The value of investments can go down as well as up, and your members could get back less than was paid in.
Investing responsibly could help your members achieve their goals
From climate change to human rights, awareness of environmental, social and governance (ESG) issues is growing. Many of us are making more responsible and sustainable choices in our lives.
These ambitions are extending into the world of pensions with more members wanting their money to be invested responsibly. Importantly though, the priority for most members remains on growing and protecting their plan to deliver the money they need in retirement.
The good news is that these needs can go hand in hand. Investing responsibly can make financial sense and could help to drive improvements in sustainability. At Standard Life, we offer a range of different investment options that can help you support your members towards achieving their financial and responsible investment goals.
How do people feel about responsible investing? Download our Responsible Investing Viewpoint 2023 to find out more.
Our robust approach to responsible investment
Responsible investment is a combination of different approaches to managing money that includes environmental, social and governance (ESG) factors.
When it comes to your investments, we’re accountable to you and your members. That’s why it’s integrated into our investment options. It’s also why we need to understand how investment managers integrate ESG when building portfolios.
How we monitor ESG integration
We review how managers are integrating ESG in their processes
We ask investment managers for information to understand if they’re meeting our current expectations on ESG
We commit to better standards of ESG use and governance
We talk with investment managers to encourage them to incorporate and better use ESG in their processes
We have an ESG approach, which covers our pension and life unit-linked fund range
Download this guide to read more about our approach to ESG:
We have an approach to stewardship and engagement
Visit our Stewardship page for more information about this approach
Download our jargon buster and help your members understand more about ESG.
Making it easy to invest responsibly
Where your members’ pension plans are invested is very important. It has a big impact on how much they’ll have in their pot when they retire and how long this will last, as well as meeting responsible investment requirements. That’s why we’ve created a clear choice of options from our easy default to a range of self-select funds.
With most workplace pension scheme members opting to stay in their scheme default, it’s important that it has a comprehensive yet clear strategy to meet most member’s needs.
Sustainable Multi Asset Universal Strategic Lifestyle Profile (SLP)
Our "default" investment option is designed for the majority of members. It aims to help members achieve a good outcome when they come to retire by:
- growing capital in the initial years of the savings journey
- preserving it as members approach retirement
- focusing on ESG factors we believe are financially material
All this helps members do good with their pension money without sacrificing returns.
Sustainable Multi Asset Universal SLP uses three responsible investment approaches:
- Negative screening
Screening out financially material ESG risks (e.g controversial weapons, tobacco etc)
- Positive tilting
Investing in companies that have a higher ESG rating
Influencing positive change through stewardship, utilising proxy voting and company engagement to drive positive behaviour
More choice for members
While our Sustainable Multi Asset Universal SLP is designed to meet the needs of the majority of your members, we recognise some will want to invest in a different way. For members who want to take a different approach, we’ve a range of options to help them do this.
Alternative Sustainable Multi Asset options
We have three additional lifestyle profiles, available as self-select options for members who are looking to target a specific outcome:
- Sustainable Multi Asset Annuity SLP (a guaranteed regular income)
- Sustainable Multi Asset Drawdown SLP
- Sustainable Multi Asset Lump Sum SLP
Future Advantage fund range
Our Future Advantage range consists of five risk-rated funds that members can select based on their attitude to risk.
- We aim to grow your member’s investment over the long-term through a risk-managed approach
- There are five funds in the range, each designed to match a different risk attitude on a scale of 1 (lowest) and 5 (highest)
- A responsible investment approach using exclusions, tilting and stewardship is predominantly delivered through the underlying equity content in each fund (this will vary across the range based on where each fund invests)
- Investment experts will manage the fund with the aim of achieving the best possible returns for the risk level chosen
- These are mainly passive solutions, however funds can use active or passive strategies and will invest through other funds from across the industry.
More information on the Future Advantage range, including the level of responsible investment content, can be found in the fund factsheets.
Self-select investment options
For members who want to be more involved in their pension investment, we offer a self-select range of funds, with different strategies, selections of asset types and ESG approaches.
Our active fund options include both screened and thematic options from a range of fund managers.
We also offer passive fund options that track the performance of different market and custom indices. These funds exclude investments that don't meet certain criteria such as specific socially responsible or religious principles.
Responsible investment based on strong principles
We base our commitment to responsible investment on strong principles: those of the United Nations-backed Principles for Responsible Investment (the PRI) and the UK Stewardship Code.
As part of Phoenix Group, we have a vital role to play in addressing one of the biggest challenges of our time. We do this through partnerships, memberships and as signatories. For more information, read the Phoenix Group Sustainability Report
When it comes to making responsible investment decisions, at Standard Life we’re committed to playing our part. We can do this with confidence because as a business, we’re actively committed to upholding and championing our ESG standards, through our long-term investments.