We’re accountable to you and your employees when it comes to the investments we make on your behalf. We understand that considering how our investment managers integrate environmental, social and governance (ESG) factors when building a portfolio can have a big impact, both positive and negative, on the environment, climate, people and society. It can also have a financial influence on companies, their shareholders and investors. That’s why ESG is integrated into our investment options.

The following table shows a summary of how ESG is applied to our off-the-shelf investment options and our self-select investment options. You can find more details below the table.

How ESG is applied to Standard Life’s range of investment options

ESG incorporation

Stewardship
Integration Screening Thematic Engagement Proxy voting
Off-the-shelf investment options
Standard Life Active Plus range (funds and lifestyle profiles) Note 1 — —
Standard Life Passive Plus range (funds and lifestyle profiles) Note 2 — — —
Standard Life Passive Core (lifestyle profile) Note 2 — — —
Standard Life MyFolio Managed range
(funds and lifestyle profiles)		 — —
Standard Life Managed Fund
(fund and lifestyle profiles which include the fund)		 — —
Self-select investment options
Funds managed by Aberdeen Standard Investments Note 3 —
Funds managed by other external fund managers Note 4 Note 5 Note 5 Note 4 Note 4

Most of the funds in the Active Plus range are actively managed by Aberdeen Standard Investments. Aberdeen Standard Investments integrates ESG into their investment management processes. They have the information and flexibility to take account of ESG analysis and factors when they select investments for their portfolios. The Active Plus range also invests a portion in passively managed funds. This is when an investment manager tracks the performance, before charges, of a benchmark or index rather than making active investment decisions about where money is invested. This means they don’t actively integrate ESG into their investment processes. However, as a steward of an investment they can influence positive change using engagement and voting rights.

The Passive Plus and Passive Core ranges invest predominantly in passively managed funds. This is when an investment manager tracks the performance, before charges, of a benchmark or index rather than making active investment decisions about where money is invested. This means they don’t actively integrate ESG into their investment processes. However, as a steward of an investment they can influence positive change using engagement and voting rights.

These include ethical funds which use screening approaches.

Standard Life offers a range of funds managed by other external fund managers. A number of these have ESG and/or stewardship within their investment processes.

Standard Life offers a range of funds that include specific values-based themes and ethical screening approaches. Find out more about these choices.


Abacus

Find out how ESG can help manage risk

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More about ESG integration and investment choices

Presentation

Off-the-shelf actively managed investment options

The funds in the Active Plus and MyFolio Managed ranges, and the Managed Fund (as well as the underlying funds these invest in), are mainly actively managed by Aberdeen Standard Investments. They integrate ESG into their investment management processes. As an active manager they have the information and flexibility to take account of ESG analysis and factors when they select investments for their portfolios.

Please note: although ESG is integrated at all stages of the investment management processes, screening and thematic approaches may not be applied. So investments which could be seen as negative may still be included.

The vast majority of the funds in the Passive Plus range and the Passive Core lifestyle profile use some underlying investments that track a market index, so ESG isn’t integrated into the selection of individual stocks. But all the passive investment managers we use have established investment stewardship programmes. In other words, they actively engage with the companies they invest in to help influence positive change.

This approach can bring improvements to board composition, executive pay and benefits, governance structures, and board oversight of strategy and risk.

Plant

Off-the-shelf passively managed investment options

Graph investing

Self-select investment options

This is the name for the wide range of investment funds we offer (alongside the core active and passive options) from all the investment managers we work with. And we want all of them to explain how they apply responsible investment to their funds.

Subject to any obvious restrictions to their strategies, for instance where a passive manager has to track a broad market index, we expect all the investment managers we work with to:

  • engage effectively with companies and, when necessary, escalate this engagement to drive better long-term performance from the business as a whole
  • use the voting rights they have to encourage positive commitments or practices
  • deliver robust reporting on their ESG engagement activities, including details on the factors they discuss, and any actions or outcomes agreed during these meetings

Responsible investment based on strong principles

We base our commitment to responsible investment on strong principles: those of the United Nations-backed Principles for Responsible Investment (the PRI) and the UK Stewardship Code.

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The PRI

This is an independent network of investment companies working together to develop a more sustainable global financial system. It believes that an economically efficient and sustainable system is needed to create long-term value for investors. It also believes that a system like this will reward long-term responsible investment, and benefit the environment and society.

Find out more
Certificate

The UK Stewardship Code

It aims to improve the quality of engagement between institutional investors, such as fund management groups and pension trustees, and companies to help improve long-term returns for investors.

 

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How we monitor ESG integration

We review how managers are integrating ESG in their processes

  • We ask investment managers for information to understand if they’re meeting our current expectations on ESG

We commit to better standards of ESG use and governance

  • We talk with investment managers to encourage them to incorporate and better use ESG in their processes

We have an ESG policy, which covers our pension and life unit-linked fund range

  • Find out more about the policy

We have an approach to stewardship and engagement

We also offer a choice of screening and thematic approaches

Most of our active investment options take ESG factors into account within the fund management process. But if your employees want to go further and align their investments to their personal ethics and values, we have a range of active and passive funds to help them do this.

These funds offer a mix of screening and thematic approaches. They include ethical funds that screen out ‘negative’ investments, such as tobacco and weapons, and/or screen in ‘positive’ investments such as cleaner energy or sustainable transport. Thematic funds, such as impact funds, aim to achieve a specific environmental or social outcome. Find out more about these approaches.

Remember: the value of all investments can go down as well as up. Your employees may get back less than was paid in.

Active funds

We offer a number of ethical funds managed by Aberdeen Standard Investments. These use positive and negative screening criteria. The positive criteria look for companies which are involved in activities that benefit society and the environment. The negative criteria look at avoiding investment in companies involved in certain industries and practices such as animal testing, climate change impacts and human rights issues.

Find out more about Aberdeen Standard Investments’ ethical investment approach for these funds.

Standard Life Ethical Pension Fund factsheet
SL ASI UK Ethical Equity Pension Fund factsheet
SL ASI Ethical Corporate Bond Pension Fund factsheet
SL ASI Europe ex UK Ethical Equity Pension Fund factsheet

We also offer a fund developed by Big Issue Invest, in partnership with Columbia Threadneedle Investments. The fund aims to support socially beneficial activities and developments.

SL Threadneedle UK Social Bond Pension Fund factsheet

Passive funds

We offer passive funds managed by Vanguard and HSBC Global Asset Management.

These funds have broad coverage of the market, but exclude investments that don’t meet specific socially responsible or religious principles.

SL Vanguard SRI European Stock Pension Fund factsheet
SL Vanguard SRI Global Stock Pension Fund factsheet
SL HSBC Islamic Global Equity Index Pension Fund factsheet

Group Self-Invested Personal Pension (SIPP) options

If you offer a Group SIPP to some or all of your employees, they can choose from a larger range of options managed by other well-known ethical and socially responsible investment managers.

Find out more about the funds available

DNA Helix

More about screening and thematic approaches

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