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How we action stewardship

Stewardship is the responsible allocation, management and oversight of capital to create long-term sustainable value for customers, members and clients.

We believe that active stewardship is a fundamental part of active management.

When it comes to responsible investment, the two main ways that we put stewardship into action are:

Engagement

We aim to use our position as the UK's largest mutual life, pensions and investments company to influence change. We do this by engaging with policymakers and the companies we invest in and collaborating with stakeholders and other organisations.

We ask our asset management business to engage with companies on our behalf and to prioritise our two focus areas: climate and nature, and social and financial inclusion.

Voting

We actively use the rights we have from holding shares in companies, including our right to vote at company meetings. We ask our asset managers to vote on our behalf in line with our voting principles (PDF).

This includes voting on matters such as how companies are run (governance), their impact on climate change, board appointments, changes to a company's structure, pay and compensation, and mergers and acquisitions.

Engagement and voting in action

Find out how we aim to influence change and the areas we focus on.

Read our case studies   View stewardship report (PDF)  

Prioritising engagement over exclusions

We recognise that meaningful change is best driven by engaging with companies where there are issues to be addressed.

We don't immediately withdraw investment from (exclude) a company if it fails to meet our environmental, social and governance (ESG) preferences. For example, if we have concerns about the credibility of a company's strategy to reduce carbon emissions. Our starting point is to engage with the company so we can better understand and influence how they operate. By doing that, we can prioritise your clients' financial interests and aim to play our part in moving fairly to a sustainable world.

However, if a company isn't making tangible progress – and this could have a negative impact on your clients' pension and ISA savings – we'll take necessary action, which may include exclusion.

We believe that exclusions should be used sparingly and be informed by the preferences of our customers, as well as Our Purpose. You can find out more details about our approach in the Royal London Exclusions Policy.

Committed to high standards

We're signatories of the UN Principles for Responsible Investment and the UK Stewardship Code - as is Royal London Asset Management, which manages most of our customers' pension and ISA savings through our Governed Range, and the other asset managers we work with.

More information

Find out more about our approach to responsible investment.