- Emphasis on Stewardship
We fundamentally believe that asset owners bear a responsibility to engage with investee companies to drive better corporate behaviours which should also lead to better and more sustainable financial outcomes. That’s why we require, actively encourage and monitor the implementation of voting and engagement activities that our asset management partners carry out on our behalf.
We’ll continue to deploy our stewardship activities principally through a delegated model via our asset management partners and through collaborative industry endeavours such as Climate Action 100+. We’re investing to expand our own Stewardship function to enhance our Stewardship framework.
- Membership of leading collaborative endeavours
A core part of our strategy is to proactively contribute, lead where appropriate and collaborate in initiatives focusing on responsible investment activities and those with a climate focus. Phoenix is a signatory of the following initiatives:
- UN-supported Principles for Responsible Investing (PRI)
- Net-Zero Asset Owner Alliance (AOA)
- Institutional Investors Group on Climate Change (IIGCC)
- Climate Action 100+
- Task Force for Climate Related Financial Disclosures (TCFD)
- Science Based Targets initiative (SBTi)
- ABI Climate Change Roadmap
- Sustainable Markets Initiative (SMI) Insurance Taskforce
These platforms allow us to support industry development to accelerate and drive longer-term change.
What we expect of our investment partners
Looking forward, Phoenix will only partner with investment organisations that are similarly committed to
achieving positive change.
How we expect our partners to embed ESG within investment management
We expect our asset management partners to fully embed and evidence responsible investment practices in their investment decision-making, risk-management and governance processes. Periodic reporting should have a dedicated sustainability focus, including transparent data on climate and wider ESG metrics.
How we expect our partners to address climate change
On climate change, we strongly encourage our partners to have their own net-zero commitments in place and to provide disclosures in line with TCFD recommendations. We look to our partners to support us in delivering our net-zero investment strategy and to provide innovative solutions as we look to decarbonise our investment portfolio and fulfil our net zero by 2050 pledge.
How we expect our partners to address stewardship
We require our asset management partners to employ and follow strong stewardship principles, to drive
targeted improvement on climate change and ESG issues. This includes:
- Exercising voting rights on our behalf at shareholder meetings.
- Engaging effectively with portfolio companies and, when necessary, escalating engagement to drive better long-term performance from the business as a whole.
- Engaging with investee companies to improve disclosure on environmental, social and governance factors with a particular focus on climate change.
- Reporting on voting & engagement activities, including the outcome of engagement.
How we encourage collaboration and seek commitment
We encourage thought leadership from our investment partners. We also promote and encourage investment partners to join us in collaborating in industrywide initiatives. We expect asset management partners to be a signatory to UN PRI and to adopt the UK Stewardship Code in tandem with other international stewardships codes where applicable.
How we hold partners to account
Sustainability plays a greater role when we evaluate investment partner capability. We consider this as being fundamental to our relationships with our asset management partners.
When selecting/reviewing asset management partners or investing in illiquid assets, we only seek to partner with organisations that demonstrate a high degree of ESG competency across all areas of our commitment as described above. As you would expect, in line with good governance, if any of our asset management partners fail to adhere to our minimum requirements they will be put on notice to improve within agreed timelines and on the understanding that both a cessation of new investments or, in extreme cases, a termination of the mandate may be required should they fail to improve as agreed.
To conclude, we are committed to playing our full part in contributing to society for the benefit of all our stakeholders. As our current and future partners, we are looking forward to working closely with you to help us meet our sustainability objectives to benefit society and to help people secure a life of possibilities.
