the Taskforce on Climate-Related Financial Disclosures, the framework is designed to deliver a standardised language to report on nature. This is no mean feat. Nature loss is notoriously difficult to gauge given the absence of a universal metric. Innovative technologies, like the nascent field of bioacoustics, are trying to remedy this by developing alternative measurement systems.

Elements of the TNFD have already been included in the EU’s Corporate Sustainability Reporting Directive (CSRD), a form of data collection that begins in 2024 for some firms. This is the most comprehensive reporting standard to date. The CSRD requires companies to report on their own environmental and social impact as well as sustainability-related risks to their business.

And there is more: the International Sustainability Standards Board has published its own version of sustainability disclosure standards designed to be adopted globally and focused initially on climate. Due diligence of supply chains is also gaining attention following the EU Deforestation Act and other forthcoming rules aimed at mitigating impacts on human rights.

Regulation on this scale sounds daunting, but sustainability reporting and how it links to financial reporting is an important part of mitigating the risks of climate change, nature loss, and social issues. It should also enable companies to scale up activities that not only align with the transition but drive change across the global economy.

Important information

This advertisement has not been reviewed by the Monetary Authority of Singapore.

  1. Any opinions or views of third parties expressed in this document are those of the third parties identified, and do not represent views of Oversea-Chinese Banking Corporation Limited (“OCBC Bank”, “us”, “we” or “our”).
  2. This information is intended for general circulation and / or discussion purposes only. It does not consider the specific investment objectives, financial situation or needs of any particular person.
  3. Before you make an investment, please seek advice from your Relationship Manager regarding the suitability of any investment product taking into account your specific investment objectives, financial situation or particular needs.
  4. If you choose not to do so, you should consider if the investment product is suitable for you, and conduct your own assessments and due diligence on the investment product.
  5. We are not making an offer, solicit to buy or sell or subscribe for any security or financial instrument, enter into any transaction or participate in any trading or investment strategy with you through this document. Nothing in this document shall be deemed as an offer or solicitation to buy or sell or subscribe for any security or financial instrument or to enter into any transaction or to participate in any particular trading or investment strategy.
  6. No representation or warranty whatsoever in respect of any information provided herein is given by OCBC Bank and it should not be relied upon as such. OCBC Bank does not undertake an obligation to update the information or to correct any inaccuracy that may become apparent at a later time. All information presented is subject to change without notice.
  7. OCBC Bank shall not be responsible or liable for any loss or damage whatsoever arising directly or indirectly howsoever in connection with or as a result of any person acting on any information provided herein.
  8. Investments are subject to investment risks, including the possible loss of the principal amount invested. The information provided herein may contain projections or other forward-looking statements regarding future events or future performance of countries, assets, markets or companies. Actual events or results may differ materially. Past performance figures, predictions or projections are not necessarily indicative of future or likely performance.
  9. Any reference to a company, financial product or asset class is used for illustrative purposes and does not represent our recommendation in any way.
  10. The information in and contents of this document may not be reproduced or disseminated in whole or in part without the Bank’s written consent.
  11. OCBC Bank, its related companies, and their respective directors and/or employees (collectively “Related Persons”) may, or might have in the future, interests in the investment products or the issuers mentioned herein. Such interests include effecting transactions in such investment products, and providing broking, investment banking and other financial services to such issuers. OCBC Bank and its Related Persons may also be related to, and receive fees from, providers of such investment products.
  12. You must read the Offer Document/Indicative Term Sheet/Product Highlight Sheet before deciding whether or not to purchase the investment product, copies of which may be obtained from your relationship manager.
  13. Any hyperlink to any third party article, or other website or webpage (including any websites or webpages owned, operated and maintained by third parties) is for informational purposes only and for your convenience only and is not an endorsement or verification of any such article, website or webpage by OCBC Bank and should only be accessed at your own risk. OCBC Bank does not review the contents of any such articles, website or webpage, and shall not be liable to any person for the same.

