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From November 2026, we're making some changes to how the Standard Life Ethical Pension Fund invests in the shares of companies, also known as equities.
Our aim is to keep a balance between investing in a way that reflects customers' ethical and values-based preferences and helping the fund aim for better long-term investment outcomes.
This page explains what’s changing, how the updated ethical approach works, and where you can find more information.
Why we’re making these changes
We regularly review our investment solutions to help ensure they continue to meet customer needs and expectations.
Research commissioned by Standard Life found that 70% of customers expect an ethical fund to perform as well as, or better than, a non-ethical equivalent. Since the launch of the Standard Life Ethical Pension Fund in 1998, the concept of ethical investing has changed. Instead of relying only on excluding entire industries or activities, now we can also use more information to assess individual companies.
Based on our latest review and research, and because customers' expectations of ethical investing have changed over time, we believe it's the right time to update and modernise the fund's approach.
What’s changing?
The fund invests predominantly in equities, with the rest invested in corporate bonds (loans to companies). We’re updating the fund’s approach to investing in equities.
The equity part of the fund will now invest in line with the FTSE4Good Developed Index. This specialist index has been established for 25 years and is designed to measure the performance of companies across a wide range of environmental, social and governance (ESG) practices. The index is aligned with UN Sustainability Goals and is also used by other ethical funds in the market.
The updated approach is designed to help spread risk by investing across a wider range of regions and countries, while continuing to invest in line with ethical criteria. These include North America, Japan, Asia Pacific, as well as the UK and Europe.
We’re also updating the fund description so it reflects these changes You can see the current and new descriptions at the bottom of this page.
New fund criteria
The fund will now use a wider range of criteria to assess whether it can invest in a company. This means companies must meet minimum standards before the fund can invest in them.
The updated approach looks not only at what a company does, but also at how it operates and whether it meets the required standards. Companies are monitored on an ongoing basis and may be removed if they no longer meet those standards.
Some activities continue to be excluded:
| Category | Old approach | New approach |
|---|---|---|
|
Tobacco Production |
Excluded |
Excluded |
| Thermal Coal Extraction | Excluded | Excluded (if greater than 50% of revenue) |
| Nuclear Weapons, Chemical & Biological Weapons, Cluster Munitions, Anti Personnel Landmines | Excluded | Excluded |
| Conventional Military Weapons | Excluded | Excluded |
| Firearms | Excluded | Excluded |
Some activities are now assessed against the FTSE4Good's Index standards and eligibility criteria, meaning that these issues are now assessed using a broader range of information about how a company operates:
| Category | Old approach | New approach |
|---|---|---|
| Adult Entertainment | Excluded | Companies are assessed against FTSE4Good's index standards and eligibility criteria |
| Alcohol production | Excluded | Companies are assessed against FTSE4Good's index standards and eligibility criteria |
| Animal testing | Excluded | Companies are assessed against FTSE4Good's index standards and eligibility criteria |
| Animal husbandry | Excluded | Companies are assessed against FTSE4Good's index standards and eligibility criteria |
| Environmental protection | Excluded | Companies are assessed against FTSE4Good's index standards and eligibility criteria |
| Employment | Excluded | Companies are assessed against FTSE4Good's index standards and eligibility criteria |
| Fur | Excluded | Companies are assessed against FTSE4Good's index standards and eligibility criteria |
| Gambling | Excluded | Companies are assessed against FTSE4Good's index standards and eligibility criteria |
| Human rights | Excluded | Companies are assessed against FTSE4Good's index standards and eligibility criteria |
| Marketing breast milk substitutes | Excluded | Companies are assessed against FTSE4Good's index standards and eligibility criteria |
| Nuclear | Excluded | Companies are assessed against FTSE4Good's index standards and eligibility criteria |
| Poor business practices | Excluded | Companies are assessed against FTSE4Good's index standards and eligibility criteria |
| UN Global Compact | Excluded | Companies are assessed against FTSE4Good's index standards and eligibility criteria |
Why this remains an ethical fund
Ethical considerations have not been removed. The updated equity approach still applies ethical criteria, but as well as using explicit exclusions it also uses a broader range of information to assess companies than was available when the fund launched.
This means some companies that would previously have been excluded may now be eligible if they meet the required standards. It also means companies can be excluded if they fail to meet those standards, even where they are not involved in traditionally excluded activities.
Our aim remains to invest in a way that reflects customers’ ethical and values-based preferences, while helping the fund aim for better long-term investment outcomes.
What is not changing?
- The name of the fund is not changing.
- The corporate bond part of the fund is not changing.
- There is no change to the fund’s charges as a result of these updates.
- There is no change to the fund’s risk profile or volatility rating.
Charges are not guaranteed. They are regularly reviewed and may be changed in the future.
Do I need to do anything?
You don’t need to do anything if you’re happy with this change. If you want to change your investments, you can do this at any time. You can find more information about your investment options by logging in to your account or contacting us.
Find out more about ethical investing
You can find out more about our approach to ethical investing in our ethical investment guide.
| Current fund description | Updated fund description |
|---|---|
|
The fund aims to provide long term growth by investing in a diversified portfolio of assets (including equities and corporate bonds) that meet our strict ethical criteria. The fund's assets can be from both the UK and overseas and are predominantly equity based. The fund manager will exclude companies which fail to meet the ethical criteria whilst seeking to include companies whose business activities are regarded as making a positive contribution to society. The value of investments within the fund can fall as well as rise and is not guaranteed - you may get back less than was paid in. The fund may use derivatives for the purposes of efficient portfolio management, reduction of risk or to meet its investment objective if this is permitted and appropriate. The sterling value of overseas assets held in the fund may rise and fall as a result of exchange rate fluctuations. |
The Fund aims to provide long-term growth by investing in a diversified portfolio of assets, including equities and corporate bonds, that meet a defined set of ethical and environmental, social and governance (ESG) criteria. The fund’s assets can be from both the overseas and UK and are predominantly equity based. The equity component of the Fund seeks to avoid investments in companies whose activities are considered inconsistent with these principles through the application of exclusionary screens. These include restrictions on companies involved in the production of certain weapons, tobacco, thermal coal and specific human rights-related concerns. The corporate bond component of the Fund applies a complementary set of exclusions, including restrictions on companies with significant involvement in fossil fuels, animal testing, pornography, gambling and alcohol. In addition, similarly to the equity component, the corporate bond component excludes certain weapons, tobacco, thermal coal and specific human rights-related concerns. The Fund can be passively and/or actively managed and is not restricted to using a particular fund manager or investment strategy. Changes can be made to the manager and strategy without notice to ensure the Fund continues to meet its aim. The value of investments within the fund can fall as well as rise and is not guaranteed - you may get back less than was paid in. The fund may use derivatives for the purposes of efficient portfolio management, reduction of risk or to meet its investment objective if this is permitted and appropriate. The sterling value of overseas assets held in the fund may rise and fall as a result of exchange rate fluctuations. |