Climate change and responsible investment
As an investor of vast amounts of money in everything from major businesses to buildings and precious metals, Standard Life, as part of Phoenix Group, is in a fantastic position to make a tangible contribution to addressing one of the most serious issues of our day: climate change.
To quote the United Nations Paris Agreement , "Climate change is a global emergency that goes beyond national borders. It is an issue that requires international cooperation and coordinated solutions at all levels".
What is Net Zero?
|Amount of greenhouse gas produced||=||Amount of greenhouse gas removed from the atmosphere|
We reach net zero when the amount we add is no more than the amount taken away.
Our action plan to get to net-zero
Phoenix Group has around 13.8 million policies and £324 billion in assets under administration. It is the UK's largest long-term savings and retirement business. And as an insurer and long-term global investor, one of the areas we can have the biggest impact in is through responsible investment.
The whole Phoenix Group has a clear area of focus set out to help us actively fight climate change by:
- Investing responsibly - responsible investment is the practice of incorporating environmental, social and governance (ESG) factors into investment decisions and active stewardship. We are committed to factoring ESG matters, which include climate-change related risks and opportunities, into our investment decision-making process.
- Changing our own business operations – that’s everything from the energy we use in our buildings and the cutlery in the canteen to business travel and the waste and recycling management for our large, busy offices. We can get on with this right away, and that’s what we’re doing.
Our net-zero timeline
Reduce the carbon emission intensity of our investments* by 25% + Achieve a net-zero target for our business operations
A reduction of at least 50% in the carbon emission intensity of our investments**
Net-zero carbon in our investment portfolio
* This will cover all listed equity and credit assets where Phoenix Group can exercise control and influence.
** This will target all assets at a Group level where Phoenix Group can exercise control and influence.
We've started the journey and we'd like to invite you and your workplace pension scheme members to come along with us. After all, it's your members' money that we have the privilege to manage and invest, so they can be proud that their money is making a genuine difference.
The potential prize is huge:
Having a pension scheme which aims to invest sustainably is potentially 21x more effective1 at reducing your carbon footprint than swapping planes for trains, going veggie and switching to a renewable electricity supplier combined.
It can provide a tangible, practically valuable option to help reduce the impact of climate change beyond the options that we can all choose to take as individuals.
1Source: Make My Money Matter - the campaigning body set up by Richard Curtis. Richard was the Keynote Speaker at the recent Phoenix Power of Pensions - Accelerating Action Towards Net Zero event.
Our net-zero commitments and investing responsibly
Our net-zero commitments - which form one part of our responsible investing approach - has three strands:
- Decarbonisation of investment portfolios
- Engaging with investee companies for change
- Investing in opportunities or climate solutions to protect the future
This means that through time, we will be increasing investment in companies with strong climate strategies and those coming up with solutions to help tackle climate change. These are the businesses and technologies needed to support decarbonisation in the real economy. And, as a last resort, we won't be afraid to stop investing in those companies failing to meet our minimum climate standards.
On that note, stopping investing isn't ever something to be taken lightly. But climate change presents financially material risks as well as opportunities to our investment portfolios. Our investment and sustainability experts are focused on addressing these risks - and opportunities - for your members. So they can be reassured that they're investing both wisely and sustainably.
Hear from Phoenix CEO, Andy Briggs, on our net-zero plan
We hope our firm intention for a net-zero future is a powerful and reassuring message for your members. It's their money that's being invested, and their living future retirement that's being invested for.