Climate Change Data

Environmental Metrics

ESG Focus Areas

• Corporate Responsibility

Environmental Achievements

• Reduced landfill waste from 36% to 4% in Wythall since 2012
• London office generates no waste to landfill

Social Achievements

• Increased policyholder payments through inherited estate distribution totaling £185 million
• Reintroduced annual bonus payments in many funds
• Prevented £22 million of transfers to fraudulent schemes in 2014
• Improved speed of customer payouts and servicing complaints, increasing overall satisfaction rate to 4.65 on a 5-scale rating
• Employee engagement score of 78%, a 2% increase compared to 2013

Governance Achievements

• Reduced gearing significantly, supporting the aim to achieve an investment grade rating
• Completed comprehensive debt refinancing
• Successfully completed the sale of Ignis to Standard Life Investments
• Full compliance with the provisions of the UK Corporate Governance Code

Climate Goals & Targets

Environmental Challenges

• Uncertainty surrounding the transition to Solvency II
• Changes in the retirement marketplace
• Rise in pension scams
• Continuing decline in yields on UK government debt

Mitigation Strategies

• Implemented de-risking strategies
• Maintained cash buffers in holding companies
• Improved counterparty monitoring processes
• Entered into a reinsurance contract to manage longevity risk
• Developed contingency plans for Solvency II
• Made changes to retirement processes to account for changes, including providing appropriate risk warnings to customers
• Worked with partners to prevent transfers to suspicious schemes

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Deliver for our customers
• Foster Responsible Investment
• Reduce our Environmental Impact
• Be a good corporate citizen

Social Achievements

• Improved customer outcomes across majority of metrics from 2018; over 12 million online customer logins and over 5.5 million Standard Life mobile app sessions.

Climate Goals & Targets

Environmental Challenges

• Poorer performance across retail business, including Wrap SIPP, reflecting the tail off in Defined Benefit to Defined Contribution pension scheme transfers and reduced inflows seen across the sector from market uncertainty.

Mitigation Strategies

• Strong flows into our drawdown product year on year; strong performance in workplace pensions, delivering over 60% of 2019 incremental long-term cash generation; auto-enrolment increased from 5% to 8%.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Delivering for our customers
• Fostering responsible investment
• Reducing our environmental impact
• Investing in our people and culture
• Supporting our communities
• Working responsibly with suppliers

Environmental Achievements

• Reduced scope 1 and 2 emissions from occupied premises per full-time employee intensity by 0.5 tonnes CO2e/FTE in 2020 from a 2019 baseline of 1.7 tonnes CO2e/FTE.
• All legacy Phoenix UK sites are now supplied with 100% renewable electricity.

Social Achievements

• Launched ‘Flourish at Phoenix’ to support colleagues’ growth and development.
• Achieved 75% overall colleague engagement score.
• Became a fully accredited Living Wage Employer.
• Launched ‘Who We Are’ app to capture diversity data.
• Donated over £2 million to registered charities.

Governance Achievements

• Established a Board Sustainability Committee.
• Became a signatory to the UN PRI.
• Implemented the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Climate Goals & Targets

Environmental Challenges

• Data gaps in calculating full scope 3 emissions, particularly for the investment portfolio.
• COVID-19 pandemic impacting fundraising and volunteering opportunities.
• Growing financial fraud and pension scams.

Mitigation Strategies

• Working to better understand the carbon impact of investments and supply chain.
• Adopting additional ways to support charities, including online fundraising and resource donations.
• Increased communications with customers on scams and called for an amendment to the Pension Schemes Bill.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• Sustainable Supply Chain Standards

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: TCFD, UN PRI, SBTi

Certifications: Living Wage Employer

UN Sustainable Development Goals

• Goal 1
• Goal 4
• Goal 5
• Goal 8
• Goal 11
• Goal 12
• Goal 13

The report highlights how various initiatives contribute to these goals.

