Our Environmental, Social, and Governance (ESG) Approach
The Trustee, guided by our investment experts, aims to invest your pension savings responsibly. We focus on creating long-term value and managing risks.
Responsible screening
Our approach to managing environmental, social and governance risks involves a limited amount of screening. We avoid investing in:
- Companies involved in controversial weapons
- Those on international sanctions lists
- Companies generating over 10% of their revenue from thermal coal activities, including mining and production.
The limited nature of our screening is intentional. We believe that engaging with companies, and encouraging them to improve their practices, is often more effective than simply excluding them. This way, we aim to drive positive change, while still responsibly seeking long-term investment returns.
Stewardship
We have a strong and well-established stewardship framework that allows us to represent your interests effectively across global equity and fixed income markets. Our approach is guided by clear principles. We aim to encourage responsible corporate behaviour, align our voting with investment beliefs, and support long-term resilience in the companies we invest in.
Delivered in partnership with Sustainalytics*, our stewardship programme focuses on three key areas:
- Global Norms and Standards Engagement
We engage with companies involved in serious or ongoing breaches of international sustainability standards. This includes environmental issues, human rights, labour practices, and ethical governance. - Thematic Engagement
We target sustainability themes that are shaping the global economy and align with the UN Sustainable Development Goals. These include biodiversity, climate transition, circular economy models, and human capital development. - Material Risk Engagement
We work with companies where ESG risks are either unmanaged or poorly disclosed. This includes issues like ESG governance, carbon intensity, corruption, product safety, and resource use.
We believe our stewardship efforts help to support risk-adjusted outcomes by promoting transparency, accountability, and sustainable growth. Through collaborative initiatives and active ownership, we aim to ensure that the way we invest members’ pension savings reflects the values of our members and supports their long-term financial goals.
*Sustainalytics is a provider of shareholder engagement services, and assists the Trustee with ensuring companies which the SEI Master Trust invests in are held accountable on ESG issues via proactive engagement.
Selecting investments carefully
We look closely at ESG risks when choosing where to invest. When investing in equities, we analyse the extent to which ESG risks are accurately reflected in company share prices.
To help with this, we’ve built a model that tracks ESG issues to help us spot risks that aren’t properly reflected in market prices. This helps us to identify ESG risks that the market may be overlooking or under-pricing. Then, we can adjust our investments accordingly.
Every stock we consider is reviewed for both its potential return and its risks, including ESG risks.
We may also make use of carefully selected third-party managers to manage a portion of your investments.
When we do, we choose investment managers who meet our standards for responsible and sustainable investing. We check how well they integrate ESG factors into their investment decisions and give them a rating (Strong, Moderate, Limited, or Weak).
Only those who meet our expectations are chosen, especially for our sustainable fund options. We use ESG ratings – alongside financial checks – to help decide if an investment manager is right for our pension strategies. We want managers who aim to deliver strong financial returns and share our values around responsible investing. For some options, like our sustainable self-select funds, we set a minimum ESG standard to make sure they meet both financial and sustainability goals.