Fidelity International has launched the Fidelity Global Equity Research Enhanced PAB UCITS ETF, an actively managed fund designed to deliver long-term income and capital growth while aligning with the Paris Agreement’s climate objectives. The new vehicle strengthens Fidelity’s commitment to integrating sustainability into its investment strategies and marks a significant milestone as the firm’s first equity ETF within its Research Enhanced range to follow the Paris-Aligned Benchmark (PAB) framework.

Advancing Climate Alignment Through Active Management

The new ETF blends active fundamental research with quantitative modeling to build a diversified portfolio of global equities that both pursues financial performance and systematically limits exposure to high-carbon assets. Classified as Article 9 under the EU Sustainable Finance Disclosure Regulation (SFDR), the fund adheres to one of the most stringent sustainability classifications available in Europe, signifying a product with sustainable investment as its primary objective. Paris-Aligned Benchmarks require participating indices to achieve at least a 50% reduction in greenhouse gas (GHG) emissions intensity compared with the parent index, alongside a 7% annual decarbonization trajectory. By following this framework, Fidelity’s ETF aims to ensure that portfolio holdings are consistent with a global temperature pathway of 1.5°C or lower.

“Sustainability remains a core consideration for many of our investors, and we are seeing increased demand for a greater range of options to express their sustainability preferences,” said Jenn-Hui Tan, Chief Sustainability Officer at Fidelity International. “This evolution of our product range provides more choice and transparency for clients integrating climate objectives alongside financial goals.”

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Integrating Research and ESG Analytics

The Fidelity Global Equity Research Enhanced PAB UCITS ETF will track the Solactive ISS ESG Screened Paris Aligned Developed Markets USD Index NTR as its benchmark. However, unlike traditional passive ETFs, Fidelity’s actively managed model applies the firm’s proprietary research insights spanning both fundamental equity analysis and forward-looking ESG assessments to adjust weights, optimize exposure, and seek returns above the benchmark. According to the firm, the ETF will tilt toward companies with higher ESG ratings and credible transition pathways while avoiding those with significant fossil-fuel-related activities or inadequate climate risk management.

“At Fidelity, we’re proud to bring our clients a broad and growing range of active ETFs that draw on the depth of our global investment expertise,” said Neil Davies, Head of ETF Product & Capital Markets for Europe and Asia Pacific. “This addition gives investors greater flexibility across geographies and sustainability preferences, combining the efficiency of ETFs with the advantages of active insight.”

Responding to Investor Demand for Sustainable Solutions

Fidelity’s expansion into Paris-aligned investment products comes as global asset owners increasingly seek portfolios that marry performance with measurable climate impact. Institutional investors, in particular, are under mounting pressure from net-zero commitments and disclosure frameworks such as TCFD, ISSB, and the EU Taxonomy to demonstrate portfolio-level alignment with international climate targets. The firm’s new ETF responds directly to this demand by providing investors with a transparent, rules-based approach to decarbonization anchored in active oversight and stewardship. Fidelity’s approach also allows for engagement with companies in transition, ensuring that capital allocation drives real-world emissions reductions rather than simply excluding high emitters.

A Strategic Step in Fidelity’s ESG Roadmap

The launch of the PAB ETF reinforces Fidelity’s broader sustainability strategy, which has seen the firm expand its Research Enhanced ETF range to cover multiple asset classes and geographies. These products aim to combine the best features of index-tracking efficiency and active alpha generation offering cost-effective solutions for investors seeking sustainable exposure without compromising returns. By embedding climate science into portfolio construction and leveraging in-house ESG research, Fidelity International is positioning itself as a leader in Paris-aligned active investing. The new ETF also serves as a blueprint for how the firm plans to scale its climate-focused product offerings in the coming years, aligning with its commitment to achieve net-zero emissions across its investment portfolios by 2050.

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Outlook: Active ETFs Driving the Next Phase of ESG Investing

The debut of Fidelity’s Paris-Aligned Research Enhanced ETF signals a growing shift toward active ESG ETFs that go beyond passive replication of climate benchmarks. For investors, this evolution means greater flexibility, accountability, and performance potential in achieving climate-aligned goals. As Fidelity continues to integrate data-driven ESG analytics, fundamental insight, and Paris-aligned methodologies, it is helping shape a new generation of climate-conscious investment solutions bridging the gap between alpha generation and environmental responsibility in global equity markets.

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