Our Responsible Investing Policy and Active Ownership Policy establishes our investment approach to integrating financially material Environmental, Social and Governance (ESG) risks and opportunities into investment decision making and stewardship activities.
Remember - ESG investing includes considering important, Environmental (the planet), Social (people) and Governance (how companies are run) factors as the companies we invest in are both dependent on and will be affected by these things in making profit.
Our approach
Our aim is to remain invested in global markets across diverse investment types aligned with our investment beliefs. This approach seeks to incorporate into investment decision making a broader view of the risks and opportunities that companies will need to navigate to be financially successful over the long-term.
Whilst the primary focus of our investment decision making remains to seek to achieve growth for investors over the long-term, we believe that a better way of investing is to include considering how companies are managing the broader risks and opportunities to their business and industry. These are non-financial risks and opportunities that could have an important financial effect on companies and require companies to incorporate sustainability (people and the planet) issues, for example climate change, in how they are running their business.
We believe that responsible companies will be better positioned to grow over the longer term, where they are aligning with international standards of corporate behaviour and positioning themselves to respond to our need to shift to a low carbon sustainable economy. Our approach moves away from investing in companies just based on their market size and growth outlook, to include shifting towards those companies in industries which are demonstrating they are including sustainability considerations that are relevant to their businesses in the way they seek to make profit.
There are some specific harmful activities that we will choose not to invest in, but generally we see greater opportunity in being broadly invested and using where possible the influence of being an investor to seek positive change rather than not investing in a specific sector or industry. There are likely to be some short-term differences in the growth of investments by being more selective about who we invest in, but we believe that over the long term the opportunities will be greater for those companies on the right path to a low carbon sustainable economy and less exposure to risks.
We recognise the importance of investor influence in being a responsible investor, and as effective stewards. Remaining invested in companies provides the opportunity to use investor influence such as engagement, voting rights and industry collaboration in the management of long-term risks and opportunities including those which are systemic, and sustainability related.
Our active ownership policy provides the guiding principles we have established for stewardship activities as part of our efforts to be a responsible investor.
Responsible Investing Policy
Our Responsible Investing Policy sets out our commitment as an investment manager, to integrate financially material ESG risks and opportunities into investment decisions. We believe in the power of strategic partnerships, which is why we work with Aberdeen Investments, our investment adviser. They manage our funds in line with our policy framework and guidance, ensuring our investments are both responsible and built for long-term growth.
Our policy focuses on:
- Responsible investing – integrate financially material Environmental, Social and Governance (ESG) considerations into investment funds in the way that manages risk, opportunities, the investment horizon and potential for returns.
- Sustainable investing – where compatible with risk and return, enable investment in sustainable practices and/or as part of the transition to a low carbon economy in support of positive change.
- Universal exclusions – screen investments to exclude companies within a criteria that represents international norms based on either science or global ethical standards.
- Investor communications – ensure clear understanding of our responsible investing approach.
- Investor values – consider investor sustainability preferences as part of our responsible investing approach.
- Fund Disclosures – investment fund performance information will include in our responsible investing approach.
- Investment Oversight – monitoring of our Investment Adviser to check alignment with our responsible investing approach and investment fund polices.
- Regulatory compliance – compliance with FCA rules on Sustainability Disclosure Requirements (SDR), including anti-greenwashing and customer disclosures.
- Industry standards – join industry bodies where beneficial as part of our responsible investing commitment and to enable industry collaboration.
- Liquidity – the integration of ESG factors must be in line with the management of liquidity risks.
What we invest in
We build responsible investing into our fund policies, integrating financially material environmental, social and governance (ESG) risks and opportunities into investment decisions.
We invest in:
- ESG Tilts – we use ESG scoring as a way of assessing how companies are considering specific environmental and social risks/opportunities in their industry and the governance in-place to manage these. Using ESG rating to score companies enables a tilt towards companies with better ESG scores (positive tilt) and away from poor ESG scores (negative tilt).
- Carbon Tilts – we aim to reduce the overall carbon intensity of the portfolio. We consider either the carbon footprint which calculates emissions associated with money invested, or the weighted average carbon intensity (WACI) which shows emissions associated with revenue. By tilting towards companies with low carbon intensity (positive tilt) and away from those with high carbon intensity (negative tilt).
- Sustainable Companies – we aim to invest more in companies seeking to achieve positive change for either the environment and/or society.
- Active Ownership – we vote to have our say on resolutions at company general meetings and use our influence to maximise overall long-term value, including considering ESG risks and opportunities.
