Standard Life completes Sustainability Disclosure labelling implementation, investing close to £30 billion via sustainable solutions

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• Standard Life leads pension industry by investing in Sustainability Improvers™ labelled funds under SDR regime for more than 2 million members
• Creation of what’s believed to be the industry’s first truly sustainability improving default by a mainstream pension provider
• Introduction of a dedicated sustainability improving approach across multiple asset classes with explicit Net Zero objectives, designed to optimise investment returns over the long term

Standard Life, part of Phoenix Group, continues to embed sustainable investing principles to improve financial outcomes across pension default options with the successful adoption of Sustainability Improvers™ labelling for more than 2m members invested in its Sustainable Multi Asset, Future Advantage and selected Investment Pathway funds.

In December 2024, Standard Life announced its aim to be the first mainstream pension provider to adopt Sustainability Improvers™ labelling in its default to promote high standards in sustainable investing, integrity and transparency.

Since then, it has undertaken the adoption of the approved labelling, creating what’s believed to be the industry’s first truly sustainable default by a mainstream pension provider to broadly align to the FCA’s SDR regime.

The labelling applies across its pension defaults offered to Workplace, Personal Pension customers and Retirement Income customers using Investment Pathways which future proofs these solutions as the SDR regime is expected to extend to pension funds in due course.

Callum Stewart, Head of Investment Proposition Development at Standard Life said: “We have worked hard to be one of the first in the Workplace provider market to embrace the FCA’s new Sustainability Improvers™ label across a majority of assets in our main default solution. With over £20bn of Standard Life’s Sustainable Multi Asset portfolios targeting a sustainability objective, our approach is intended to improve member outcomes while providing high levels of transparency through enhanced disclosures. It’s an iterative process where we expect future developments to be part and parcel of our focus.

“In line with the Sustainability Improvers™ label, we are focusing on transitioning companies, supporting our management of climate risks and opportunities on the journey to net zero by 2050 and managing financial outcomes on behalf of our members.

“We will deliver this approach in line with our new customised sustainable index methodologies, which are based on the FTSE Climate Aligned Benchmarks announced by Phoenix Group earlier this year. Our future proofed underlying funds adopting this approach have received FCA approval after a lengthy period of positive engagement with the regulator. Our custom index methodology combines alignment with 2050 climate transition targets alongside forward-looking insights, including those available from the Transition Pathway Initiative. This is a truly modernised approach, which is expected to improve long-term financial outcomes for members. In this regard, we believe that we are the first UK pension default to embed the SDR labelling regime across our Workplace default to promote good outcomes for members.”

Standard Life’s commitment is underpinned by principles that include Focused Outcomes, Future Proofing, Responsible Investment, Robust Governance and Independent Investment.

The future-proofing capability allows Standard Life to seamlessly make any necessary changes with minimal impact on members without changes to Strategic Asset Allocation, risk models or costs.

Over 75% of Sustainable Multi Asset investments now have a formal objective to align with the transition to Net Zero by 2050, while complying with the new regulatory threshold. This development includes listed equity and fixed income funds, meaning both younger and older members will benefit from the development.

By having member solutions with responsible investment built-in, Standard Life is aiming to reduce cardon footprint of investments by 7% a year, and up to 50% by 2030, reaching net zero by 2050, based on a 2019 baseline.

As a result of introducing the Sustainability Improvers™ more than 2 million members investing in Standard Life’s Sustainable Multi Asset solution, are expected to benefit from improved long-term financial outcomes and greater transparency.

Standard Life committed to a sustainable investment philosophy when transitioning 1.5 million customers to sustainable strategies between 2020 and 2022 and has embraced the new regulatory framework in advance of it becoming a requirement for pension funds. This development is future proofing its default solutions by embedding a verified sustainability approach to improve financial outcomes for members.

ENDS
 

 

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Notes to editors

Sustainability Disclosure Labelling:

The FCA introduced a package of measures to improve the trust and transparency of sustainable investment products. To protect against greenwashing, it introduced an anti-greenwashing rule which reinforces that sustainability-related claims must be fair, clear, and not misleading. As part of the Sustainability Disclosure Requirements regime, Standard Life has adopted the Sustainability Improvers™ label.

Sustainability Improvers™:

These funds invest mainly in assets that may not be sustainable now but aim to improve their sustainability. Examples may include investments in companies that are on a credible path to net zero by 2050 or are committed to improving social standards such as human rights.

Sustainability Focus™:

These funds invest mainly in assets that focus on sustainability for people or the planet. Examples may include activities to support the production of energy, for example, from solar, wind or hydrogen.

Sustainability Impact™:

These funds invest mainly in solutions to sustainability problems with an aim to achieve a positive impact for people or the planet. Examples may include renewable energy generation and social housing.

Sustainability Mixed Goals™:

These funds invest mainly in a mix of assets that either focus on sustainability, aim to improve their sustainability over time, or aim to achieve a positive impact for people or the planet. Examples may include a mixture of investments from the labels above (Focus, Improvers, and Impact).

Funds that have labels will also need to give clear and simple information, including:

• what the sustainability goal of the fund is
• the approach to achieving it
• annual updates on progress towards the goal

 

About Standard Life

• Standard Life is a brand that has been trusted to look after peoples’ life savings for 200 years
• Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers’ pension scheme.
• Standard Life is part of Phoenix Group, one of the UK's largest long-term savings and retirement businesses. We’re proud to be building on 200 years of Standard Life heritage together
• Our products include a variety of Pensions, Bonds and Retirement options to suit people’s needs, helping our customers to invest and save for their future. We’re proud to offer a leading range of sustainable and responsible investment options.
• We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs, and plan a future they feel confident about.
• The value of investments can go down as well as up and may be worth less than originally invested.