Partner insight: The three major sustainability challenges for 2022

Addressing deforestation, a just transition and double materiality will be key to make progress on COP26 pledges, says Jenn-Hui Tan

The world is facing a series of complex, interdependent problems. Fidelity has identified three areas that are coming into focus: deforestation, a just transition and double materiality.

Jenn-Hui Tan, Global Head of Stewardship and Sustainable Investing at Fidelity International, says deforestation sits at the intersection of climate change and biodiversity loss, and is a systemic risk akin to climate change.

To tackle the problem, Fidelity's sustainable investing team are conducting an assessment of the group's exposure through their investment portfolios to companies that are significantly contributing to deforestation.

A second priority is a "just transition." Tan says it's intended to maximise the net social benefits of the transition, whether that is creating higher quality green jobs or mitigating some of those social risks, such as stranded workers and communities.

Double materiality aims to incorporate not only the financial risks to the company, but also how the company's behaviour can create negative or positive impacts on the environment and society.

For more on these three challenges, plus how Fidelity is helping to address them through its engagement work, read our exclusive guide

This post is sponsored by Fidelity International