Fidelity International’s ESG Analyst Survey found that European companies are by far the most like to be taking action on net-zero, while Chinese companies are laggards, but are starting to change.

The annual survey asked its in-house analysts from across the world about the companies they cover.

One question posed to the analysts was: "When it comes to the transition to a low carbon economy, what proportion of your companies are likely to take the following action?"

Respondents could choose between: Leading the charge; Starting to change and being Unlikely to act.

Europe by far had the most companies ‘leading the charge', with over 50% falling into the category and just 10% ‘unlikely to act'. China, the bottom by region, had just under 20% leading and nearly 30% unlikely to change.

However, this is a significant improvement for China, according to the firm.

"The positive trajectory of China's transition shows that Chinese companies are responding positively to increasing investor awareness and top-down cues after Beijing's 2020 announcement that it is targeting net-zero by 2060," said Fiona O'Neill, head of strategic initiatives, global investment research at Fidelity International.

The survey also found meetings with boards and management over the past year have included a wider range of discussion topics, including employee welfare and diversity.

O'Neill explained that "after the disruptions of the past year, supply chains are in focus, especially labour concerns, which showed the largest increase in mentions by the analysts".

Almost 50% of analysts expected to engage with companies on supply chain labour issues in the next year, with a similar amount citing diversity as a topic of discussion and employee welfare breaching the 50% mark.

"The natural world is a key concern and, from a low base, biodiversity features in 26% of analysts' conversations, with our team expecting that to rise in the year ahead," added O'Neill.

Source: Investment Week

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