Our 2022 AGM

Moderator – Kevin Parry:

I'm Kevin Parry. I'm the chairman of Royal London. And I'm delighted to invite you to the annual general meeting of the Royal London Mutual Insurance Society Limited. After the challenges of being unable to host our AGMs in person for the last couple of years, it's wonderful to see so many people here today. Thank you indeed for taking the time to attend. And as we are committed to ensuring our AGMs remain accessible, we're also hosting a hybrid meeting with members joining us online. So, hello to those you virtually, and thank you to you also for attending. I'd like to give people just a few more minutes to ensure they've successfully logged in. So, before we commence the formal business of the meeting, we're going to show a short video which brings to life the actions Royal London is taking to build a sustainable world. Thank you.

Video:

Many of us lack the means to support ourselves in retirement in the way we would like. The climate crisis is damaging the world we will live in. Our future standard of living is at risk. We can take action together. Our pensions have power. The climate crisis will define our generation and affect generations to come. We need to act together, and we need to act quickly. Your pension can make a big difference in the fight against climate change. Our standard of living is shaped by our finances and our environment. We all have an influence and responsibility. Our pensions have power. They can give us a financial and environmental return. We all need help to make confident financial choices. Royal London supports financial advisors, offers guidance, and works with charities to help people get back on their feet. We are responsible for managing billions of pounds of our customer's money. The companies we invest in can make a big difference in the fight against climate change. We actively work with them to influence their plans for the better. We are committed. Committed to achieving net zero across our investments by 2050. Committed to a 50% reduction by 2030. Committed to reducing the environmental impact of our own business to net zero by 2030. Being a mutual means, we think differently. We are here to serve you, our customers and we serve no one else. We don't pay shareholders. We use our profits to improve. And we also share them with eligible customers. Protecting today, investing in tomorrow. Together we are mutually responsible.

Moderator - Kevin Parry:

So, good morning. And for those joining while the video was playing, I'm Kevin Parry and I'm the chairman of Royal London, and I'd like to welcome you all to the annual general meeting of the Royal London mutual insurance society limited. I'm thrilled to have members joining us in person in London. I'm very much enjoying-, I will very much enjoy meeting with you and invite you to join me and the rest of the Board for light refreshments after the meeting. For those online, I regret we haven't yet found a way of making a cup of tea virtually, but maybe one day. If you experience any technical challenges, there's a chat function in the bottom-right of the screen, and we have people on hand to help. As is customary, I must confirm that there is no fire alarm planned today in this venue, so if the alarm does sound, please follow the Royal London team who are placed around the room, and they will make sure you are guided to the nearest fire exit. Shortly we'll provide you with an update on the progress of-, that Royal London has made over the last year and which you have the opportunity to put questions to the Board subsequently. Before we start with the formal presentations,

I would like to introduce the Directors who are here today. So, starting at the back row on my right, Kal Atwal. Kal is a member of the Risk and Capital committee and the Investment Committee. She was the founding Managing Director of Comparethemarket.com and has a keen interest in customer engagement and digital interactions. Next to her is Sally Bridgeland, chair of the With Profits committee and a member of our Risks and Capital committee. Sally is an experienced actuary with extensive financial services and pensions knowledge.

Mark Rennison, I'm almost blocking, is chair of the Risk and Capital committee and who also sits on the Audit Committee. Mark was Chief Financial Officer at Nationwide and formally a partner at Pricewaterhouse Coopers. He's a former member of the Prudential Regulation Authority Practitioner Panel and a form chair of the UK Finance and Financial Risk and Policy Committee.

Shirley Garrood who I am indeed blocking. Shirley is chair of Royal London Asset Management. She was Chief Financial Officer at Henderson Group and previously on the board of Hargreaves Lansdown.

Next to her is Jane Guyett who was formally-, who joined us-, joined this board in August last year and chairs our Remuneration Committee. Having held a number of senior roles with the Bank of America Merrill Lynch in London and New York. Jane brings knowledge of financial markets and vast experience of corporate governance in the UK as well as globally.

Tim Tookey who chairs our Audit Committee and sits on our Risk and Capital Committee is next to her. Tim is a very experienced Chief Financial Officer having held the position at Quilter, Friends Life and Lloyds Banking Group. And at the end on my left is Baroness Ruth Davidson, a member of the Remuneration Committee, who joined the board in June last year. Ruth has experience in the political front-line and is a committee champion of environmental, social and governance issues.

So, moving to the front row. On my right is Ian Dilks, the Senior Independent Director who chairs the Investment Committee and sits on the Audit and Remuneration Committee. Ian spent his career at Pricewaterhouse Coopers and was a partner there for over 25 years.

On my left is Barry O'Dwyer, our Group Chief Executive who you will be hearing more from shortly. Barry previously held senior positions at Standard Life and Prudential. And finally, to his left, Dan Cazeaux who is our Group Chief Financial Officer. He was formally a partner at KPMG where he led global client teams delivering audit services to the UK and global insurance companies.

