Stewardship, Engagement and Remuneration Policy
Ark Life Assurance Co dac is part of the Phoenix Group. As a long-term asset owner, we at Phoenix act on behalf of our policy holders and shareholders to invest responsibly. We are committed to factoring Environmental, Social and Governance (ESG) matters into our investment decision making process. We will play a vital role in decarbonising the capital markets and financing the transition to a sustainable low carbon economy. Ark Life as part of Phoenix Group will comply with the investment philosophy and process being developed.
Our Areas of Focus
Strategy and Governance
We will work with our best-in-class asset management partners, including Irish Life Investment Managers (ILIM), to deliver our customers and stakeholders’ expectations. We will increase investment in assets that support a sustainable world, aligned with the UN SDGs, within the shareholder and policyholder business.
In 2020, Phoenix became a signatory to the United Nations- Supported Principles of Responsible Investment (‘UN PRI’). This demonstrates the Group’s commitment to including ESG factors in investment decision making and ownership. The UN PRI is the world’s leading proponent of Responsible Investment. It works to understand the investment implications of ESG factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions.
The governance for the development, implementation and monitoring of our Responsible Investment philosophy is managed by the Investment Committee. Our Investment Philosophy will be refreshed at least annually or more frequently if required. In order to allow a sufficient level of attention to Responsible Investment, a separate management committee to review ESG-related risks and opportunities across all portfolios is in place. This working group reports to the Investment Committee and the Group Board Sustainability Committee.
Within our Life Company websites, we provide further information to customers on how we incorporate ESG factors into investments processes.
Integrated ESG Management
We will continue to review and enhance ESG integration within our investment processes. We will embed best-in-class data analytics and capability to support us in this process.
We work with a network of asset management partners, all of whom are signatures to UN PRI. Initial due diligence as well as ongoing monitoring is vital to ensure that assets are managed in line with the Group’s philosophy and expectations. We require all our asset management partners to implement our approach to Responsible Investment and to integrate ESG considerations into their investment processes.
We have a dedicated and experienced team to undertake asset manager assessments. We have appointed external consultants to support us with the selection and monitoring of our asset management partners’ Responsible Investment processes. We are committed to continue and deepen this work ourselves.
As part of this assessment, we issue formal requests to enable us to gather necessary information. We not only review the policies and frameworks of the asset management partners, but equally, assess the factors affecting implementation. These findings are then presented to our governance committees. Asset Management Partners who fail to meet our minimum requirements will be put on notice to improve within agreed timelines or cessation or termination of mandate may occur.
Our Asset Manager partner ILIM’s Sustainability Risks Policy is available at: https://www.ilim.com/media/1706/sustainability-policy.pdf
Active stewardship is critical to the delivery of our ambitions, and to meet our net-zero commitment. As a large asset owner, we recognise our stewardship responsibilities and will adopt an “engagement first” approach with the objective of using our position of influence to bring about change. Inaction post sustained engagement will, however, ultimately lead to disinvestment.
For funds and portfolios where we set the investment strategy and guidelines we delegate to our asset management partners the responsibility for integrating shareholder engagement in the investment management and decision-making processes. We take into account the capability of asset managers to vote on our behalf as part of the manager selection process, and this is also formally delegated to them in the contract between them and us.
The delegated Stewardship responsibilities include:
- Monitoring resolutions and making sure that voting rights are carried out in line with investment objectives
- Engaging with companies they invest in and monitoring the investee companies on relevant matters
- Capital structure
- Social and environmental impact and corporate governance
- Escalating activities to the management of companies they invest in as necessary
- Acting collectively with other investors and shareholders, including communicating with those where relevant or necessary
Stewardship in Action
Our asset management partners on our behalf strive to use our influence as significant investors to achieve progress. In instances where our standards have not been met, divestment is both appropriate as responsible stewards of our clients’ capital and aligned to our goal of investing for better outcomes.
Decarbonising our Investment Portfolio
Phoenix are committed to decarbonising our investment portfolio and achieving net zero GHG emissions by 2050. To do this we will actively engage with decarbonisation alliances, initiatives and policy makers. In addition, we will enhance our internal capability by acquiring and developing tools to perform portfolio analysis using best in class metrics, taking into account both physical and transitional risks.
This is consistent with the objective of limiting the temperature rise to no more than 1.5°C above pre-industrial temperatures and is in line with the Paris Agreement.
We recognise that there are many considerations in delivering this target and out immediate focus is on our equity and liquid credit portfolios.
For more information on how we Foster Responsible Investing please see link to Phoenix Group Sustainability Report 2020.
Phoenix Group Remuneration Policy
Sustainability is at the heart of our business as a key strategic priority. We align our performance goals to our Phoenix one team goals. Our targets are closely aligned to these goals of being a customer obsessed, purpose led organisation led by a diverse and talented workforce all connected by common values.
A reward framework, remuneration policy and best practice is established and regularly reviewed by the Remuneration Committee against a board approved terms of reference. Remuneration must be competitive enough to motivate, retain and attract quality staff.
Our Annual Incentive Plan performance measures are based on the achievement of strategic (including sustainability), personal and business performance goals. Long term Incentive Plans are also offered to business and executive leadership over a 3-5 year outlook. This helps us to be the “best place our colleagues have ever worked” which is core to achieving our sustainability aspirations.