Investing responsibly

Your pension is powerful. Let's invest it responsibly.

The world has you thinking your pension sits there, waiting for a rainy day. But that couldn’t be further from the truth.

Pensions are active. Pensions are invested on your behalf. And when invested properly they can help to make the world a better place. We’re committed to acting and investing responsibly for you, and by you we mean the Invested Generation.

We’re a modern mutual with purpose, dedicated to making sure your pension and your principles are in safe hands. We aim to grow your money, while also making a positive impact on our society and environment – to help you retire into a future worth living in.

Download our 'Investing responsibly with us' brochure (PDF 597KB) to get the details.

Cover of 'Investing responsibly'

How your pension can make a difference

At Royal London we are committed to be a Responsible Investor.

And that means looking at the bigger picture.

It’s about looking at Environmental, Social and Governance factors, or ‘ESG’ for short.

For example, we might look at a company’s position on environmental responsibility, cyber security, or boardroom diversity.

As part of this commitment, we’re asking all our asset managers to consider financially material ESG risks and opportunities when they make investment decisions.

And to be good stewards by voting and engaging with companies to improve the way they’re run.

We fully expect all asset managers who we choose to work with to be putting these principles into place.

To us, Responsible Investing isn’t about choosing values over value - it’s about managing risk, making better investment decisions, and generating better long-term results for our customers.

Welcome to the start of a new generation, the Invested Generation

Your pension is invested in the companies shaping the world’s future. It might be the most money any of us will ever have invested in our lifetimes so it’s only right it gets used to help make positive change.

We don’t have shareholders, but as a leading investor we are a shareholder in other companies. So, we can share our customers’ opinions and influence important policies all because of your pension. The bigger your shareholding, the more influence you can have, it’s as simple as that. This puts large pension companies, like us, in a strong position to make a difference on your behalf – from helping to drive the move to a low carbon economy to advocating for more diverse workforces.

When we say your pension is powerful, we mean it. We aren’t just talking about your future financial security, but as a way of championing for the world you want to live in. It’s all extremely exciting when you think about it. It’s what being part of the Invested Generation is all about. Wanting your investments to do well and to do good.

The difference is down to the decision-making

We know you care about making more responsible choices, which is why environmental, social and governance (ESG) factors are included in the investment decisions we make.

This is not the time to be passive, it’s the time to come together as the Invested Generation.

As the UK’s largest mutual insurance and pension provider, we’re committed to acting and investing responsibly. We choose the asset managers that look after your investments in a responsible way and ask them to consider environmental, social and governance issues in their decision-making.

We also aim to act on your behalf to influence and challenge the companies you own shares in, on issues such as CO2 emissions, modern slavery policies, and executive pay.

“Our ultimate goal is to use our position as shareholders or bondholders to have a positive influence on behaviour, because we think that is in the best long-term interests of our clients.”

Ashley Hamilton Claxton, Head of Responsible Investment, Royal London

Your money is making good things happen

We think the next decade will shape the world for generations to come, and we want you to be able to retire in a future worth living in.  But the effects of climate change put that in jeopardy.

That’s why we’re making some changes to the funds you’re likely to be invested in if you have a workplace pension with us.  We think these changes are good news, both for you and for the planet. And I’d like to explain why.

We believe that you can’t have a good standard of living in retirement if the effects of climate change mean that, for example, your home is at risk of flooding every few years or summers are so hot that you can’t go outside. We’ve already made a commitment to halve the carbon emissions of our investments by 2030 and to achieve Net Zero by 2050. Net Zero means that the amount of greenhouse gases produced by a company or -in our case - our investments - is balanced by the amount that’s removed from the atmosphere.

As part of our Net Zero commitment, we’re making changes to our workplace pension default fund. If you have a workplace pension through us, it’s where your pension savings are likely to be invested and is part of our Governed Range. All pension funds invest in a range of different assets, but typically this will include shares in different companies, called equities, loans to companies, called bonds, and property. The shares could be in anything from technology providers to pharmaceuticals companies.

We’ve now started investing less in those companies that emit the most carbon and more in companies that emit less. As a result, the carbon intensity on the largest portion of our Governed Range, which is equities, is reducing more than 10%. And we’re doing this at no extra cost to you, and without significantly changing the risk to you. Our customers have told us they care about where we invest their money. And so do we.

If you want to find out more, go to The power of your pension

If you’re invested in our Governed Range (where most of our pension customers are invested) you can feel assured that your investments are helping to tackle climate change.

Find out more

Climate change as a key issue

We work actively with the companies that we invest in. So we can influence their plans to reduce their carbon emissions and transition to a sustainable world in a way that considers the impact on society.

We’ve made climate change commitments to tackle and minimise the impacts of climate change, both through how we work as well as the investments we make.

Action we’ve already taken to help build a better future

We've collaborated with many companies to improve ESG factors

Learn more  about We've collaborated with many companies to improve ESG factors

We apply active governance to look after your money

Learn more  about We apply active governance to look after your money

Together for good

We're signatories to these climate initiatives:

Climate Action 100+ logo
Institutional Investor Group for Climate Change logo
Race to Zero logo

Shareholder Rights Directive II - (SRD II)

We invest £108bn* on behalf of our customers, of which around a third is invested in the shares of listed companies (equity investments).  The proportion of equity held in each investment strategy depends on the product. Our with profits products provides additional guarantees and smoothing, more detail on these products and their investment strategy can be found in the Principles and Practices of Financial Management.

We’re committed to being a responsible investor. This means that good stewardship is hugely important to us, as is choosing the right asset managers to make investment decisions on our behalf. You can find out more in our Responsible Investment policy and our Stewardship and Engagement policy.We work with our primary asset manager Royal London Asset Management (RLAM) to exercise our stewardship responsibilities. Read more about RLAM’s approach to Responsible Investment.

*as at 31 Dec 2020