We're committed to reflect on the diversity of our customers and the multicultural society in which we live across business and in the make-up of our board. I'm delighted to welcome our new Board Members as they bring an increasingly diverse set of skills, insights and opinions to our discussions. Finally, I would like to take this opportunity to acknowledge Tracey Graham who stepped down from the Board in March after serving nine years. The maximum tenure typically for an Independent, Non-Executive Director. During that time, Tracey made a significant contribution to Royal London, including chairing its Remuneration Committee and serving as a member of the Investment Committee and the Risk and Capital Committee. I would like to thank her for her service and commitment to the company, and I think the whole board wishes her well for her future elsewhere.

So, I'm able to declare that a quorum is present. The notice convening the meeting is being displayed on screen, and with the consent of the members present, I propose to take that as read, if that's acceptable. Thank you.

The voting today will be conducted by a poll. Every member or duly appointed proxy is entitled to one vote. If you are not a member or duly appointed proxy or duly appointed corporate representative, you are not entitled to vote on our resolutions.

For those joining us online via the AGM portal, you may vote throughout the meeting. And for our members in the room, please ensure you complete your voting card and pass it to the member of Royal London team at the end of the meeting.

So, voting is now open and will close just before the end of today's meeting.

Turning to today's business, I will reflect on the, the, role Royal London is playing in society, and I'll focus on continuing to deliver what is important for you our members. Barry will then speak about the progress we've made against our strategic objectives in 2021. We will then move onto questions and answers. I will then ask for final votes for those online before closing the voting and bringing our AGM to a close. The results of the vote will be available on the Royal London website later today.

During 2021, the Covid-19 pandemic continued to cause many challenges across the world. And there is no doubt it has and will continue to have a profound effect on the way we lead our lives. As we start to emerge from that pandemic, I hope that we can take the time to reflect on how as a society we have shown ourselves to be remarkably resilient and resourceful, demonstrating that through working together we can overcome global challenges and adversity. It has been Royal London's priority throughout this period to respond quickly to our customers’ needs, and when called upon to do what we can to help ease the impact on their lives. The hard work of our colleagues during this time has ensured we have continued to deliver strong service to our members, to customers and financial advisors. Our colleagues' commitment, while many have also been facing the same challenges of course has been exceptional. And on behalf of the board, I would like to take the time to thank them.

Like all businesses, we're continuing to adopt-, to adapt and evolve in a new environment. Earlier this year, we introduced a hybrid way of working, welcoming colleagues back to our offices, whilst also supporting working from home. Sadly, uncertainty continues across the world this year, with the geopolitical outlook more volatile than it has been for many decades. As we watch the tragedy of the war in Ukraine unfold, our thoughts go to those affected by this humanitarian crisis. On behalf of our customers, members and colleagues, we made a charitable donation £250,000 to the British Red Cross appeal in March to support their efforts with those who need it most. It is is more apparent now than ever how important it is that business takes positive action to support a thriving society at the same time as providing goods and services to their customers. And so, I believe mutuality is as relevant now as it was when Royal London was established in 1861. Our purpose, protecting today, investing in tomorrow, together we are mutually responsible, encapsulates this perfectly. We exist to benefit our members and customers over the long term, and at the same time, we believe we have an important role to play in the wider society in which we live and operate. We are focused on helping to build financial resilience, supporting society to move fairly to a sustainable world, and in doing so, protecting our customer's standard of living, now and in the future. And this is an area that Barry will expand on during his presentation. As you would expect, high on our agenda are environmental, social and governance issues, or ESG as it is now so often referred to.

I'm proud that Royal London has championed sustainability and responsible investment for over three decades. We recognise then as we do now the need to invest the capital, we manage responsibly in a way that influences the business we invest to adopt practices that deliver returns for our customers while having a positive impact on the world around us. This includes championing just transition, ensuring climate action supports an inclusive economy and avoids exacerbating existing injustices or creating new ones. As you will have seen in the video we played at the start of the meeting, during 2021, we announced our climate commitments. We've committed to reduce the carbon equivalent emissions in our investment portfolio by 50 % by 2030 and to achieve net zero by 2050. We have also committed to reduce our direct operational emissions to net zero by 2030. And I am delighted to report, we have already made excellent progress towards that aim during this year. As an example, we reduced the amount of paper we use by 220 tonnes in 2021, by introducing a number of initiatives including adding QR codes to our mailings, allowing customers online access to much of the literature we would have normally printed. In addition, across our offices, 99 % of the electricity we use is now from renewable sources. These efforts contributed to a reduction in our direct carbon emissions of 68 % allowing us to take a big step towards achieving our 2030 goal. We also recognise we can play an important role in creating a fairer, more compassionate society. With so many people facing up to a cost-of-living crisis, access to support and financial guidance is needed more than ever. In line with our purpose last year, we committed over £1 million to charitable and social impact initiatives aimed at enabling thousands of people to build their financial resilience.

Our Changemakers programme provides funds and supports social enterprises who are developing ideas and pioneering innovative solutions that build financial resilience and enable a just transition to net zero. In 2020 we announced our flagship partnership with national charity Turn2us. We want to help people help themselves. And the work of Turn2us is aimed at supporting individuals and their families facing financial crisis, providing access to vital help and information. Over the course of 2020 and 2021, Royal London has donated over £430,000 to Turn2us to help ensure over 80,000 people could access their services when they needed them most.

Now before I hand over to Barry, I would like to spend a few moments focusing on ProfitShare, which is a unique benefit we offer, and a benefit we can only offer because we are a mutual. ProfitShare allows us to do just that, share Royal London's success with eligible customers by boosting their savings. This year we maintained our allocation rates and as a result of growth and the number of members, an aggregated value of eligible policies, the total ProfitShare payout increased by nearly 16 % to £169 million. Since 2007 when ProfitShare was introduced, we have shared £1.2 billion with eligible customers. That is something we are really very proud of. So, let me pause there and invite Barry O'Dwyer to talk to you about the progress Royal London is making against our strategic objectives. Barry.

Moderator - Barry O’Dwyer:

Thank you, Kevin, and good morning, everybody. This is my third AGM since being appointed as your Chief Executive. But due to the pandemic it's the first that, that I've been able to attend in person. So, like Kevin, I am delighted to be here with you today and I'm very much looking forward to chatting with you afterwards. Royal London is your business. We exist to serve our customers and members and that influences the decisions that we make every day. As the UK's largest life pensions and investment mutual, we are firmly committed to our mutual status. Mutuality is a relevant and much needed concept. And it's a concept I've been championing loudly since I joined. Like everyone at Royal London, I'm focused on delivering long-term value for our members and customers, and our mutual status allows us to take decisions over the long term with your interests in mind. I'm extremely grateful to be leading a team of people who are driven by making a positive difference for customers, their families and for wider society. The commitment and passion of our people to constantly improve our offering for customers and for financial advisors is the reason we continue to be recognised through key industry awards in the UK and Ireland for the service, products, and fund performance we deliver to you. Before I move onto talking about our strategic progress and our 2021 financial results, I'd like to share with you a few numbers which highlight our-, highlight a core element of our purpose, protecting today. During 2021, we received over 100,000 calls in relation to bereavements. We paid out protection claims of £632 million, helping over 84,000 customers in the UK and Ireland. This is just one example of why I'm proud that we're here for our customers and their families at times of worry. Whilst we cannot take away the impact of falling ill or the loss of a loved one, we can play a part in easing the burden.

Our strategy is to be an insight-led modern mutual growing sustainably by deepening customer relationships. Over the long term, society is facing a challenging predicament. Our population is ageing and responsibility for funding later life has largely moved away from government and employers to us as individuals. As a result, many people may not have sufficient funds to enjoy the retirement that they would like, unless they take action. People need support in responding to this challenge. Our aim is to help customers save for the future and to protect them and their families in terms of ill health or bereavement, assisting them along the way to make confident financial decisions. We are strong advocates for impartial financial advice and the benefits it provides. We work in partnership with thousands of independent financial advisors, and we're increasingly using technology to scale the provision of advice and make it more accessible. In May of last year, we acquired Wealth Wizards, a digital advice business. Now, Wealth Wizards provides market-leading technology to help make the provision of advice easier and more efficient. And the acquisition presents us with range of new opportunities to help address what's called the UK financial advice gap, which is the gap between the number of people who would benefit from advice, and the number of people who currently receive it. We also launched a number of new products improving our customer offering. This included an annuity proposition for existing customers who benefit from a guaranteed annuity rate. And Investment Pathways, a range of solutions aimed at non-advised customers who are moving their pension into income release. And in July 2021, we purchased a 30% stake in Responsible Group, the later life lending and product specialist, building our profile in the growing equity release market.

We believe that later life lending such as through equity release will increasingly become a core part of financial planning. In order for us to better understand and serve our customers, we need to continue to enhance our digital capabilities. Doing so will ensure that we deliver the best possible customer experience at scale. We also want to get better at using the data that customers share with us to offer help at the times that customers need it. Improvements will be delivered for all customers, not just new customers. Over the last couple of years, we have migrated 3.2 million long-standing customers onto our newer technology, improving their customer experience. And during 2021, we successfully consolidated four with profit funds which were closed to new business, into the Royal London main fund, thereby uplifting policy values for all eligible customers. These initiatives also have the benefit of simplifying our business and modernising our infrastructure which reduces costs and so benefits all of our members. While we recognise that impartial advice is the gold standard, we also recognise that the associated costs can be prohibitive for some customers. So, we want to ensure that our customers have access to low-cost, relevant information and guidance. We recently launched our Financial Wellbeing Hub, helping customers to feel informed and confident about the decisions they make with their money. And through our charitable partnerships like Turn2us, we support people who are struggling to navigate difficult times. As well as financial health, our customers can also sometimes need assistance with their mental and physical health too, particularly at the time of a claim. And this is why we offer our Helping Hand service which provides many of our customers with access to valuable support including a dedicated nurse and personalised plan based on their needs.

And this year we're introducing a wellbeing service to ensure customers are able to seek help from early medical care services at a time they need it most. At the same time as focusing on financial resilience, we cannot and must no take our eyes off the climate crisis. It remains one, if not the most, significant threats we face. If we're to avert this crisis for ourselves in later life and for generations to come, it will require collective effort on a scale not seen before. And as you've heard, we've committed to taking the necessary steps to reduce emissions from our operations and from our investment portfolios. We've made good progress in improving the carbon footprint of our investment portfolios during 2021. We made changes to £23 billion of indexed equities in our popular Governed Range, which is the default fund that many of our workplace pensions customers are invested in, reducing the carbon intensity by 16% by the end of the year. But we know we have much more to do. However, it's clear we all have to step up to effect change. This means governments, business and broader society all taking responsibility. We're committed to playing our part in meeting this challenge. We are custodians as you know of substantial funds, and they can play a significant part in influencing how we all move fairly to a sustainable world. And this is because investing is much more than just about generating returns. By actively engaging with the companies in which we invest, we can encourage good governance and corporate sustainability. This means we can influence on critical issues such as climate change, at the same time as protecting and growing the money we manage on behalf of our customers. It's why ensuring customers understand the power of their pensions has been a priority for us this year.

Our Invested Generation campaign, which has been running since September of last year, highlighted our responsible investment approach and the impact customers can have on the planet and wider societal issues through how they choose to invest their pension. And I couldn't talk about climate change and not mention COP26, the UN climate change conference in Glasgow last October. This was a seminal moment bringing into sharp focus the need for action now. I, along with a number of my colleagues from Royal London, attended and presented at events. Using our position and mutual voice to engage with key decision makers and making the case for change. Now, before I talk about our 2021 financial performance, I'd like to touch on our sponsorship partnerships through activity focused on levelling the playing field. As well as becoming a global partner to the Lions rugby series last summer, we became the first ever principal partner of the women's Lions programme. Funding and participating in a feasibility study to establish a women's Lions team, our aim is to continue to raise awareness of this initiative and women's rugby more widely. And through our partnership with the England and Wales Cricket Board, we've continued to champion the development of both the men's and women's game nationwide. We also support the cricket chair African Caribbean Engagement and its efforts to address the 75% decline of professional cricket participation by black British players in recent years. Our funding has helped to expand their work beyond London and Birmingham to a third UK city, Bristol. These are important initiatives which allow us to play our part in making a positive difference whilst reflecting our values.

Now turning to our performance during 2021. 2021 was a good year for Royal London. Sales and profits were both up on 2020 as we began to emerge from the pandemic. Our operating profit before tax was £133 million, up from £41 million in 2020. While trading in some areas of the group was affected by the ongoing impact of Covid-19, there were also many positive indicators of continued recovery. Our life and pensions, new business sales increased by 12% to £9.6 billion as we continued to benefit from strong financial advisor support for our protection range in the UK and Ireland, and growth and demand for UK pensions, particularly in workplace pensions. Royal London Asset Management which manages the funds for our customers and for external clients performed well, with assets under management increasing to a record £164 billion, passing the £150 milestone for the first time. This was supported by very strong investment performance with 99% of our actively managed funds outperforming the benchmark over three years. And of course, that benefits our customers' and clients' investments and policy values. Our capital position remains robust with many of our key metrics improving across the year. And this allows us to focus on opportunities to improve our services to members, improve our products and systems to deliver better outcomes. And the Chairman has highlighted already, our robust capital position has also allowed us to share £169 million with eligible customers through our ProfitShare scheme.

On behalf of our customers and members, Royal London will continue to play an important role in how society moves fairly towards a sustainable world. Enabled by our robust capital positions and long-term approach to decision making, we will continue to work in partnership with financial partners and our social impact partners in the UK and Ireland, to build financial resilience for millions people. And we will leverage our position as one of the UK's largest asset managers to tackle some of society's biggest challenges such as climate change. Driven by our purpose, we will use our mutuality for good. Our customers and members are in safe hands. Thank you.

Moderator – Kevin Parry:

Thank you, Barry. As we see in the news every day, uncertainty is a constant. However, on behalf of our members and customers, we remain focused on adapting to the events happening across the world. And we are committed to holding to account the companies in which we invest, to influence the change needed.

Moderator - Kevin Parry:

So, at this point, I'm delighted to open up the meeting to questions from our members. Before we move on, we'll put the resolutions, but let’s start with the questions. And I can see there's a lady there. I'm going to just take one online first just to check it's working if I, if that's okay? So, I think there's one coming from the back, I'm being told, that is online. And John is going up to get it now. So, just while he's doing that, if you're joining virtually, you'll be able to submit your question by typing it into the chat option at the bottom right-hand side of the screen, and John Odada our company secretary will pose the question on your behalf. So, I think John has arrived. And John, have you got the first question? Maybe not.

Moderator – John Odada:

Thank you chair. We've received a question from a member online, and this is the question. I notice there eleven people stated as Directors of the company. Is there a need or requirement for eleven Directors?

Moderator - Kevin Parry:

Okay. So, the question is, we've got eleven Directors. Is the requirement to have that? The, the, the size of the board is really determined by several factors. First, first of all, we need to have enough directors to govern the size of our group well. Insurance companies are actually particular complex in that regard in that we have more committees by law and by regulation than other companies have. So, in addition to the normal company committees of an audit committee, remuneration committee and risk committee, we've also got the nominations committee, we have a with profits committee, we've got regulated subsidiaries, all of which add to the amount of work that needs to be undertaken. So, that, to some extent, determines the size of the board. Secondly, as I mentioned earlier, we're very keen that we've got a diverse and inclusive board. That's diversity in its wider sense, so it's cognitive diversity as well as racial diversity, gender diversity. And that to some extent also drives the size of the Board. And thirdly there is just the importance of making sure that the Board works well together, and we've got constructive attitude coming from all of the directors. So, we've landed currently on the size of eleven. There's nothing particularly special about that. I wouldn't have strong views if it was slightly bigger or slightly smaller, but for us it seems to work well at the moment. So, having taken one from-, that came online, is there a question in the room? Yes, the lady in the third row please. If you wouldn't mind just introducing yourself.

