Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Governance
• Social

Environmental Achievements

• Achieved 86% portfolio coverage for Carbon Intensity measurement by market value.
• Set a pathway to net-zero emissions across the business by 2050.
• Aimed for a 20% reduction in portfolio Carbon Intensity by 2025.
• Planned to become carbon neutral in its own operations by 2023.
• Switched to 100% renewable electricity for its offices by the end of 2021.

Social Achievements

• 92% of employees reported being proud to work at Rothesay (2020 employee engagement survey).
• Maintained employee wellbeing initiatives during the COVID-19 pandemic, including providing a £1000 grant for home office improvements.
• Achieved 80% of calls answered within 30 seconds or less in call centers.
• 95% of policyholders rated service as 'good' or 'excellent'.
• Contributed over £4.1m to charitable causes in 2020.

Governance Achievements

• Established a Climate Change Working Group with representation from all business units.
• Embedded climate risk into business and risk management processes by the end of 2021.
• Maintained a strong Board with effective committee structure.
• Published a Modern Slavery statement as required by the Modern Slavery Act 2015.
• Implemented a risk-based approach to preventing financial crime.

Climate Goals & Targets

Environmental Challenges

• Limited data availability for Scope 3 emissions and some sectors.
• Challenges in assessing the temperature alignment of various companies.
• COVID-19 pandemic impacting office operations and data collection.
• Limited availability of green investments meeting strict credit and risk criteria.

Mitigation Strategies

• Used Trucost data covering over 92% of the portfolio.
• Engaged with industry initiatives to improve data collection.
• Implemented remote working and other measures to address COVID-19 challenges.
• Actively sought opportunities to fund green transition projects as the market develops.

Supply Chain Management

Responsible Procurement

• Requirement for cleaning suppliers to pay the London Living Wage.

Climate-Related Risks & Opportunities

Physical Risks

• Flooding (UK and Dutch mortgages)
• Wildfire (low risk in current portfolio)

Transition Risks

• Government regulations on energy efficiency (UK and Dutch mortgages)
• Changes in demand for oil and gas
• Regulatory curbs on vehicle emissions

Opportunities

• Investing in low-carbon economy projects (e.g., offshore wind).

Reporting Standards

Frameworks Used: TCFD, UN Principles for Responsible Investment

Environmental Metrics

ESG Focus Areas

• Investing responsibly
• Positive outcomes for stakeholders
• Running a responsible business

Environmental Achievements

• 50% reduction in the carbon intensity of our corporate bond portfolio by 2030
• Reduction in total portfolio WACI from 211 tCO2e/$m revenue (2020) to 183 tCO2e/$m revenue (2022)

Social Achievements

• Introduced dedicated Fertility, Men’s Reproductive Health and Women’s Healthcare service
• 91% of employees proud to work at Rothesay
• £5.6m pledged to charity in 2022
• Summer Cheer campaign with AgeUK and Iceland Foods supporting over 80,000 pensioners

Governance Achievements

• Acceptance as a signatory to the Financial Reporting Council’s UK Stewardship Code
• Establishment of the Customer Conduct Committee
• Enhanced ESG governance and management, including the creation of a dedicated ESG team

Climate Goals & Targets

Environmental Challenges

• Transitioning investment portfolio to net-zero GHG emissions by 2050
• Managing the varying rate of decarbonisation across asset classes and geographies
• Increasing employee turnover to 9.5%

Mitigation Strategies

• Developed a Net-Zero Transition Plan (to be published in 2024)
• Implemented a range of new employee benefits to foster an inclusive company culture
• Formal introduction of flexible working for all employees

Supply Chain Management

Supplier Audits: Annual reviews of critical and highly important suppliers

Responsible Procurement

• Introduction of a Supplier Code of Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: TCFD, UN Principles for Responsible Investment, UN-convened Net-Zero Asset Owner Alliance, Financial Reporting Council’s UK Stewardship Code 2020

Certifications: ISO 27001, ISO 23001

Environmental Metrics

ESG Focus Areas

• Responsible Investment
• Engaging to support positive change
• Running a responsible and sustainable business

Environmental Achievements

• 50% Carbon Intensity reduction across our total investment portfolio by 2030
• Material reductions in portfolio Carbon Intensity over the last three years, from 211 tCO2e/$m revenue in 2020 to 128 tCO2e/$m revenue in 2023

Social Achievements

• Industry-leading employee engagement score of 78%
• Decrease in employee turnover to 6.78% (2022: 9.5%)
• £7.7m pledged to charity in 2023
• Formation of Diversity and Inclusion (D&I) Executive Working Group
• 2,400 older people supported through Age UK's Benefit Entitlement Programme

Governance Achievements

• Met the requirements of the new Consumer Duty
• Robust governance framework with dedicated committees overseeing sustainability

Climate Goals & Targets

Environmental Challenges

• Pace of decarbonisation varies across asset classes and geographies
• Challenges in determining whether engagement activities cause issuer action
• Incomplete disclosure by issuers on Scope 3 emissions
• Increased weighting to illiquid assets in schemes’ investment portfolios

Mitigation Strategies

• Work started on Net Zero Transition Plan, modelling sector decarbonisation
• Continued engagement with issuers, even with no response
• Focus on Scope 1 & 2 emissions for portfolio Carbon Intensity reporting
• Established an Illiquid Asset Transition team to provide solutions

Supply Chain Management

Supplier Audits: Annual reviews of critical and highly important suppliers

Responsible Procurement

• Supplier Code of Conduct
• Requirement for modern slavery statements
• London Living Wage for cleaning personnel

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 27001, ISO 22301

Awards & Recognition

• Impact on Customer Experience Award at the Pensions Management Institute Pinnacle Awards