Resolution Life Group Holdings LP (“RLGH LP”), the ultimate holding entity of the Resolution Life Group, may invest only in life insurance entities and businesses (including reinsurance) in mature markets globally or companies providing services to life insurance entities in mature markets globally.
This limited investment remit means that to some extent adverse impacts on sustainability factors are limited – as an example, RLGH LP may not invest in fossil fuels, and we do not invest in countries which rate poorly on the transparency international index, which is a risk-mitigating factor for corruption and bribery.
Notwithstanding the above statement, environmental, social and governance (“ESG”) considerations are of key interest to the Group, and as a result we have revised our ESG policy in 2020, and formed a group wide ESG committee. The Group recognises that failures in ERG matters can lead to material financial and reputational impacts, and thus must be monitored and mitigated. As a result, in 2021 we plan to recruit an internal audit team, and one of the responsibilities of this team will be reviewing our compliance with internal ESG policies.
In line with our ESG policy, in making investment decisions, the Sustainability Factors identified under the Sustainable Finance Disclosure Regulation are considered, namely environmental, social and employee matters, and human rights, anti‐corruption and anti‐bribery considerations. In particular, we prioritise and identify additional principal adverse impacts by considering the scope, severity, probability of occurrence and potentially irremediable character on Sustainability Factors.
This is effected by taking the following actions as we consider a potential investment, without limitation:
- Purchasing data from MSCI on how the target business performs on the MSCI ESG index where this is available;
- Conducting due diligence on legal compliance, and in particular, compliance with laws on environmental, employment, and anti-corruption and anti-bribery legislation;
- Engaging directly with investee companies to understand adverse impacts on Sustainability Factors where sufficient information is not available;
- Seeking to mitigate adverse impacts following an investment, where it goes ahead.
Supervision of this process and ensuring the relevant associated reporting is submitted to the Investment Committee and the Board is the responsibility of the M&A Committee.
We expect our approach to due diligence will develop and become more sophisticated as our ESG policy is embedded Group wide. In particular, as our reporting in compliance with UNPRI and the United Nations Global Compact evolves, and as we improve our ability to identify and mitigate sustainability risks, we expect we will be able to more closely identify, measure and mitigate such risks.
Our Group ESG policy sets out high level objectives in relation to ESG, but we note that our individual platform businesses will have flexibility on prioritising which sustainability factors they consider most relevant to their business, and most in need of mitigation.
Although RLGH LP has a limited investment remit, the underlying insurance operating companies in which the Group invests have a wider exposure via investment in assets purchased to back our liabilities. The Group has prioritised working with asset managers to improve ESG performance, and requires quarterly reporting. We expect this to be a key focus during 2021.
Reporting on ESG performance, and developing objectives on an annual basis for mitigating principal adverse impacts on Sustainability Factors will be the responsibility of the ESG Committee.
Issued by: General Counsel
Date approved: 10th March 2021
Date for next revision: March 2022