F: My name is Madeline Stock. I'm 85 years old and I have been saving with Royal London for nearly 70 years. Can you now explain to me why the £83,000 I saved up for my later care life has gone missing from my account?

Moderator – Kevin Parry:

Right, that is a very personal question so I'm not going to take that question in an open forum, but we have people outside that will be very happy to address that. It's obviously a very important question for us to address for you and we will do that immediately after the meeting. So, thank you for that question. Yes, gentleman in the front.

M: Thank you very much. Thank you, my name is Robert Harrop. I'm a pension fund holder myself. I'm the director of a Buddhist organisation, SGIUK and all our staff are also pension fund holders. This is a, a policy question. I was disturbed to understand that pension funds in your default fund are invested in companies that produce nuclear weapons. Given the recent developments in international law, so the treaty on the prohibition of nuclear weapons entered into force. It was ratified in January 2021. The, it, it's not sufficient for exclusions on nuclear weapons to be restricted just to ethical funds. The-, I'm very impressed by the line of Royal London 'We're committed to acting and investing responsibly.' And presumably responsible, responsibly means morally and ethically as well. I had an answer from Mr Odada who told me 'Our policy is no Royal London fund will knowing invest in corporate equity and/or debt, of companies involved in the manufacture and sale of certain weapons ammunitions.' And he mentioned cluster munitions, anti-personnel landmines, and biological and chemical weapons. ' This policy is reviewed periodically at least once a year to determine if any changes are required to maintain alignment with UK and international law. Our values as a purpose led organisation and our customers’ needs and expectations.' He then said, 'We do not currently exclude investment in companies engaged in the manufacture and/or sale of nuclear weapons and we do not support calls to do so at this time.'

So there are many questions that arise out of this. Please will you consider, in light of international law, the treaty on the prohibition of nuclear weapons, the default funds should not invest in the manufacture or support of nuclear weapons. And please will you consider the contradiction that you will not knowingly invest in cluster munitions, anti-personnel landmines and biological and chemical weapons against the, the, the contradictory position of happily investing in companies that invest in nuclear weapons. It is a bizarre and immoral and unethical contradiction. Thank you.

Moderator – Kevin Parry:

Thank you, thank you for that question and I should add that that question has also been submitted via certain members of the Methodist Church as well. So it's not just from the Buddhist faith group. So it's a, it's a very important and complex question and the board does consider this and has indeed considered that, as you acknowledged, in the last twelve months and we do look at this regularly. The position that we take is driven by the nuclear non-proliferation treaty of the United Nations. The vast majority of countries in the world are not entitled to have nuclear weapons. Over 190 countries are in that situation. The permanent members of the security council, of which Britain is one, is entitled to have nuclear weapons and that is part of the position that has been taken in terms of keeping the balance of power in the world. It is therefore a very complex question because we are obviously a member of the security council, a permanent member of the security council. We could reflect on the, the issues that have come to light in the light of Ukraine and the threats that have come from certain members of the Russian government, in terms of the use of nuclear weapons over the last few months. We believe that we should support international law. We should support the law as it is in this country and we should support the policy of the government and it doesn't particularly change in terms of which, which particular party is in power in this, in this country. And that position is that Britain does have nuclear weapons and that we do maintain that as part of the security council's position in terms of world security, and it for that reason that we have not decided that it is right to exclude those nuclear weapons. I fully acknowledge there are different views but that is the view we have reached as we believe that is responsible for our particular situation in the, in the UK. In terms of other weapons, such as cluster bombs, such as biological and chemical warfare, those are obviously illegal and it's for that reason that we do not invest in any company that might manufacture those.

I should add that if we were ever to discover, which I think is very unlikely, that any company that we invested was selling nuclear weapons to a country that is not entitled to have them, we would have a different view. But that is not the case to the best of our knowledge. So, it is carefully considered. I know it's, sir, it's not exactly your view but you know you're obviously entitled to different view but that, that is the view that we've, we've reached. Can I take another question? Yes, the gentleman in the right this time.

M: Good morning, I'd like to congratulate the Board on the diversity. The other thing is corporate governance. What plans are in place to replace the Director, who we are voting on today, who has already done eight years, I mean will he be replaced before the next AGM or what?

Moderator – Kevin Parry:

Thank you. So, so the question is around the succession of directors and there is a general view that best practice is that a director should not serve more than nine years on, on the Board and we keep that under active management. So, Ian is in-, and Sally are both coming up to the eight-year mark and we are already looking for suitable candidates to replace them. So, in the case of Ian, he, he chairs the Investment Committee as well as being the SID so we need to have somebody with strong investment expertise that case take that forward. In the case of Sally, who is an actuary, a very senior actuary, also in terms of very relevant no doubt, to a lot of people in the room, knowledge around the Profits Committee. Now in doing that I'm also looking to keep other balance in the Board. So, as it happens one male one female. So, that would be ideal that we, we, we swap that over so that process starts probably more than a year ahead because finding the people with the right skill set, who are available and sometimes have to give up positions elsewhere. That takes some time, so you can rest assured that succession is very actively managed by, by me as chairman of the Nominations Committee.

