Investing for good

Rebuilding the economy through our fight against climate change

Our 2020 Climate Report, in line with the Task Force on Climate-related Financial Disclosures, explains our role as a business committed to the Science Based Target initiative and focuses on the need for – and our contribution to – a green, post-pandemic recovery

22 Mar 2021

Simplified, inclusive capitalism means building a better society for everyone – and we don’t believe this can be done without tackling the climate crisis. By investing in long-term assets that look to reduce the planet’s carbon footprint, and aligning our strategy with the United Nations Sustainable Development Goals, we can build a decarbonised society that will be in a better state for generations to come.

Our new Climate Report, in line with recommendations from the Task Force on Climate-related Financial Disclosures (TCFD), looks at what we achieved in 2020 and how we can continue to achieve our goals. (This is also referenced in our Annual Report - click here for the Annual Report Quick Read 2020.) Despite the challenges of 2020, a global pandemic didn’t hinder our efforts in tackling the climate crisis – in fact, it reaffirmed the importance of managing our relationship with the environment.

Our Climate Risk Policy Statements set out how we plan to tackle the crisis, and focus on five key areas:

  1. Decarbonising the assets on our balance sheet to align with the Paris Agreement of limiting global warming to 1.5°C
  2. Advocating for urgent climate action from governments and companies we invest in
  3. Using our influence as a large investor to promote a transition to a low-carbon economy
  4. Supporting the goal of carbon neutrality by 2050
  5. Committing to the Science Based Target initiative (SBTi)

We will deliver on our policies through investing our proprietary assets, using our position of influence as one of the world’s largest asset managers, and the way we operate our business.

What have we achieved?

The benefit of having a history in tackling climate change means that our TCFD Report documents our commitments over the next five to ten years, but also what we’ve tangibly achieved since we added climate change as one of our six growth drivers.

To date, we have invested £1.4 billion into renewable energy projects.”

In 2020 alone we invested a 36% stake in sustainable heating alternative company The Kensa Group (following our investments in electric-car recharging infrastructure provider Pod Point and clean fusion energy provider Tokamak Energy), our Investment Management business rated c.1,000 companies under our Climate Impact Pledge and was ranked top among asset managers for engagement on climate change, further developed our climate risk model Destination@Risk, and reduced our Group operational footprint by 13% compared with the previous year. To date, we have invested £1.4 billion into renewable energy projects.

Commitment to the Science Based Target initiative

A particularly exciting development in 2020 was our commitment to the SBTi. We are now one of more than 1,200 businesses that have signed up to the initiative, validating our commitment to reduce our emissions in line with climate science and limit global warming to 1.5°C, in line with the Paris Agreement. This makes us accountable for our role in limiting the climate crisis.

Tackling the climate crisis: what next?

We have made no secret about our hope to be a leader in driving the post-pandemic recovery, both across the UK and where we have an international presence. We believe that addressing climate change will be integral to this recovery, and the scale and breadth of our business – from insurance to investment management to housebuilding – gives us multiple levels on which we can drive progress and deliver real change.

In 2021, the goals of our Climate Risk Policy Statements will remain at the forefront of our business. Our Real Assets business, for example, will continue to work towards completely eliminating carbon emissions from its real-estate portfolio by 2050 as part of its Net zero carbon roadmap. This includes a commitment for all new homes to be capable of operating at net zero from 2030. We will continue to advocate for action on climate change at a global and local scale: we will use our position as a large investor at the COP26 climate conference to advocate for market-wide policies to accelerate sustainable finance and a green recovery, and continue our Climate Change Virtual Accelerator, which tests viable, climate-friendly solutions that have been put forward by our environmentally conscious employees. 

Our TCFD report outlines our metrics and targets in detail. Download a copy of the report here.