The way we invest your money aims to support the transition to a low-carbon economy. We believe the long-term benefits of taking action now far outweigh any potential short-term costs. We also believe that a speedy and fair transition to a low-carbon economy is the only way to meet these targets and will produce the best long-term financial outcome for our pension savers.
To achieve our commitments, we aim to support companies and governments in the transition to a low-carbon economy. This means we will continue to invest in companies that show willingness to adapt and seek to influence them to align with Net Zero targets. But we also judge investments by their real-world impact. Some investments, however well they perform, are too risky, especially if they don’t address things like climate change or respect for human rights. This means we’ll exclude some investments where we think their impact is too damaging or their exposure to financial risk is not being appropriately managed.
While it doesn’t guarantee good performance in the short term, we believe companies that take steps to address and adapt to climate change will, on average, perform better than companies that ignore or worsen it.