M: I noticed on page 70 and 72 of the annual report. Some directors, what is the new expression, over-boarding. What's the position of the Board on that?

Moderator – Kevin Parry:

Yes, so the question is, are, are directors doing too much elsewhere? And that's known as over-boarding in the, in the, in, in, in colloquial speak. So, we also have a review every year lead by the Company Secretary in terms of time commitment and to make sure that people have sufficient time to undertake their duties for Royal London. It's also reviewed by our two regulators, the PRA and the FCA to make sure that we have not just the right skills to do it but also enough time to do it. And of course, there's a practical matter we can all observe and there is almost negligible non-attendance of board meetings, and I would add also, just preparation of those from all of my colleagues. So, yes that is also monitored very carefully to make sure that people aren't taking on too much and would have insufficient time for us.

M: Finally, earlier on in the year there was the-, I wouldn't say a problem, but LV and Royal London were apparently going to merge or you were going to take over LV. I don't suppose you can give us any enlightenment on that?

Moderator – Kevin Parry:

I'm happy to. So, the question is, I guess along the lines of we didn't merge with, with LV although we actively were looking to do so. I'll be very clear with you, it's a matter of regret that did not happen. I think there was a huge opportunity for two large mutuals to come together and create a stronger organisation for the benefit of all customers. That didn't come about. First of all, the board of LV put a vote to its members seeking permission to sell the company to a private equity group. That was voted down by their members and so that didn't come to pass, to pass. We continued having discussions with LV and the Chief Executive and I met with-, met virtually actually on video, with the incoming chairman of LV, the interim chairman and he said that the position of that Board had changed. Instead of wanting to sell it to a private equity they decided to stay as a standalone business, and he declined to have further discussion with us. So, that brought the discussion to a head. Our door remains open, and I still think the merits of that potential merger remain compelling to my mind. So thank you for that question.

M: Thank you.

Moderator – Kevin Parry:

Yes, and the lady on the left-hand side. He's coming the other way.

F: Hello, my name's Margaret Mason and I joined Royal London because I appreciated the mutuality and it was probably the most ethical fund that I could-, that my financial advisor could help me find while noting what previous questions have said. But I noted that Royal London abstained on a key vote at the 2022 Shell AGM, but I also noted in the Royal London annual report and accounts, in fact on page 39, that the climate change performance metrics for portfolio emissions do not include scope three greenhouse gas emissions. That is from the burning of the oil and gas. Now for those who aren't familiar with it, there are upstream scope three emissions and downstream GHG emissions and the upstream ones will be the operations of say for example, the gas field, the gas well and their suppliers. The, the downstream opens being the use of the oil or gas and it's very clear that scope three, downstream scope three GHG emissions are significantly larger than those from operations at an oil or gas well and that Shell are committing to investing new extraction at a time when the international energy agency have said no new oil, gas or coal extraction developments can be made if global temperature rise is to be kept below 1.5 degrees. And I, I might add here that you can’t rely on the Oil and Gas Authority, now renamed as the North Sea Transitions Authority, to look after this for you because they do not consider the downstream Global Greenhouse Gas emissions when they do their IESs, their EIAs, their Environmental Impact Assessments. Hence the recent jackdaw decision probably. So, the way you've described it, you are reducing your portfolio emissions by 2030 by a certain amount is, is perhaps a little bit economical with, with the truth, that sounds a bit harsh, but it isn't all your portfolio emissions it's only the much lower operational emissions. So, can the chairman tell me how and when a decision to withdraw the groups investments from Shell will be made given that the major portfolio emissions from those holdings are not currently part of the groups performance assessment? So, how will that decision-, and when will that decision be made? Thank you.

Moderator – Kevin Parry:

Thank you very much. So, two specific questions around Shell. One, one around the vote and one about whether we should withdraw from investing in Shell, and secondly a more general question about the oil industry I think in terms of emissions from their own use and the emissions that they create as a result of people using the oil and gas. I'm going to pass it over to Dan because Dan has got regulatory responsibility for environmental matters and Dan, do you want to take the, the first Shell question first as to the vote.

Moderator – Dan Cazeaux:

Certainly, thank you, Chairman, and thank you for your question. I mean, I, I think in, in your question you, you set out some of the challenges that we have in measuring and, and monitoring the, the climate plans of oil and gas companies given the complexity of their operations and the upstream and downstream effects. In the context of Shell in particular and the, the vote that was recently made, as Barry talked about earlier, we, we engage actively with a wide range of companies and in particular with the oil and gas sector and we continue to do that with Shell over the course of the last year and we continue to do this year. As part of our decision making process and, and the vote that all of us on management made to abstain, we considered the progress that they have made on their climate plans but we did not feel that they had made sufficient-, or yet made sufficient progress to align their plans to the Paris agreement and the one and a half degrees reduction and in particular we noted their ongoing commitment to new exploration and extraction within that. And therefore, as a result whilst we were encouraged by the progress they were making we did not feel we were in a position to, to support that vote and that was our rationale behind the abstention but we will continue to engage with Shell throughout.

