Making responsible investment easy with our default investment solutions

25 August 2021
We’ve introduced ‘tilts’ to our £23bn passive equity funds to further embed responsible investment within our default investment solutions.

We’re committed to cutting the carbon footprint across our investment portfolios in half by 2030 and achieving net zero by 2050. To help us achieve this, our default investment solutions will now include an even greater focus on Environmental, Social and Governance (ESG) factors.

Our passive equity funds are one of the key building blocks of our default investments. We’re taking a more active approach to the way we manage these funds through the introduction of ‘tilts’ which will reduce our exposure to the largest carbon emitters and increase our exposure to the lowest carbon emitters. We believe these adjustments will improve the ESG profile of the funds, without significantly impacting risk or returns.

This is not the time to be passive on ESG. The introduction of these ‘tilts’ to our pension range is part of investing our customers’ money responsibly to make a positive difference to the planet. We will also continue to engage with companies to promote positive change.

We are committed to making investing responsibly easy. That’s why we are making this enhancement to our default pension fund range, with no extra charge to our customers.

Julie Scott, Royal London’s Chief Commercial Officer

As a result, the carbon intensity of the equity investment in our default investment, is expected to reduce by more than 10%. We believe this is an important further step towards protecting the standard of living for this and future generations and helping us achieve our long-term climate goals.

We’ll do this without changing the established risk profile of our default investment solutions or increasing our charges.  So you can be confident that your workplace pension will continue to offer value for money, whilst giving employees confidence that they’re helping to tackle climate change.

In addition to carbon reduction, our more active management approach will give us the flexibility to adjust our exposure to companies with poor social practices or corporate governance issues.

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London EC3V 0RL.