Cross-Border Market Disclaimers

  1. General: The document provided by Oversea-Chinese Banking Corporation Limited, Singapore (“OCBC Singapore”) is for general information only and is not intended for anyone other than the recipient. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person, and does not constitute an offer or solicitation by OCBC Singapore to buy or sell or subscribe for any security or financial instrument or to enter into a transaction or to participate in any particular trading or investment strategy nor an advice or a recommendation with respect to such financial products. This document may not be published, circulated, reproduced or distributed in whole or in part to any other person without OCBC Singapore’s prior written consent. This document is not intended for distribution to, publication or use by any person in any jurisdiction, where such distribution, publication or use would be contrary to applicable law or would subject OCBC Singapore and its related corporations, connected persons, associated persons and/or affiliates to any registration, licensing or other requirements within such jurisdiction.
  2. Brunei: This document has not been delivered to, licensed or permitted by the Autoriti Monetari Brunei Darussalam, the authority as designated under the Brunei Darussalam Securities Markets Order, 2013 and the Banking Order, 2006; nor has it been registered with the Registrar of Companies, Registrar of International Business Companies or the Brunei Darussalam Ministry of Finance. The products are not registered, licensed or permitted by the Autoriti Monetari Brunei Darussalam or by any other government agency or under any law in Brunei Darussalam. Any offers, acceptances, sales and allotments of the products shall be made outside Brunei Darussalam.
  3. Indonesia: The offering of the investment product in reliance of this document is not registered under the Indonesian Capital Market Law and its implementing regulations, and is not intended to constitute a public offering of securities under the Indonesian Capital Market Law and its implementing regulations. According, this investment product may not be offered or sold, directly or indirectly, within Indonesia or to Indonesian citizens (wherever they are domiciled or located), entities or residents, in any manner which constitutes a public offering of securities under the Indonesian Capital Market Law and its implementing regulations. In compliance with the Indonesian Capital Market Law and Regulation of the Indonesian Financial Service Authority No. 30/POJK.04/2019, the investment product in this document may not be distributed in Indonesian or to any Indonesian citizens (wherever they are domiciled or located), entities or residents. The investment product in this document has not been and will not be registered or filed with to the Indonesian Financial Service Authority.
  4. Japan: The information contained in this document is for general reference purposes only. It does not have regard to your specific investment objectives, financial situation, risk tolerance and particular needs. Nothing in this document constitutes an offer to buy or sell or an invitation to offer to buy or sell or a recommendation or a solicitation to buy or sell any securities or investment. You acknowledge that nothing in this document constitutes investment or financial advice or any advice of any nature.
  5. Malaysia: OCBC Singapore does not hold any licence, registration or approval to carry on any regulated business in Malaysia (including but not limited to any businesses regulated under the Capital Markets & Services Act 2007 of Malaysia), nor does it hold itself out as carrying on or purport to carry on any such business in Malaysia. Any services provided by OCBC Singapore to residents of Malaysia are provided solely on an offshore basis from outside Malaysia, either as a result of “reverse enquiry” on the part of the Malaysian residents or where OCBC Singapore has been retained outside Malaysia to provide such services. As an integral part of the provision of such services from outside Malaysia, OCBC Singapore may from time to time make available to such residents documents and information making reference to capital markets products (for example, in connection with the provision of fund management or investment advisory services outside of Malaysia). Nothing in such documents or information is intended to be construed as or constitute the making available of, or an offer or invitation to subscribe for or purchase any such capital markets product.
  6. Myanmar: The provision of any products and services by OCBC Singapore shall be solely on an offshore basis. You shall ensure that you have and will continue to be fully compliant with all applicable laws in Myanmar when entering into discussion or contracts with OCBC Singapore.
  7. Oman: This document does not constitute a public offer of investment, securities or financial services in the Sultanate of Oman, as contemplated by the Commercial Companies Law of Oman (Royal Decree No. 184/2019), Banking Law of Oman (Royal Decree No. 114/2000) or the Capital Market Law of Oman (Royal Decree No. 80/1998) and the Executive Regulations of the Capital Market Law (Ministerial Decision No. 1/2009) or an offer to sell or the solicitation of any offer to buy non-Omani investment products, securities or financial services and products in the Sultanate of Oman. It is being provided to a limited number of sophisticated investors solely to enable them to decide whether or not to make an offer to invest in financial products mentioned in this document, outside of the Sultanate of Oman, upon the terms and subject to the restrictions set out herein and may not be reproduced or used for any other purpose or provided to any person other than the original recipient. Additionally, this document is not intended to lead to the making of any contract within the territory or under the laws of the Sultanate of Oman. The Capital Market Authority of Oman and the Central Bank of Oman take no responsibility for the accuracy of the statements and information contained in this document or for the performance of the financial products mentioned in this document nor shall they have any liability to any person for damage or loss resulting from reliance on any statement or information contained herein.
