Our responsible investment approach

Issues such as climate change, cyber security and corporate governance are increasingly recognised as factors that can impact long term investment returns.

The shift we’re seeing

Customers are also being influenced by growing concern for the planet, and the impact that business activities are having on the environment. With this in mind, we’re making a stronger commitment to including these factors in our investment decisions.

The shift we’re making

As the UK’s largest mutual insurance and pension provider, we’re committed to being a responsible investor.

This means we aim to generate good returns whilst also making a positive contribution to our society and environment. Good governance has always been important to us, but going forward, we’ll be more proactive in asking all the asset managers we work with to include financially material environmental, social and governance (ESG) risks and opportunities when they make investment decisions.

We believe it can help to manage risk, support informed investment decisions, and help to generate better long-term results for our customers.

We’ve also asked our asset managers to help us fulfil our stewardship responsibilities by working with the companies they invest in on our behalf to improve the way they’re run -  for example, by voting our shares, meeting with company management, or pushing for higher industry standards.

Ultimately, we're committed to putting the four key Responsible Investment pillars into practice:

Stewardship and voting

Advocacy and engagement

Investment solutions

ESG integration

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

And that means looking at the bigger picture. 

We want to make sure that the companies we invest in have a positive impact on society

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’ll only ever choose to work with asset managers who are already putting these principles into practice.

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.

How we practice Responsible Investment

We believe our asset managers are best placed to understand the importance and impact of ESG factors across our investments in order to help improve customer outcomes.

Our role is to pick the asset managers we believe are best aligned with our investment principles. We believe deciding not only how we invest but who we choose to work with puts us in the best position to do what’s right for our customers.

Responsible selection

Before we appoint an asset manager, we’ll carry out a responsible investment assessment at the screening stage to make sure they meet the best practice standards we have in place. 

Appointment

We’ll make sure all our Responsible Investment principles are known to all our asset managers, and we’ll only choose to work with the ones who are already working on putting these principles into practice

Monitoring and reporting

We’ll ask asset managers to provide regular updates and reports on their progress. If we find they’re not reaching the standards we expect, we may decide to stop working with them.

By the end of 2020, we also aim to become signatories of the UN Principles for Responsible Investment (PRI), and the UK Stewardship Code set out by the Financial Reporting Council.

What this means for you

Ultimately, responsible investing is not about choosing values over value, but how we can integrate both to deliver long-term investment returns. 

By combining the skills of our asset managers and considering the ESG impacts of all our investments, we aim to provide better customer outcomes whilst working towards making businesses, society and the environment stronger for the future.  

We’ll provide updates on our responsible investment activity in our Annual Report, and we’ll update our website with news on an ongoing basis. 

This website is intended for financial advisers only and shouldn't be relied upon by any other person. If you are not an adviser please visit royallondon.com.

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.