Standard Life Assurance Limited's approach is based on both the UK Stewardship Code 2020 and the European Union’s Shareholder Rights Directive II (EU SRD II), which came into force in June 2019.

It's also in line with our current philosophy on responsible investment (1MB), but we review and refresh our approach regularly.

UK Stewardship Code 2020

This defines stewardship as ‘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.

SRD II

One of the aims of this EU directive is to promote effective stewardship and long-term investment decision-making in regulated financial services companies. In the UK, the main financial regulator, the Financial Conduct Authority, has set out how it plans to implement this directive. One of the requirements is for companies like us to publish our policy on engagement and report publicly every year on how we’ve implemented it, or explain why we haven't.

How we implement the policy

We offer a wide range of funds and products to our customers.

In some cases, we set the investment strategy and guidelines for these, and outsource the management to external asset managers. It’s important to us that these managers take their stewardship responsibilities seriously and influence the companies they invest in where appropriate.

We also offer our customers access to funds, known as external fund links, which are set up and managed by external asset managers. They set the investment strategy and guidelines – we don’t have any input into these.

Funds and portfolios where we set the investment strategy and guidelines

We delegate the responsibility for integrating shareholder engagement in the investment management process and making any necessary decisions to the asset managers we’ve outsourced to. We take into account the capability of asset managers to vote on our behalf as part of the manager selection process, and this is also formally delegated to them in the contract between them and us.

These delegated responsibilities include:

  • Monitoring resolutions and making sure that voting rights are carried out in line with investment objectives
  • Engaging with and speaking to companies they invest in, and monitoring these on relevant matters, including:

      • Strategy

      • Financial and non-financial performance and risk

      • Capital structure

      • Social and environmental impact and corporate governance

  • Escalating activities to the management of companies they invest in as necessary
  • Acting collectively with other investors and shareholders, including communicating with these where relevant or necessary

Although we outsource investment management to a number of asset managers, Aberdeen Standard Investments is our largest strategic partner. They’re committed to the principles of good stewardship and are signatories of the UK Stewardship Code.

You can find information about their engagement and voting policies here:

https://www.aberdeenstandard.com/en/uk/investor/responsible-investing

Their conflicts of interest policy is also available on their website:

https://www.aberdeenstandard.com/en/who-we-are/policies-and-governance

External fund links

The stewardship policies of the asset managers who run these funds apply.

You can find out more about the engagement and voting activity of these managers on their websites. Below are links to the managers who run our larger external fund links:

https://about.vanguard.com/investment-stewardship/

https://www.blackrock.com/corporate/about-us/investment-stewardship#engagement-priorities