ESG Investors

INVESTMENTS

We invest billions of our customers’ savings and our responsible investment principles are integral to how we do this.

These responsible investment principles are also aligned to our wider corporate objectives, regulatory obligations and our stakeholder requirements.

We aim to invest £250 million per year in green and social assets. And our commitment is to reach Net Zero in our scope 3 carbon emissions by 2050, and achieve 50% of this by 2030.

During 2023, we invested in £325m of eligible green and social assets in accordance with our Sustainability Bond Framework. In 2022 we met our total £575m green and sustainability bond investment commitments, well ahead of schedule.

Hospitals

We’ve invested £26 million into a NHS Hospital in Tunbridge Wells, Kent.

Housing

We’ve invested £90 million into ‘part-buy part-rent’ affordable housing in the UK.

Renewables

We've invested £118 million in a UK offshore windfarm.

Green/Sustainability Bond allocation report

RESPONSIBLE INVESTMENT FRAMEWORK

Our Responsible Investment Framework (RIF) was implemented in 2019. It defines how environmental, social and governance (ESG) factors are integrated into our investment analysis, decision-making processes, and with our broader purpose and strategy.

The Responsible Investment Framework uses a principles-based approach to:

Analyse - identify risks and opportunities arising from the responsible investment.
Engage - establish dialogue with external managers, data providers, investee companies, policymakers and the broader market.
Act - monitor investments in our portfolio that do not align with the RIF and take action.
Report - disclose to stakeholders the key responsible investment characteristics of our portfolio.

We use negative screening to restrict and exclude controversial sectors or activities, companies with weak governance or companies that do not reflect our values. We use positive screening to target investments that are consistent with our responsible investment objectives and values.

Stewardship

We believe that stewardship is essential to achieve an efficient transition to a low carbon economy. Our commitment to stewardship and engaging with companies, where relevant, is included in our Responsible Investment Framework.

Our engagement falls into three broad categories:

Direct engagement – with investee companies to support a market-wide transition and improvements on sustainability.
Asset managers – working closely with our asset managers and engaging in frequent dialogue on investment-related matters, including sustainability and climate change.
Wider market participants – joining external initiatives or organisations to participate in activities that influence regulation, policy and wider areas of the market.

Transition plan

Our ambition is to be Net Zero in our operations (Scope 1, 2 and business travel) by 2025. And Net Zero in our investments, supply chain, employee emissions and other relevant indirect emissions (Scope 3) by 2050 with a 50% reduction by 2030.