Sustainable Products & Innovation

• ESG default fund

Environmental Metrics

ESG Focus Areas

• Investing in a sustainable future
• Engaging people in better financial futures
• Building a leading responsible business

Environmental Achievements

• 34% reduction in operational emission intensity (2021 versus 2020)

Social Achievements

• Launched Phoenix Insights, a new think tank focused on the possibilities of longer lives
• Launched MoneyMindset, Homebuyer Hub and Voice Your Investment View initiatives to improve financial understanding and engagement
• Engaged 84% of key suppliers on climate change

Governance Achievements

• Published Group stewardship framework
• Achieved 7.5 out of 10 average colleague engagement score

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic presented challenges to business and the UK as a whole
• Need to move quickly to reform regulatory and policy regimes to enable capital to flow into net zero and sustainable solutions

Mitigation Strategies

• Implemented agile working approaches
• Working with the Treasury and PRA to reform Solvency II regulation

Supply Chain Management

Supplier Audits: 84% of key suppliers engaged on climate change

Responsible Procurement

• Sustainable supply chain standards
• ESG Supplier Open Letter

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: TCFD

Third-party Assurance: EY

UN Sustainable Development Goals

• Goal 4
• Goal 5
• Goal 8
• Goal 9
• Goal 10
• Goal 11
• Goal 12
• Goal 13
• Goal 14
• Goal 15
• Goal 17

Sustainable Products & Innovation

• Standard Life Sustainable Multi-Asset Solution
• Lifetime Mortgage products

Awards & Recognition

• UK Top Employer for ten consecutive years
• Pennies from Heaven Award Gold

Environmental Metrics

ESG Focus Areas

• Climate change
• Nature and biodiversity
• Financial wellness and inclusion
• Longevity and evolving demographics

Environmental Achievements

• 80% reduction in operational carbon emission intensity since 2019 (market-based)
• 82% of key suppliers committed to SBTi or Race to Zero targets
• £1bn origination of sustainable investments in shareholder funds
• c.£15bn assets and c.1.5m customers transitioned to Sustainable Multi Asset Default solution

Social Achievements

• Launched financial inclusion strategy, with an initial focus on mid-career women
• 1.2m customers offered chance to review digital literacy material
• Mid-life MOT pilot launched for colleagues
• 42% of colleagues involved in community engagement activities

Governance Achievements

• Alignment to the UK Stewardship Code in readiness for full certification in 2023
• Data gathering framework and tracking established for listed equity and credit where we exercise influence and control
• 0 bribery breaches in 2022
• 0 significant cyber-related incidents over 2022

Climate Goals & Targets

Environmental Challenges

• Under saving for retirement and the implications of longer lives
• Climate change and its financial risks for customers and the wider UK economy
• Nature loss and its interconnectedness with climate change
• The cost of living crisis impacting customers, colleagues, and communities

Mitigation Strategies

• Developing solutions that empower customers to confidently manage daily expenditure and unexpected costs
• Decarbonising investments, operations, and supply chain; investing in climate solutions; advocating for action and system change
• Developing a nature action model focusing on investment, engagement, and reducing impact
• Providing targeted support to customers, colleagues, and communities through financial assistance, resources, and community engagement

Supply Chain Management

Supplier Audits: 82% of key suppliers committed to SBTi or Race to Zero targets

Responsible Procurement

• ESG Supply Chain Standards
• Supplier Code of Conduct
• Modern Slavery Act compliance

Climate-Related Risks & Opportunities

Physical Risks

• Physical risks of climate change

Transition Risks

• Transition risks of climate change

Opportunities

• Investment opportunities in climate solutions

Reporting Standards

Frameworks Used: TCFD, UNGC, SASB, PCAF, TNFD

Certifications: ISO 27001 (for specific office and processes)

Third-party Assurance: Ernst & Young LLP (limited assurance on selected climate-related disclosures)

UN Sustainable Development Goals

• Goal 7
• Goal 9
• Goal 11
• Goal 13
• Goal 17

Activities supporting the delivery of the indicated SDGs are noted throughout the report.