Moderator – Kevin Parry:

Before I come back to Dan in terms of the specific of whether we should withdraw from Shell, I just want to say a word or two if I could around divestment of investments. If, if we divest a, an investment of any company and I'm not going to make this particularly around oil and gas, that company still exists. So we don't own it but somebody else does. We therefore reach the conclusions a much more sophisticated approach, is to work with the companies, to work with the directors. That we can do if we own part of them because we engage with them and frankly they need to listen to us and talk to us and work with us and so, the approach we have is a constructive approach with all companies around this and indeed other matters that we own, with a view to ensuring that they are moving in the right direction. If we were to divest them, which we would do in extreme circumstances if we were not getting traction, if they were not listening. If we divest them we no longer have any influence over them and we believe that the ethical stance that we take as a corporate is more powerful if we engage rather than we just let other people do it and it might be owned by, you know, who else in the world.

F: May I come back on that?

Moderator – Kevin Parry:

Yes, of course you can, yes.

F: I have to say I'm not confident that the necessary urgency is fully understood by the board given what you say because there has been very little progress in that Shell are still committing to invest in new. So, they are not listening to you and even from fiduciary point of view, the time will come when pension funds and small investors will be left with a stranded asset and as we saw the, the HSBC recent comments. They're quite happy with the six- or seven-year turnaround on their investments and some people will be, will be okay, thank you very much. So I'm very very worried about the level of understanding and urgency within the board and whether it really matches the science.

Moderator – Kevin Parry:

Yes, well again a fair point you make in terms of the speed at which change happens and that is an important part of the engagement, and as Dan said we were not convinced enough was being done in this particular case and so-, they were not doing nothing we didn't vote against or little but we thought they could potentially go faster and so that was the reason for the abstention there to your very point. Clearly, different companies are moving at different speed and we do think we have used our influence to accelerate that in, in, in a number of cases so we are absolutely, absolutely aware of the need to move at pace and it is an important part of, f the discussions but be in no doubt that is very much front of mind when our team, and it's a big team, engages with, with corporates.

F: Just as a final, I on that basis will be abstaining on Royal London's annual accounts and I will be considering whether or not to withdraw my investments.

Moderator – Kevin Parry:

Okay, thank you, noted. Dan, can I come to you on, on the middle question that was posed in terms of upstream and downstream and the extent to which particularly the downstream element is taken into account when assessing Level three emissions.

Moderator – Dan Cazeaux:

Yes, so I think within the annual report, and you quite rightly call out what our disclosures currently cover, and I think we along with all other asset owners are grappling with the quality of information that exists in the public domain from companies that we currently invest in and from the different data sources that exist. So, you're quite correct in the, the majority of our disclosure as they stand at the moment are focused on scope one and scope two emissions and it we can't cover the entirety of our portfolio at the moment based on the data that is available. We are continuing to push for more data and part of the engagement that we have with companies is, for them to expand their own disclosures and give us more data to work with but I fully acknowledge the challenge and, and we are pushing as hard as we can to get further data. I don't think that is a quick process. I think the role that regulators and government has in that process to enforce greater disclosure and greater quality of information is also a key step and we are engaging with policy makers in that regard as well.

Moderator – Kevin Parry:

I'll pick up one final comment, which is another important point you made in terms of, you know, could, could our investors end up with stranded assets. That we've got things that nobody else wants to own. Also, acutely aware of that point and we were or indeed are one, one of the leading companies in terms of what we call tilting away from carbon. So, we're very keen to make sure we still give you the best returns that we think are achievable whilst finding portfolios that are slightly less carbon and carbon equivalent heavy than other companies might be and we-, we've taken the lead in terms of that policy. Now that will evolve of course, over time as, as the years go by and so we believe that we have that covered. Not just in respect of equities but also in respect of bonds and bonds are much bigger investments in aggregate than equities in this world. So, your point is well made and understood, thank you. Can I take another question? I can not see any online. There's somebody at the back who will wave at me if the technology isn't working for any reason, but I think we have nothing online. Is there anything else in the-, there is one online. I think.

Moderator – John Odada:

Chair, we don't currently have any questions online.

Moderator – Kevin Parry:

Alright no more questions online. And there's a gentleman in the middle on my left.

Hello, Paul Rencan, VSA Capital also a member. Can you give us some further colour on how Royal London as a business and an employer, is adapting under Covid-19, Brexit, and climate change as far as staffing changes? As far as utilisation of staff and facilities and that sort of thing?

Moderator – Kevin Parry:

We can and I think that's definitely one for you Barry.

Moderator – Barry O’Dwyer:

Well thank you for the question. It has been a priority for us through Covid-19, obviously looking after customers and I mention the, the number of bereavements calls that we've taken but obviously we've been acutely conscious that very often these bereavement calls are taken by colleagues of ours who are working in extraordinary circumstances at home. So, we did make the colleague wellbeing a focus of our people's strategy over the course of the pandemic and the feedback from colleagues has been very supportive. We've, we've put in place some extra support to help colleagues with their mental health through the pandemic and we have been encouraging our managers across the organisation to maintain as much contact as possible through remote working. Now since the-, things have changed relatively, more back to normal, we've been encouraging hybrid working, so we're not going back to working five days a week from the office for most colleagues we've-, that means working about half of their time in the office and half of the time working from home, and we've obviously put in place the, the technology support in order to make that happen and to make sure that it's, it's secure for our customers. So, we've just actually completed a survey of, of our colleague base to, to see what their reaction was to the introduction of hybrid working and it has been very, very positive. So, we scored something like four point two out of five in a colleague survey about their support for the way that Royal London has embraced hybrid working. So, we're not perfect, and no organisation is, but I think we have handled I think, the colleague impact through the pandemic as well as we could have.

