Signatory to the UK Stewardship Code
We're delighted to announce that we've been accepted by the Financial Reporting Council (FRC) as a Signatory to the UK Stewardship Code.
The Code is a set of voluntary principles that aims to improve the quality of stewardship practices by asset owners, managers and service providers. To become a Signatory, organisations must clearly demonstrate that they have exercised effective stewardship over the previous 12 months through good governance and active engagement which has helped to generate long-term positive impacts for the economy, the environment, and/or society.
This step further marks our commitment to be one of the top 25% of responsible businesses in the UK by 2025. And we're committed to playing our part in strengthening stewardship practices across the industry.
Listen to our CEO, Mike Holliday -Williams, Chief Investment Officer Tim Orton and Head of Responsible Investment Hilkka Komulainen, share their reactions to this great news.
2022 Responsible Investment and Stewardship Report
We’ve published our Responsible Investment and Stewardship Report for 2022 as part of our commitment to the 2020 UK Stewardship Code. Our inaugural report provides concrete examples of how we’re committed to helping our customers grow their savings over the long-term and contribute to a more sustainable world.
The full report includes detailed sections on these topics:
- Our sustainability and stewardship approach
- The ways in which members’ interests inform decisions
- How governance guides effective stewardship
- The integration of ESG across asset classes, oversight of asset managers, voting and engagement approaches, and efforts made to address systemic risks
This report is an important milestone in sharing our progress in 2022 and our direction of travel. We look forward to engaging more closely with our customers, regulators and other stakeholders as we enter the next stage of our stewardship journey as a Signatory to the Code.
Mike Holliday-Williams, CEO
Although 2022 was a year of significant acceleration, we recognise that there is no room for complacency. We hope this report makes clear how we are determined to become ever-better stewards. We look forward to detailing our progress in the 2023 report.
Tim Orton, Chief Investment Officer
Report’s highlights
Aligning our investments in response to systemic risks
Our investment assets are broadly in passives, as with much of the pension default strategies across the UK’s defined contribution pensions. While historically funds which track market-cap indices are most common, we have £16.6bn (as at March 2023) of assets into passive strategies screened and tilted for ESG across our workplace default strategies.
Expanding our influence and monitoring of our strategic asset managers
Manager oversight forms an instrumental part of our investment strategy to influence corporate behaviour and create a positive impact. The report outlines examples of outcomes contributed to as a result of our manager engagement, such as our largest asset manager setting a climate objective for one of our key funds.
Enhancing our voting and engagement approaches
Voting and engagement represents one of the most powerful levers at investors' disposal to drive real-world outcomes across the economy. In 2022, we expanded our engagement themes to include biodiversity and human rights, as well as introduced our 'expression of wish' approach looking to increase value alignment by asset managers.
Engaging with collaborative engagements and policymakers
Collaborative and policy engagement constitutes a critical part of our approach in managing systemic risks, to which our portfolio is exposed as a universal owner. Over the past 12 months, we led or participated in a number of industry initiatives, including the Department for Work and Pensions (DWP) Taskforce on Social Factors and the Institutional Investors Group on Climate Change (IIGCC) Asset Owner Working Group.
Embedding sustainability in everything we do
Change starts at home, and we aim to ‘walk the talk’ on the standards we expect from our asset managers and investee companies. In 2022, cross-team discussions on corporate governance, diversity and inclusion and responsible procurement among other topics helped to build alignment between our investment stewardship work in the UK and internal developments.
I am delighted to be publishing our first Responsible Investment and Stewardship Report showcasing our efforts to act as a responsible steward of customer assets. As a long-term savings provider our business model is one of long-term investing. With over 4 million customers with an average age of 45, we will be investing on behalf of our customers for decades to come. Continuing to evolve and develop our approach to stewardship and systemic risk across our business including our responsible investment activity is an essential part of our fiduciary duty.
Hilkka Komulainen, Head of Responsible Investment
Aegon embraces the responsibility it has as a responsible owner across its investments. Our goal to be in the top 25% of responsible business in the UK by 2025 is a good example of this, with our plan for our default funds to reach net zero by 2050. We are committed to driving positive outcomes for customers using effective stewardship. This includes meaningful and effective interventions in direct and collective engagement activities, and thoughtfully exercising our voice on ESG issues where we feel it will have material impact.
Samantha Chew, Stewardship Lead
Listen to our CEO, @Mike Holliday -Williams, Chief Investment Officer @Tim Orton and Head of Responsible Investment @Hilkka Komulainen, share their reactions to this great news.