Partner insight: Effective risk management is vital in a time of crisis

Supply chain transparency, research and a robust ESG rating framework are vital as the war in Ukraine continues, says Jenn-Hui Tan

The war in Ukraine, in addition to its tragic human costs and the displacement of millions of people, has had major financial repercussions as governments and companies have moved to cut Russia out of the international financial system and supply chains.

"Supply chain transparency, research and a robust ESG rating framework are vital for effective risk management in a time of crisis, says Jenn-Hui Tan, Global Head of Stewardship and Sustainable Investing at Fidelity International.

The war has had clear implications for the way countries source energy and it has exposed the risk on reliance on autocratic regimes for oil and gas.

"We believe it will drive governments to reduce energy dependence and while there are still challenges ahead for this transition, we expect in the no-too-distant future, Europe's energy grid will be both cleaner and more self-sufficient.

Commodities such as steel and aluminium were already rising prior to the invasion of Ukraine and the war has accelerated those gains.

"Rare metals need for needed for electric motors, photovoltaic cells and batteries could be particularly sensitive to price squeezes. Retaining access to these key supply chains will be key to a successful transition to renewable energy."

For more on how Fidelity is navigating risk during this crisis, as well as the broader outlook for sustainability in 2022, read our exclusive guide

This post is sponsored by Fidelity International