Our sustainability themes act as guiding principles for the way we work and invest your money.
We believe the companies we invest in should demonstrate the same values.
When we’re investing your money, we look at companies taking steps towards gender equality. Although attributing a company’s financial performance to their gender equality efforts isn’t so straightforward, we believe those who take steps to bridge inequality tend to outperform companies that ignore, or worsen it. These companies tend to:
Companies with a strong performance can translate to improved investment performance over time.
According to the European Institute for Gender Equality, improving gender equality would lead to an increase of GDP per capita by 6.1 to 9.6% by 2050, which amounts to €1.95 to €3.15 trillion in the EU.
Additionally, it would lead to 10.5 million more jobs, which would benefit both women and men.
In countries where gender equality is improved, they can expect an increase in GDP of about 12% by 2050.
Find out more about our ongoing efforts to close the gender pensions gap.
‘[“A living wage”] is the wage rate necessary to ensure that households earn enough to reach a minimum acceptable living standard as defined by the public’
– UK Living Wage Foundation
In the UK, the minimum wage is set by government, which the government has named the ‘national living wage’. The ‘real living wage’ is set by the UK Living Wage Foundation, and is the definition NOW: Pensions adheres to when measuring a company’s living wage efforts.
| National Living Wage | Real Living Wage | |
| What is it? | £9.50 | £10.90 across the UK, £11.95 in London |
| Is it the law? | Yes | No |
| Which age group does it apply to? | 23 and older | 18 and older |
| How is it set? | Set by the UK Government | Set by the UK Living Wage Foundation according to the cost of living (based on household goods and services) |
Across our investment portfolio, we monitor risks and opportunities associated with living wages. Although a company’s financial performance can be affected by many factors, we do believe that companies taking steps towards better equality, on average, outperform those that ignore or worsen the issue.
Experience a more engaged and diverse workforce which leads to better decision-making
Be better at people management and retaining happy employees
Be less exposed to reputational issues
Experience client and customer loyalty contributing to more growth, competitiveness and productive capacity, particularly over the long-term
Be less exposed to regulatory intervention.
The way we invest your money could support climate targets. We believe that a speedy and fair transition to a low-carbon economy is the only way to meet these targets. Climate action is likely to be the biggest change to the current global economy in our lifetimes.
To achieve our commitments, our approach is to stay invested and influence the companies we invest in to align with climate action targets. That said, we judge investments by their real-world impact. We judge some investments as too risky however well they perform, especially if there are systemic issues such as climate change or respect for human rights. This means we’ll exclude some investments where we think impact is too damaging.
Again, it’s not always straightforward to attribute the financial maturity of a company, we still believe companies that take steps to address climate change will, on average, outperform companies that ignore or worsen it.
Read our Task Force on Climate-Related Financial Disclosure and summary, setting out our metrics, scenarios and targets to help manage climate change-related risks and to meet net zero commitment.
To find out more about how we invest your money, see our Statement of Investment Principles.
We believe that effective stewardship can improve member outcomes. Read our Stewardship policy.
