Climate change could potentially cost the global economy $23 trillion by 2050 if net-zero emissions targets are not met, according to Fidelity’s Asher Anolic, citing a recent study by reinsurance giant Swiss Re.
“Global economic progress over the next century may very well be defined by climate-related investments,” says Anolic, portfolio manager of Fidelity® Climate Action Fund (FCAEX). “Demand for solutions to ease the impact of carbon emissions will only rise, and data suggests the growth of these solutions should substantially outpace global gross domestic product in the future.”
Launched in 2021, the fund is a thematic equity strategy dedicated to investing in domestic and international companies working to address climate change or its impact either indirectly through their corporate strategy or directly through the technology, services, or products they provide.
Companies and governments alike are investing heavily in their efforts toward a carbon-neutral footprint and, as Anolic explains, he is focused on those ahead of the curve in incorporating carbon reduction into their corporate missions, as they should see fewer future business model risks and disruptions.
In managing the fund, Anolic invests in companies that generally fall into three categories: innovators, mitigators, and good actors.
“Innovators,” Anolic notes, are those firms with technology, products, or processes that help individuals, corporations, and/or governments reduce their carbon footprint.
A good example of an innovator within the portfolio, according to Anolic, is Vestas Wind Systems (VWDRY), a leader in wind-turbine technology. The company’s goal is to achieve carbon neutrality by 2030 without using carbon offsets, he explains. Vestas has grown into a sizable overweight position as of March 31.
“Mitigators” offer the technology, products, or processes that help offset the impact of global climate change, he says, citing consulting and engineering services firm Tetra Tech (TTEK). Its key business in water-resource management is particularly important in helping to fight one of the most harmful effects of climate change, reveals Anolic.
Lastly, he targets “good actors” that make a commitment to carbon neutrality, primarily by incorporating this goal into either their corporate strategy or mission statement. Here, he mentions Kering (PPRUF), a French-based multinational corporation specializing in luxury goods that owns the Yves Saint Laurent, Bottega Veneta, and Gucci brands, among others. “The firm has a strong and long-tenured sustainability track record, and the business is carbon neutral across its operations, sourcing, and supply chain,” says Anolic.
In fact, he underscores that Kering reduced its operating greenhouse gas emissions by 77% between 2015 and 2018, while remaining on target to reduce 50% of total greenhouse gas emissions by 2025.
Looking ahead, Anolic foresees a concerted effort by companies around the world to slow the impact of climate change. “The opportunity to invest in businesses striving to make a difference is tangible and potentially profitable,” concludes Anolic.
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Asher Anolic is a portfolio manager in the Equity division at Fidelity Investments.
In this role, Mr. Anolic manages the Fidelity and Fidelity Advisor Climate Action Funds, and serves as co-manager of Fidelity Growth Discovery Fund, Fidelity Capital Appreciation Fund, Fidelity Advisor Equity Growth Fund, Fidelity Advisor Series Equity Growth Fund, Fidelity VIP Growth Portfolio, and Fidelity VIP Dynamic Capital Appreciation Portfolio.
Previously, Mr. Anolic co-managed Fidelity Environment and Alternative Energy Fund, and also covered the pharmaceutical sector, global consumer staples, and regional banks. Additionally, he managed the Fidelity Select Pharmaceuticals Portfolio.
Before joining Fidelity in 2008, Mr. Anolic was a summer intern at Bear Stearns. Previously, Mr. Anolic served as a director at Thomson Financial and as an analyst at Herzog, Heine, Geduld, Inc. (Merrill Lynch). He has been in the financial industry since 2000.
Mr. Anolic earned his bachelor of arts degree in political science from Vassar College and his master of business administration degree from the Johnson Graduate School of Management at Cornell University.