  8. Russia: The investment products mentioned in this document have not been registered with or approved by the local regulator of any country and are not publicly distributed in Singapore or elsewhere. This document does not constitute or form part of an offer or invitation to the public in any country to subscribe for the products referred to herein.
  9. Taiwan: The provision of the information and the offer of the service concerned herewith have not been and will not be registered with the Financial Supervisory Commission of Taiwan pursuant to relevant laws and regulations of Taiwan and may not be provided or offered in Taiwan or in circumstances which requires a prior registration or approval of the Financial Supervisory Commission of Taiwan. No person or entity in Taiwan has been authorised to provide the information and to offer the service in Taiwan.
  10. Thailand: Please note that none of the material and information contained, or the relevant securities or products specified herein is approved or registered in Thailand. Interests in the relevant securities or products may not be offered or sold within Thailand. The attached information has been provided at your request for informational purposes only and shall not be copied or redistributed to any other person without the prior consent of OCBC Singapore or its relevant entities and in no way constitutes an offer, solicitation, advertisement or advice of, or in relation to, the relevant securities or products by OCBC Singapore or any other entities in OCBC Singapore’s group in Thailand.
  11. The Philippines: The information contained in this document is not intended to constitute a public offering of securities under the Securities Regulation Code of the Philippines.
  12. Dubai International Financial Center (DIFC): OCBC Singapore is not a financial institution licensed in the Dubai International Financial Centre ("DIFC") or the United Arab Emirates outside of the DIFC and does not undertake banking or financial activities in the DIFC or the United Arab Emirates nor is it licensed to do so.
  13. United Kingdom: In the United Kingdom, this document is being made available only to the person or the entity to whom it is directed being persons to whom it may lawfully be directed under applicable laws and regulations of the United Kingdom (such persons are hereinafter referred to as ‘relevant persons’). Accordingly, this document is communicated only to relevant persons. Persons who are not relevant persons must not act on or rely on this document or any of its contents. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons. Relevant persons in receipt of this document must not distribute, publish, reproduce, or disclose this document (in whole or in part) to any person who is not a relevant person. The deposits referred to in this communication are maintained with Oversea-Chinese Banking Corporation Limited, Singapore (“OCBC Singapore”). OCBC Singapore is incorporated in Singapore and is authorised and regulated by the Monetary Authority of Singapore. Certain deposits offered by OCBC Singapore are covered by the Singapore Deposit Insurance Scheme, subjected to conditions. The bank’s paid up capital and reserves exceeds SGD 1.5 billion – further information about the capital position of OCBC Singapore may be found at OCBC Bank's website: > OCBC Group > Investors > Annual report and AGM.
  14. United Arab Emirates (U.A.E): The offering of certain products in this document has not been and will not be registered with the Central Bank of United Arab Emirates or Securities & Commodities Authority in the United Arab Emirates. Any products in this document that are being offered or sold do not constitute a public offering or distribution of securities under the applicable laws and regulations of the United Arab Emirates. This document is not intended for circulation or distribution in or into the UAE, other than to persons in the UAE to whom such circulation or distribution is permitted by, or is exempt from the requirements of, the applicable laws and regulations of the United Arab Emirates. The distribution of the information contained herein by the recipient is prohibited. Where applicable, this document relates to securities which are listed outside of the Abu Dhabi Securities Exchange and the Dubai Financial Market. OCBC Singapore is not authorized to provide investment research regarding securities listed on the exchanges of the United Arab Emirates.
  15. United States of America: This product may not be sold or offered within the United States or to U.S. persons.

Are you sure you want to leave our site?

You are leaving the OCBC Bank website and about to enter a third party website that OCBC Bank has no control over and is not responsible for. Before you proceed to use the third party website, please review the terms of use and privacy policy of their website. OCBC Bank’s Conditions of Access and Privacy and Security Policies do not apply at third party websites.
I would like to stayLeave website