M: Does that make a change with facilities use as well?

Moderator – Kevin Parry:

Just making sure everybody heard that, the question was, does that make a change to the facilities use at the, the, the offices we work at?

Moderator - Barry O’Dwyer:

Yes, there has been a change because obviously we have fewer people coming into the office on any one day. If, if half of colleagues are spending their time in our buildings and we keep our facilities use under review at all, at all times. It hasn't meant that we've made any major changes since, since the impact of the pandemic but I think we're all in a situation now where we're learning how the patterns of work will, will change over the next couple of years and that may have an impact on the facilities that we use.

Moderator – Kevin Parry:

Any further questions in the room? Yes, gentleman in the middle on the right. Let's get a microphone, it's coming to you from behind.

M: Thank you very much. My name is Peter Elliot. I'd like to ask a question about your auditors. How long have they been in position? Are there any plans to replace them and if they are to be replaced are they allowed to tender for a continuation? Does the fact that various members of the board have had previous experience with your accountants have any affect on the decision to appoint them or to extend their duration?

Moderator – Kevin Parry:

Thank you, so, important role that the auditors play in terms of comfort on our financial statements and I'm going to pass that over to Tim Tookey, who chairs the audit committee.

Moderator - Tim Tookey:

Thank you for that question. The time of your question is actually quite pertinent because our current auditors PwC will become time barred at the completion of the 2023 audit. So, to your specific point they will not be permitted under current rules to re-tender for the audit and as we disclosed at the annual report, we will undertake a tender of appropriately qualified and skilled firms to replace PwC. That process is being lead on behalf of the board by the audit committee and we would expect later this year, to make a recommendation from the audit committee to the board for a replacement set of auditors who will undertake the 2024 audit as their, as their first audit assignment. So, PwC will not be able to re-tender for that and we will be looking for independent firms who can undertake the work going forward. As part of our work to ensure that process only looks at independent firms, firms that are participating in the tender will not be able to undertake so called, non-permitted services during the period of the tender or indeed after it for the successful firm throughout the period of their, their appointment. To your, one of your specific questions Mr Elliot, I can assure you that the process will be independent and will not be influenced in any way by members of the board who have been previously working for audit firms, in fact the, the point is less relevant perhaps because two of our members have previously served with PwC who cannot participate in the tender in any event, but I can assure you it will be independent and robust and the process will be described in next years audit committee report that will be part of the ARA. Thank you.

Moderator – Kevin Parry:

Thank you. There is a question online.

Moderator – John Odada:

 Thank you Chair. Question from the member is as follows, how are you considering diversity and inclusion across the group and do you intent to enhance disclosures around ethnicity, racial breakdown, pay gap data et cetera?

Moderator – Kevin Parry:

Fine, so a wider question than I thought, so I'm going to pass it to the Chief Exec.

Moderator – Barry O’Dwyer:

Yeah, this is, this is a priority. It's one of our two people priorities is to increase our diversity and ensure that, that Royal London remains an inclusive place to work. We do have internal targets that, well we have obviously we've signed up to the Women and Finance charter, so we have an external target there that we, we disclose in the annual report and accounts, but we also adopt internal targets around the improvement of our diversity. Particularly in senior roles across the organisation and again, like many companies, we are, we are putting a lot of work into this. It's not going as fast as I or my team would like but it is a priority for us and, and we continue to hold ourselves to account to, to, to stringent targets. In answer to the question about racial diversity and whether we will publish externally targets that we want to achieve there, that will be something that the board would consider over time. We don't currently do that, but it is, is something that is probably going to become a little more common and it will be something that the, the board will keep under review.

Moderator – Kevin Parry:

Thank you. Nothing online showing, anything in the room? So, if not, in a, in a few seconds we will close the voting on the resolutions so, for those of you in the room, if you would hold up one of your voting cards in a minute and one of the Royal London team will come and collect it from you. As a reminder the results of the voting will be published on our website so please hold your cards up now if you haven't already handed them in and I will just give the last few minutes. I see one or two people have got a pen in their hand, to finish the voting. Can't see anybody writing anymore so I can confirm that the voting has now closed. As we conclude the meeting, could, could I think you, however you have attended this meeting today, for attending thank you very much indeed and also thanks to those who have made the logistics possible. It's the first time that we've held a hybrid meeting and I'm pleased to say the technology didn't seem to let us down. So, with that being the case I think I can draw the meeting to a conclusion. I hope to see many of you here in a year’s time. I appreciate your support and I'd also like to thank the fellow board members here today for attending. It's an important part for us. It's important that we hear directly from our members, and it is, I think, particularly important in, in the mutual. Some of the matters that have been raised will continue to be on the board agenda, probably all of them matters will continue to be on the board agenda in the year ahead and we'll continue to keep our positions under review. So, without further a-do thank you for attending today and please do join us in the room next door for some light refreshments. That concludes this years AGM. Thank you very much indeed.