Royal London Mutual Insurance Society (RLMIS)
Portfolio level
Portfolio level – Portfolio decarbonisation reference target
Baseline date: 31 December 2020
Baseline performance: 9.3MtC02e (associated with listed equity and corporate fixed income holdings which make up just over 60% of RLMIS assets as at 31/12/2020).
Target year(s): 2030, 2050
Target(s):
- -50% CO2e/$mn invested by 2030
- Net zero by 2050*
* Royal London’s climate targets are 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, and that the actions it takes does not contravene its fiduciary duties.
GHG scopes included: Data monitoring and disclosure is currently focused on Scope 1 and Scope 2.
Scope 3 emissions are included in Royal London’s assessment of transition readiness and informs engagement priorities.
Asset classes in scope: As at 31/12/2020:
95% of £114bn RLMIS assets are managed by Royal London Asset Management (RLAM) and are in scope for the purposes of climate target setting, this includes all asset classes.
The funds managed by external managers are currently out of scope but are monitored and assessed regularly.
Methodology/ net zero scenarios: RLMIS has adopted the Net Zero Investment Framework developed by the IIGCC and its targets are informed by the illustrative pathways (P1-P3) from the IPCC 1.5C Report.
Portfolio level – Investment in climate solutions target
Qualitative goal: This target is currently qualitative only.
- As an Asset Owner, RLMIS is committed to developing solutions that will enable its customers to invest in low carbon assets.
- Where appropriate RLMIS will seed and invest in the development of climate solutions created by RLAM.
Asset level
Asset level – Portfolio coverage target
Baseline date: 31 December 2020
Baseline performance: Not defined due to data limitations. RLMIS will set an alignment target following a review of all holdings.
Target date: 2030
Target: RLMIS has committed to engaging with companies on their ability and willingness to transition to inform its “alignment assessment”.
Where a company is unwilling or unable to take action to align, RLMIS will consider disinvestments, consistent with its overall net zero targets.
Asset level – Engagement threshold target
Asset classes in scope: RLMIS is focused on listed equity and corporate fixed income.
RLMIS has identified the key sectors which contribute to its financed emissions and have set engagement targets covering greater than 70% of emissions.
These include RLMIS’ Top 10 holdings (as an Asset Owner) which equate to 50% of its emissions as at 31 Dec 2020 and engagement with the Utilities sector as a key driver of wider economic decarbonisation.
Additional information
Methodology: RLMIS’ targets are informed by the illustrative pathways (P1-P3) from the IPCC 1.5C Report.
RLMIS has adopted the 50% reduction by 2030 as a starting point and has translated this into shorter term management targets to incentivise action in the near term.
The fairness concept and the impact on targets will be reviewed annually.
Further work: RLAM has undertaken extensive work to assess its property holdings and has developed a net zero strategy. Royal London will begin incorporating this information into its disclosures as soon as is practicable, consistent with its overall net zero targets.
Royal London has also re-framed its Purpose and supporting Strategy to include: ‘Playing our part in moving fairly to a sustainable world’.
Operational emissions: Royal London has committed to achieving net zero direct operational emissions by 2030 (Scopes 1 and 2).
RLMIS’ targets and the progress it has made are detailed in its 2021 annual report and accounts (p.30-40).
Royal London Mutual Insurance Society (RLMIS) case studies