Sustainable Products & Innovation

• Sustainable Multi Asset Default Solution

Awards & Recognition

• Sustainable Investment Awards 2022 – ESG initiative of the year
• Terra Carta Seal
• Ranked 12th in the FTSE 100 by the Tortoise Responsibility100 Index
• A- CDP score increase from B

Environmental Metrics

ESG Focus Areas

• Climate change
• Nature and biodiversity
• Financial wellness and inclusion
• Longevity and evolving demographics
• Diversity, Equity and Inclusion
• Talent management

Environmental Achievements

• 83% reduction in operational emissions intensity since 2019
• 94% of key suppliers committed or aligned to SBTi or UN Race to Zero campaign
• Published comprehensive Net Zero Transition Plan
• Implemented decarbonisation strategy for c.£12.5 billion shareholder liquid credit portfolio

Social Achievements

• Launched ‘Let’s Start Talking’ campaign, reaching over four million people
• Provided over 1.5 million Standard Life customers access to Money Mindset app
• Reached 1.5 million customers to raise awareness about the impact of their investments
• Rolled out Midlife MOT to UK colleagues
• Rose from 24th to 14th in the Social Mobility Foundation Employer Index

Governance Achievements

• Published first Stewardship Report
• Became signatories to the UK Stewardship Code
• Achieved ISO14001 certification for Environmental Management System
• Achieved ISO45001 Occupational Health and Safety Management Systems certification
• Completed TNFD pilot

Climate Goals & Targets

Environmental Challenges

• Reducing business travel emissions
• Reducing supply chain emissions
• Achieving 2030 target of 50% emissions intensity reduction for all assets under control (dependent on actions by governments, regulators, and high transition risk sectors)
• Meeting the target of 40% women in senior leadership

Mitigation Strategies

• Implementing a programme to reduce emissions from business travel
• Engaging with suppliers on sustainability commitments
• Continuously expanding the scope of carbon footprint baseline
• Implementing customised equity benchmarks with a decarbonisation tilt
• Increased focus on creating gender balanced talent pipelines

Supply Chain Management

Supplier Audits: 73% of suppliers submitted disclosure to CDP; 98% of key suppliers published an up-to-date modern slavery statement

Responsible Procurement

• ESG Supply Chain Standards
• ESG risk factors integrated into Supplier Management Model
• Engagement on sustainability commitments

Climate-Related Risks & Opportunities

Transition Risks

• Transition risk affecting investment portfolio

Opportunities

• Investment in climate solutions

Reporting Standards

Frameworks Used: TCFD, PRI, UNGPs, OECD Guidelines, TNFD

Certifications: ISO 14001, ISO 45001, ISO 27001 (for specific office)

Third-party Assurance: Ernst & Young LLP

UN Sustainable Development Goals

• 4
• 5
• 8
• 9
• 10
• 11
• 13
• 14
• 15

Targets and initiatives aligned with various UN SDGs

Sustainable Products & Innovation

• Standard Life Pension Annuity
• SunLife Equity release mortgage
• Money Mindset app

Awards & Recognition

• CCA Most Effective Customer Vulnerability Strategy award (Standard Life)
• PCRF ‘Best use of innovation in employee engagement’ award
• Company of the Year – Global Good Awards
• Impact Company of the Year – Better Society Awards
• Ethical Financial Services Provider of the Year – MoneyAge Awards

Environmental Metrics

ESG Focus Areas

• Climate Change
• Human Rights
• Nature
• Controversies linked to UNGC breaches

Climate Goals & Targets

Environmental Challenges

• Significant transition, physical and legal risks to businesses from incorrectly managed net-zero emissions plans.
• Nature degradation at an unprecedented rate and scale.

Mitigation Strategies

• Supporting internationally recognised frameworks (TCFD, CA100+ Net Zero Framework, UK’s Transition Pathway Taskforce) to assess the credibility of companies’ transition plans.
• Engaging with companies to develop robust net-zero plans, including robust disclosure and evidence on climate change management.
• Expecting companies to prioritize the development and/or acquisition of high-quality carbon removal credits from nature-based solutions for offsetting residual emissions.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: TCFD, CA100+ Net Zero Framework, UK’s Transition Pathway Taskforce, TNFD