Our approach to investing your money responsibly

Investing your savings to target growth

When you save with The People’s Pension, we* invest your money mainly in bonds and shares to give it the best possible chance to grow. Investing in companies through purchasing shares or providing loans—has historically been one of the best ways to achieve long-term growth.

That’s why most of your savings with us are likely invested in businesses around the world.

How your pension savings can influence company behaviour

As a shareholder or bondholder of these companies, we can change how we invest and also influence corporate behaviour to drive positive environmental, social, and governance (ESG) changes in order to improve investment returns for our members.

This includes addressing issues like pollution, carbon emissions, and labour rights.

For us, responsible investment also means encouraging companies to operate more sustainably—for the benefit of both society and the world our members retire into.

Promoting responsible business practices to protect and grow your savings

We believe that companies that fail to manage ESG issues effectively can negatively impact both financial returns and broader social outcomes for our members.

In contrast, well-governed companies that actively manage ESG risks across everything they do are better positioned for long-term growth—helping to grow your savings over time.

Ultimately, our responsible investment approach is designed to protect and grow the value of your savings while also encouraging companies to behave in a more sustainable and socially responsible way.

How do we go about investing in a responsible way?

Our ‘Responsible investment policy‘ sets out how we use our scale and influence as one of the largest UK asset owners to help drive change on responsible investment issues.

It includes our expectations of our asset managers – third-party investment specialists we partner with to invest your savings – with a focus on 3 main issues: climate change, nature and human rights.

We’ve built our approach around 3 key pillars:

• Investment portfolio construction – How we invest the portfolio.
• Stewardship – How we work with companies and other stakeholders on ESG issues.
• Reporting – How we publicly report and engage on what we are doing.

Our Responsible investment policy in action

Our responsible investment approach is helping to drive positive change in the portfolio. By applying the 3 pillars – portfolio construction, stewardship, and reporting – we’re making the following progress:

• Investment portfolio construction – We’ve shifted 70% of our Global Investments (up to 85% shares) Fund to ‘climate-aware’ strategies, reducing exposure to climate risks and prioritising businesses that are preparing for a low carbon economy.
• Stewardship – We’ve set clear expectations for high-impact sectors like energy, autos and banks, where we push for things like science-based emissions targets, detailed decarbonisation plans, and improved board oversight. Our asset managers drive engagement through dialogue and voting which we assess them on based on our expectations and guidelines
• Reporting – We provide transparent annual updates on climate progress using globally recognised frameworks and are continuing to develop our approach to producing member summaries when we update our responsible investment documents.

A future worth retiring into

Over the long-term, we’re aiming to gradually reduce the greenhouse gas (GHG) emissions (like carbon dioxide and methane that trap heat in the atmosphere, contributing to global warming) of our members’ investments, targeting net zero GHG emissions by 2050. When looking at ESG issues, prioritising climate change because of the long-term risk it poses to your pension pot.

We will always strive towards safeguarding the returns you need for retirement but also, to the degree possible, encourage better company behaviour relating to the environment, climate, and human rights that are essential to a happy retirement.