Responsible Investments

Decarbonising our investment portfolio

We are committed to decarbonising our investment portfolio and achieving net zero by 2050. We do this by ensuring the effective stewardship of our assets and investing in climate solutions to optimise value for our customers and reduce their exposure to climate risk. 

Our approach to human rights in our investment portfolio

At Standard Life, we have committed to respect human rights, as outlined in our Human Rights policy. We are taking clear proactive steps to understand and address risks to people across the companies we invest in. 

We’ve carried out a detailed review of our portfolios to identify where people may be affected through the direct operations of investee companies, which involved looking at country-level and sector-level risks. 

We’ve identified concerns and have flagged these companies for targeted engagement, where, over a three year cycle, we will work directly with those businesses to encourage stronger human rights practices. 

We will report annually on the progress of companies directly engaged through our stewardship report and will repeat the due diligence exercise at the end of the engagement cycle. 

Our responsible investment approach

Integrating Environmental, Social and Governance (ESG) Considerations

As institutional investors, we have a duty to act in the best long-term interests of our beneficiaries. In this fiduciary role, we believe that ESG issues can affect the performance of investment portfolios. 

We are committed to responsible investment and believe that integrating ESG factors into our investment and stewardship processes is essential for delivering strong and sustainable returns that enable lasting financial security.

As an asset owner, we delegate most investment management to external asset managers. Wherever we have the ability to set investment strategy or influence investment solutions, we apply our ESG approach consistently across Standard Life’s portfolios, which operate under the Phoenix Life, Standard Life, Reassure and SunLife brands.

Our Responsible Investment approach focuses on:

• Managing ESG risks that could impact financial performance.
• Identifying sustainable investment opportunities that support long-term growth.
• Stewardship, using our influence to encourage responsible business practices.

We aim to adhere to the United Nations-supported Principles for Responsible Investment (PRI) and are embedding the six principles in our approach to both; ESG integration and stewardship. We also take account of current and emerging UK sustainable finance regulations and industry best practice.

For more information on assets where we do not control investment strategy, such as customer investments in externally managed funds, read Our Approach to ESG Integration.

We believe ESG integration strengthens portfolio resilience, supports sustainable finance, and helps align investors with broader societal objectives and supports outcomes. Transparency and communication at every stage of the investment process is crucial. We appreciate that our stakeholders expect us to monitor and report on our investment activities just as we expect the companies that we invest in to report on their management of ESG factors in their operation.

Exclusions

While our preference will always be to engage in constructive dialogue with our investee companies to help improve their performance on ESG factors, we accept that this might not always be possible or appropriate. This could be due to the nature of their business or because they fail to meet our expectations. At present, we have implemented investment exclusions in five key areas across all assets where we have direct control or influence of the investment mandate or solution:

• Controversial weapons
• Thermal coal¹: where >20% of revenue is from this source
• Oil sands: where >20% of revenue is from oil sands operations
• Arctic drilling: where >20% of revenue is from Arctic drilling activity
• Tobacco: where >1% of revenue is from this source for tobacco producers, 25% of revenues from this source for tobacco service/distribution companies and 1% of revenues from this source for E-cigarette producers

The excluded sectors and thresholds applied are periodically reviewed.

¹Our threshold for exclusion is 20% of revenues from this source, and a waiver is adopted where companies have between 20-30% of revenues from this source and have Paris-aligned science-based targets approved by the SBTi.