Our climate commitments
To play our part in moving fairly to a sustainable world, we’re committed to reducing our portfolios and operational emissions, exerting our influence through engagement and developing climate-aware investment solutions.
There’s £3 trillion invested in UK pensions1. We want to help unlock the power of the money your clients have invested with us by aiming to use our influence to support a fair transition to a low-carbon economy, and by continuing to help all of our customers build their financial resilience.
How we plan to make a positive difference
We believe that the best future for our customers – your clients - is one where, collectively, we achieve the goals of the Paris Agreement2, and it’s this which helps define the actions we’re planning to take. We’re committed to:
- Reducing emissions from our investment portfolio by 50% by 2030 from a baseline of 2020, and achieving net zero by 2050 – find out more below. We also aim to achieve net zero emissions in our property assets which are managed directly by Royal London Asset Management by 2030 and those which are managed indirectly by 2040.
- Achieving net zero operational emissions by 2030, and in our non-investment value chain by 2050. Read more about our operational emissions commitments.
- Developing climate-aware investment solutions that will help your clients invest in the low-carbon transition.
- Engaging with policymakers, the companies we invest in, our peers and other stakeholders to advocate on climate-related issues.
Our commitments are based on the expectation that governments and policymakers will deliver on the commitments to achieve the goals of the Paris Agreement, and that the required actions don’t contravene our fiduciary duty to our members, customers and clients.
Our investment portfolio commitment in more detail
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Our commitment includes assets that we (Royal London Mutual Insurance Society) control and which are managed on our behalf by Royal London Asset Management, as well as regulated investment funds managed by Royal London Asset Management3.
Our commitment excludes segregated mandates on behalf of external clients, but includes support for external clients with assets in segregated mandates where those clients have an explicit commitment to achieving net zero.
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We currently track our progress by measuring the carbon intensity of companies we invest in. We do this by measuring emissions related to their direct operations and energy purchases (Scope 1 and 2 emissions) for two asset classes – corporate fixed income and listed equity – in metric tonnes of carbon dioxide equivalent emissions per million dollars invested.
There are significant industry-wide limitations when it comes to calculating Scope 3 emissions, including limited data availability, quality and consistency.
So our commitment doesn’t currently include the emissions from the value chain of the companies we invest in (Scope 3). However, we’ll regularly reconsider this as the viability of including these emissions develops. We’ll also expand the scope of asset classes included in our targets as net zero methodologies evolve.
Find out more about how we measure emissions or get more details about our portfolio breakdown, plus data limitations, in our Climate (TCFD) Report 2023.
How we’re supporting the low-carbon transition
We want to play a part in helping society transition to a sustainable world, while still providing positive investment returns for your clients.
Investing responsibly
We're a purpose-driven modern mutual, committed to acting and investing responsibly.
Now isn’t the time to be passive
We engage with high-emitting companies that we invest in to influence their plans to reduce carbon emissions and transition to a sustainable world in a way that considers the impact on society.
Improving our operations
We continue to deliver against our commitments to reduce greenhouse gas emissions in our offices and operations, and also focus on engaging with our suppliers.
What this means for your clients
We’ll continue to look for ways to reduce our impact, become more efficient and think about the environment when making decisions about our investment portfolio, our offices and our operations.
We take our responsibilities seriously, so we’ll measure how we’re performing against our commitments regularly.
Where to get more information
- Find out how we’re progressing against our climate commitments in our latest sustainability reporting.
- Download our independent assurance statement (PDF) for our operations and value chain emissions reporting.
- Read about how we’ve prepared and reported data in our 2023 operational and value chain emissions basis of reporting (PDF).
Glossary
Greenhouse gases and carbon dioxide equivalent
We use the term greenhouse gases to cover a number of gases identified as drivers of climate change by the United Nations Framework Convention on Climate Change (UNFCCC): carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulphur hexafluoride and nitrogen trifluoride.
To make things simple and comparable across businesses and other polluters, we translate the climate impact of all greenhouse gases into a single measure: carbon dioxide equivalent (CO2e). For example, a gas twice as potent as carbon dioxide (from a climate impact perspective) is assigned two tonnes of CO2e for every one tonne emitted.
When we discuss greenhouse gases, carbon or emissions then usually the CO2e is our best absolute measure.
Carbon intensity
When comparing two companies, the larger may emit more CO2e. But what if the larger company has lower emissions relative to its size? To make companies and portfolios more comparable, we use carbon intensity. This gives us a measure of emissions per unit, allowing for the company’s size (units could be a company’s revenue or value).
Using this approach, we can more easily see whether the larger company has a lower carbon intensity despite having larger absolute emissions.
Net zero
Put simply, net zero means achieving a balance between the amount of greenhouse gas emitted into the atmosphere and the amount removed from it. Net zero is achieved when an organisation reduces the majority of its greenhouse gas emissions in line with the latest climate science and offsets the remaining hard-to-abate residual emissions using carbon removal credits.
Value chain
This is the series of stages involved in producing a product or service that’s sold to consumers, with each stage adding to the value of the product or service.
Greenhouse gas scopes
The Greenhouse Gas (GHG) Protocol Corporate Standard (opens in a new window) classifies a company’s greenhouse gas emissions into three Scopes:
- Scope 1 emissions are direct emissions from owned or controlled sources
- Scope 2 emissions are indirect emissions from the generation of purchased energy
- Scope 3 emissions are all indirect emissions (not included in Scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions. Several different categories of emissions are part of Scope 3, including emissions arising from investments.
Footnotes
Links open in a new window
- Make My Money Matter, 2024
- The Paris Agreement is a legally binding international treaty on climate change. For more information, visit the UNFCCC website
- As at 31 December 2023, Royal London Asset Management managed over 95% of Royal London Mutual Insurance Society assets.