How we invest responsibly
Our approach includes the following four areas:
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Engagement
Taking money out of or excluding companies that don't meet certain criteria around environmental, social and governance (ESG) issues may seem simple. However, this would mean we're unable to take action to influence change. We believe in engaging with these companies to support them to improve their corporate behaviour and encourage change.
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Voting
We use our voting rights on a range of issues. This includes voting on matters such as how companies are run (often referred to as governance), their impact on climate change, board appointments, changes to a company’s structure, pay and compensation, and mergers and acquisitions.
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ESG integration
We expect all the asset managers who manage your investments to consider environmental, social and governance factors in their investment decision-making process.
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Collaboration
We collaborate with policymakers, the companies we invest in, industry groups and other stakeholders on key issues such as climate change to support meaningful regulatory and industry change.
Responsible investment and your investments –
how we put our approach into practice
We work closely with the asset managers managing your investments, including Royal London Asset Management, which manages most of our customers' investments, to embed responsible investment. As a minimum, we ask all our asset managers to consider ESG factors in their investment decision-making.
Our RLMIS Responsible Investment and Stewardship Policy (PDF) and Voting Principles (PDF) cover how we hold ourselves and our external asset managers accountable to the standards set out in the Group-wide Royal London Responsible Investment and Stewardship Policy. Royal London Asset Management's Responsible Investment and Stewardship Statement (PDF) and Voting Guidelines (PDF) are part of our Group-wide policy.
The ready-made portfolios in our Governed Range, where many of our customers are invested, incorporate our responsible investment approach. If you're looking for a particular outcome from your investment choice, always check the factsheet to make sure it will meet your needs. If you're still not sure if it's right for you, think about speaking to a financial adviser.
If you want to align your investments with specific values or beliefs, we have a range of sustainable funds that look to invest in companies which contribute to our society and the environment. There are six funds to choose from, ranging from a lower risk fund that exclusively holds fixed interest investments such as bonds, to funds investing 100% in equities (stocks and shares) for customers who are comfortable taking a higher level of risk.
These funds won't invest in companies involved in activities that could be detrimental to the environment or society - such as weapons and tobacco manufacturing, nuclear power generation, exploration and production of fossil fuel, and animal testing, other than for purposes of human/animal health.
Remember that the value of all investments can go down as well as up, and you may get back less than you paid in.
Think about getting financial advice
Investing can be a complex area. If you're unsure where to invest, you should think about getting financial advice. Using a professional financial adviser can be reassuring when making important decisions about your money.
Climate change as a key issue
In June 2021, we announced our commitment to achieve net zero across our investment portfolio by 2050 and to halve emissions from it by 2030. Our climate commitments are based on the expectation that governments and policymakers will deliver on their commitments to achieve the goals of the Paris Agreement and that the required actions don't go against our legal and regulatory obligations to our members, customers and clients.
Fossil fuels – like coal, oil and natural gas – release large amounts of greenhouse gases when produced and burned. You can learn more about our investment approach to fossil fuels in our Fossil Fuel Investments Position (PDF).