LifeSight’s commitment to tackling deforestation
LifeSight is supportive of the Race to Zero Financial Sector Commitment on Eliminating Agricultural Commodity-Driven Deforestation by 2025. Deforestation is a critical environmental and social issue. Tackling deforestation is a necessary piece of the complex jigsaw as we collectively tackle climate change.
LifeSight’s approach at a glance:
Our overarching approach
- Our members’ pension money is building a better future, for them and the world they’ll retire into. That’s because we focus on sustainable investment.
- Companies that are well-run, and respect people and planet, are more likely to do well in the long term. Our sustainable investment approach means our members’ money is more likely to grow in the long term.
- Our members’ money is invested in companies around the world, and we use our collective power to influence those companies and to engage with regulators and key industry groups to make system-wide improvements.
How this relates to deforestation
Some specific steps we’re taking around deforestation are:
- We support the ambitions of the Race to Zero Financial Sector Commitment on Eliminating Agricultural Commodity-Driven Deforestation by 2025, and will aim to meet this objective by using the collective influence of our scale, and working with specialist professional partners.
- We have sustainable investment ambitions, beliefs and policies, which encompass a broad range of important ESG issues, including deforestation – these are set out clearly in our Statement of Investment Principles (SIP).
- We use specialist partners who share our values and beliefs to influence the actions of companies and governments through the use of shareholder voting, company engagement and driving forward key industry initiatives. They’ve explicitly signed up to the Race to Zero pledge on eliminating agricultural deforestation by 2025. We’ve specifically challenged them to vote and engage in ways that will help achieve these deforestation goals and demonstrate the actions and influence they have. We’ll continue to monitor and engage with them regarding progress on this and other important ESG issues and hold them to account.
LifeSight and deforestation: a deeper dive
Race to Zero Deforestation
We are supportive of the Race to Zero Financial Sector Commitment on Eliminating Agricultural Commodity-Driven Deforestation by 2025.
https://racetozero.unfccc.int/system/nature-and-tackling-deforestation/
Deforestation is clearly a critical environmental sustainability and social issue. Tackling deforestation is a necessary piece of the complex jigsaw if we are collectively to tackle the broader issues of climate change and biodiversity loss. How it is tackled can also have significant positive or negative consequences for social equality and inequality.
Conversely, not tackling these interconnected fundamental Environmental, Social and Governance (ESG) issues, including deforestation, will have negative real-world environmental and socio-economic consequences. Such an outcome would not be in the financial or broader long-term interests of our members.
What we are doing about it
We are committed to use the scale and position of LifeSight as a leading master trust, as well as the broader scale and influence of the WTW, to contribute to creating a sustainable future for society and the planet, which is clearly in the direct financial interests of our members.
In particular, our position and action plan on deforestation follow from the structures we have put in place to ensure that the guiding principles in our SIP are translated into practice:
| Guiding general principle | Practical link to deforestation |
We believe that the returns our members need over the long-term can only come from a socio-economic system that works effectively | Deforestation is a threat to a sustainable socio-economic system and hence needs to be addressed |
We have singled out climate as a key risk to prioritise and have set a Net Zero emissions target | In order to achieve this, deforestation is one of many issues that needs to be addressed urgently |
In general, we have a strong preference for responsible ownership and stewardship*, as opposed to divestment and exclusion | This aligns with the Race to Zero Deforestation initiative which expects deforestation-free portfolios to be achieved principally through active ownership and ongoing stewardship |
The ongoing management of the two key building block funds underlying all our investment strategies – LifeSight Equity and LifeSight DGF – has been delegated to WTW’s specialist Fiduciary Management team (who have a key focus on sustainable investment) | WTW is an active, leading participant in numerous industry-wide sustainability initiatives, including identifying and engaging with specialist investment providers with strong ESG-integrated investment processes, covering issues such as deforestation |
We have employed EOS at Federated Hermes (EOS) (a specialist market-leading ESG engagement group) on top of Legal & General Investment Management (LGIM, our primary underlying investment manager, with a strong focus on climate change in particular) to engage with the companies we invest in on all material ESG issues | Both Federated Hermes and LGIM have signed up to the Race to Zero Deforestation Commitment. We’ve also challenged them both specifically to vote and engage in ways that will help achieve these deforestation goals and we’ll continue to hold them to account regarding the actions they’re taking and the influence they’re having. |
* Stewardship means working to reduce negative environmental, social and governance (ESG) impacts through use of voting, company engagement and driving forward key industry initiatives
How deforestation fits with our wider ESG ambitions
Many ESG issues such as climate change, deforestation, biodiversity, clean oceans, public health, inequality, human rights and more are complex and interlinked.
We invest across thousands of different issuers on behalf of our members and we believe our approach of combining specialist service providers is the best way to implement our ambitious sustainability policies.
In particular, we believe that these specialists are best placed to determine how different companies and/or issues are prioritised for engagement, what engagement milestones are set, and how engagement is escalated should a group not respond satisfactorily.
We believe the approach set out above is the best way that we, as a leading UK master trust, can maximise our ESG influence across a broad range of areas, including but not limited to deforestation.
Further information
Further information on LifeSight’s overarching approach to sustainable investment can be found in the following documents:
