Climate change is the challenge that will define this generation. Temperatures are on track to rise by more than 3 degrees by 2100 if immediate action is not taken to curb global carbon emissions.
RLAM has embraced responsible investing for many years. In 2020, we expanded our ESG integration practices and now integrate these across all our asset classes.
We engage with companies to make them better investments for clients, and to effect change on the issues that matter most – including climate change.
Our Net Zero targets
RLAM has committed to:
- Achieving Net Zero across our investment portfolios by 2050*
- Reducing carbon emissions from our investment portfolios by 50% by 2030
- Developing solutions that enable clients and customers to invest in the low carbon transition
“Climate change is the biggest challenge facing our society today. As a responsible investor, RLAM’s ambition is to work with our clients to be a catalyst for a Paris-aligned economy. This permeates every aspect of our operations – from our Net Zero commitments, to the way we manage properties in our portfolios and how we engage with the companies we invest in."
– Hans Georgeson, CEO, Royal London Asset Management
Putting our commitment into practice
We place great importance on working with companies to make them better investments for our clients and use our voting rights to give them a voice in the boardroom. We engage with companies on a range of subjects with the aim of bringing about specific change on the issues that matter most to us and our clients – from climate change to executive pay and diversity.
Our engagement with energy utilities companies on achieving a Just Transition continues to make good progress. In partnership with the Friends Provident Foundation, we have been supporting and working with energy and utilities companies to monitor and address the social impact of their climate goals.
In November 2020 SSE plc published its first Just Transition strategy, while E.ON issued its first Just Transition statement in March 2021. More recently, Centrica and EDF published their Just Transition strategies in October 2021, Scottish Power published its own strategy during COP26 in November 2021, and National Grid committed to publishing its Just Transition strategy by the end of the 2021.
We are continuing to work with these companies by providing them with feedback on draft strategies and examples of best practice. We are also committed to taking lessons from this engagement and applying it in other contexts. For example, we have leveraged our role as coordinator of the IIGCC Power and Heat Utilities engagement group to produce an investor expectations paper on the utility sector’s path to net zero.
* The term Net Zero means achieving a balance between the amount of greenhouse gases emitted into the atmosphere and the amount removed from it. The commitment is based on the expectation that governments and policy makers will deliver on commitments to achieve the 1.5°C temperature goal of the Paris Agreement. It also assumes this action does not contravene RLAM’s fiduciary duty to external investors. The commitment is baselined on the year 2020. It includes assets in funds managed and controlled by RLAM, but excludes segregated mandates managed on behalf of external clients, unless otherwise instructed.