Our stewardship policy
Standard Life is proud to be part of Phoenix Group; the UK's largest long-term savings and retirement business. And as part of Phoenix, we value effective stewardship as a core part of responsible investing, which is at the heart of everything we do at Standard Life.
Good stewardship is critical to how we manage the risks in your members' investments. It's also how we aim to deliver sustainable value for your members, and try to drive positive change in our society.
Phoenix Group has appointed Valeria Piani as Head of Stewardship . She has defined a robust stewardship strategy to take ourselves and investors like your workplace pension scheme members forward.
What is stewardship?
In the UK Stewardship Code 2020 the Financial Reporting Council says:
"Stewardship is the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society."
We've committed to measure ourselves by this standard, and we believe that it is the responsibility of ourselves and of our asset management partners to engage with the companies we invest in to drive better behaviour and influence positive change. It's why good stewardship is such an important part of our responsible investment approach.
Routes to stewardship
By our in-house team
Our stewardship team engages directly with companies based on our Environmental, Social and Governance (ESG) research.
In collaboration with other investors
Joining forces with other peer shareholders to raise concerns with the companies in which we invest.
Through our asset managers
Our asset management partners conduct stewardship activities on our behalf.
How do we carry out stewardship?
In terms of actually influencing decision-making and actions which affect company activities, there are two main ways of doing this: voting, and engagement.
Our approach to stewardship is based on dialogue, feedback, relationships and clear objectives to foster more sustainable returns.
When it comes to voting, your members can't vote directly with companies that they have exposure to through their workplace pension plan investments. This is a responsibility which lies with the asset managers who manage the fund. So, where voting rights exist, our asset managers will vote on your members' behalf.
We go further than this; we make sure that all of our asset management partners have a voting policy in place and vote in line with this policy. Part of our due diligence exercise is to make sure that this policy reflects our philosophy and our approach to responsible investment.
We have also developed a set of Global Voting Principles summarising our expectations of companies on sound corporate governance practices in addition to the management of social and environmental risks and opportunities. We are using these principles as a framework of reference to assess the voting performance of asset management partners.
What we ask our asset managers to do
We expect asset managers to use stewardship to influence the performance, corporate governance and sustainability of the companies we invest in.
Be a signatory to the United Nations-supported Principles for Responsible Investment and adopt the 2020 UK Stewardship Code (or an equivalent in their jurisdiction) and respond to the Asset Owner Diversity Charter questionnaire
Define criteria to identify a list of specific companies to engage with
Use internal and external ESG research to monitor and assess the companies they invest in on our behalf
Managers place votes on our behalf, applying a proxy voting policy that takes our views into consideration
Set engagement objectives and escalate if progress isn't made. Drive better performance from the companies they invest in on our behalf
Update us regularly on all engagement and voting activities
Target net zero
Support our net-zero strategy and implement our exclusion policy
Our priorities for engagement
We’ve listened to customers and colleagues as well as carrying out our own analysis to identify key themes to address with our stewardship activity. These are our current priorities:
- climate change - climate change presents both risks and opportunities for the companies we invest in
- human rights - we believe that the responsibility to respect human rights applies to all companies
- nature - we recognise the need for companies to protect and restore the planet’s natural resources
- controversies linked to United Nations Global Compact (UNGC) breaches - we expect companies to follow international standards on human rights, labour rights, environmental and climate change issues, and anti-bribery and corruption efforts.
Find out more about our asset managers
You and your members can find out more about some of our main asset management partners and their approaches to stewardship and voting here:
|abrdn||information on stewardship||voting disclosure|
|BlackRock||information on stewardship||voting disclosure|
|Vanguard||information on stewardship||voting disclosure|
You can also read our full group wide stewardship policy, and access other relevant documents below:
- Standard Life Approach to Stewardship
- Standard Life Approach to Responsible Investing
- Phoenix Group Stewardship Policy
- Phoenix Group Global Voting Principles
- Phoenix Group Expectations of Companies
- Phoenix Group Responsible Investment Philosophy
- Phoenix Group Stewardship Report (coming soon)
abrdn: example of stewardship in action
Invested Company: Rio Tinto
Issue: Addressing sexual harassment in the mining sector
In 2022, dialogue focused on allegations of sexual discrimination and harassment at the company’s fly-in fly-out sites, and a subsequent inquiry by a Western Australian parliamentary committee. The parliamentary inquiry into sexual harassment found significant issues and encouraged the company to carry out a full review, led by former Australian Sex Discrimination Commissioner Elizabeth Broderick, which was published externally and included 26 recommendations. The asset manager discussed in detail the outcomes of the recommendations and the steps that the company was going to put in place.
Outcomes and next steps
- Rio Tinto has made several changes at both board and executive level
- The company has also put together a strategy to address the outcomes of the parliamentary review and committed to implement all 26 recommendations and publicly report on its progress against them. abrdn is supportive of the steps that the company is taking to address the issue of concern and its openness to recognise that a change of practices is needed.
- However, in light of the serious nature of the problems emerged, the asset manager abstained on the approval of the company’s annual report and accounts at the 2022 AGM.
- abdrn does not believe that this issue is limited to Rio Tinto and has launched an engagement programme focused on mining companies globally that have similar sites to understand the steps being taken to ensure employees have safe and supportive working conditions
Blackrock: example of stewardship in action
Invested Company: Barclays PLC
Issue: Climate change
BlackRock has engaged regularly with Barclays over the last several years to discuss a range of material corporate governance and sustainable business matters. At Barclays’ 2022 AGM, management proposed an advisory, non-binding shareholder vote on the company’s Climate Strategy, Targets and Progress 2022. The proposal gave shareholders “an opportunity to vote to endorse [the bank’s] climate strategy, targets and progress.” This advisory vote on Barclays’ climate strategy, targets and progress came after the bank received climate related shareholder proposals for shareholder consideration at the 2020 and 2021 AGMs. BlackRock believed that Barclays has made notable progress in developing its net zero roadmap.
Outcomes and next steps
- While BlackRock acknowledges Barclays’ progress against its 2020 commitment, it believed that there were areas where the bank’s disclosure and underlying climate strategy could be enhanced. Reporting additional information on financed emissions outside of energy and power would be helpful for investors to better understand the climate risks, challenges and opportunities Barclays is facing and to measure progress on an ongoing basis.
- BlackRock has continued to engage with the company to monitor progress against the commitments made in its climate report and the above-mentioned areas for enhanced reporting. This as well as the consistency between corporate decisions and stated climate ambitions will be carefully considered in future voting decisions.