How we manage our Ethical Engagement Policy

Representing our customers' ethics

The decision to adopt a customer-led Ethical Engagement Policy was a major step for us.

It meant going into uncharted waters because we were the first insurer in the world to do it.

Before doing anything, we asked our customers what they thought of the idea and 44,000 took the opportunity to respond. Their comments have helped to shape the Ethical Engagement Policy set out on this website.

Since we recognise that people's concerns change over time, we are committed to regularly re-appraising our customers' views and updating our Policy accordingly.

Responsible investments: investing for value, engaging for change

Our Responsible Shareholding team implements our ground breaking Ethical Engagement Policy across all the companies in which we invest. Company performance on corporate governance and social, ethical and environmental management is analysed to identify where good of bad management of an issue may impact upon share price, and to identify where a company's practices conflict with our customers' ethical concerns.

The Co-operative Asset Management is a signatory to the UN Principles for Responsible Investment (UNPRI). The UNPRI is a voluntary code for investors aimed at raising awareness of corporate and environmental responsibility. It is a set of six environmental, social and corporate governance guidelines, supported by 35 possible actions, designed to guide institutional investors towards responsible investment. It also aims to encourage engagement with companies to lead them on a "path of continuous improvement".

Read about examples of the many projects we've been working on, from protecting workers in China to promoting wind power and campaigning against excessive pay for top directors.

View our approach to responsible investment in practice

Responsible shareholding PDF 0.8Mb

Applying the Policy to our investments

Our Ethical Engagement Policy does not mean we refuse to invest in certain business activities; e.g. animal testing. It means that we will invest in most companies, but we will seek to use our influence as a shareholder to try and improve the ethical performance of these businesses in line with our customers' views.

Take the issue of child labour, for example

If a company in which we invest is found to be using child labour, we will try to resolve the situation using our influence as a corporate shareholder. Primarily this is through:

• private meetings with senior management
• voting at the Annual General Meetings (AGMs) of companies
• correspondence with the company urging change.

We use commercial arguments too

As well as basing our views on ethical grounds, we also believe that such practices could impact on that company's long-term financial performance. For example:

• a media campaign could impact on the company's reputation
• a consumer boycott could impact on sales as well as reputation
• litigation could arise, which could have financial repercussions for the company.

Our successes and failures are all out in the open

We are completely open in how effective we have been in actively promoting our customers' ethical concerns through our investments.

This is why:

• we vote on every shareholder resolution that is put before us by every company in which we invest
• we make all such voting decisions available on this website
• we commission an annual audit of the implementation of the Policy from an external, independent organisation
• we report back to customers on the implementation of the policy and the audit findings, in a 'warts and all' fashion, in The Co-operative Group's annual Sustainability Report. View our latest report.