What we won't invest in
To help reduce exposure to harmful activities or business practices, we apply a standard set of exclusions to our responsibly invested funds. For our Climate Change Fund, we go further - applying stricter exclusions to align with its non-financial objective.
We won't invest in:
- Tobacco – as this is harmful for the health of society, we will not invest in companies with more than 10% of revenue from tobacco manufacture or distribution.
- Thermal coal – this impacts health through air pollution, as this is harmful for people and the planet as the most polluting fuel. We will not invest in companies with more than 5% revenue from mining thermal coal, selling to external parties or using for power generation .
- Unconventional Oil and Gas – this is harmful as it often requires complex extraction methods, such as fracking and extraction from oil sands. We will not invest in companies with more than 5% revenues from oil sands, oil shale, shale gas, shale oil, coal seam gas, coal bed methane as well as artic onshore/offshore.
- Controversial Weapons – these are harmful as they have an indiscriminate and disproportional humanitarian impact. They include cluster munitions, landmines, biological or chemical weapons, depleted uranium weapons, blinding laser weapons, incendiary weapons, and non-detectable fragments. We will not invest in companies with ties to controversial weapons.
- UN Global Compact – these are 10 principles related to human rights, labour, environment and anticorruption, and take action to advance societal goals and the implementation of the UK Sustainable Development Goals (SDGs). We will not invest in companies involved in severe and extensive controversies that may indicate misalignment with UN Global Compact principles.
What this means for our investment funds
We’re updating our investment funds to reflect our responsible investing approach. As part of this, our funds fall under the FCA’s Sustainability Disclosure Requirements (SDR), which set standards for funds with sustainability characteristics and labels.
Right now, we don’t have any funds with sustainability labels, but we’re committed to transparency as the landscape evolves.
For more details, check out the FCA's guide Link opens in a new window to sustainable investment labels and anti greenwashing.
Sustainability Characteristics
We consider sustainability-related characteristics at a fund level to help classify our funds. To monitor how well each fund aligns with its strategy and objectives, we use data from the fund manager, index provider, or third-party ESG data provider MSCI Link opens in a new window. You can find full details of this in the key information documents.
We've created a classification of our funds to identify where sustainability-related characteristics are important and where a fund will need to provide sustainability-related information.
Sustainability-related information required if:
- Material Sustainability Characteristics – a fund has a specific non-financial objective to achieve positive change, with 70% invested in line with that objective.
- Responsibly Invested – a fund has responsible investing strategies, with close to 70% or more invested in line with these strategies.
Sustainability-related information not required if:
- ESG integrated – a fund has responsible investing strategies, but less than 70% is invested in line with these strategies.
- Financially Invested – a fund does not incorporate ESG risks and opportunities into investment decision making.
Our investment fund range
Check out our investment range below to compare the responsible investing approach of each of our funds.
Here, you’ll find information on how the fund is classified, if it has any sustainability characteristics or responsible investing strategies and if sustainability-related information is provided.
You’ll also find the Bridges Spectrum of Capital Link opens in a new window information, which is a way our industry considers how responsibly, or sustainably, a fund is invested.
Virgin Money Growth Fund 1
Classification: Responsibly invested
Bridges Spectrum of Capital:
- Deliver competitive financial return
- Mitigating Environmental, Social and Governance (ESG) risks
- Pursuing Environmental, Social and Governance opportunities
Sustainability characteristics: Sustainability-related information provided
Responsible investing strategies:
- ESG Tilts
- Carbon Tilts
- Sustainable investments
- Standard Exclusions (UNGC, controversial weapons, tobacco, thermal coal and unconventional oil & gas)
- Custom exclusions (fossil fuels: coal, oil and gas)
Virgin Money Growth Fund 2
Classification: Responsibly invested
Bridges Spectrum of Capital:
- Deliver competitive financial return
- Mitigating Environmental, Social and Governance (ESG) risks
- Pursuing Environmental, Social and Governance opportunities
Sustainability characteristics: Sustainability-related information provided
Responsible investing strategies:
- ESG Tilts
- Carbon Tilts
- Sustainable investments
- Standard Exclusions (UNGC, controversial weapons, tobacco, thermal coal and unconventional oil & gas)
- Custom exclusions (fossil fuels: coal, oil and gas)
Virgin Money Growth Fund 3
Classification: Responsibly invested
Bridges Spectrum of Capital:
- Deliver competitive financial return
- Mitigating Environmental, Social and Governance (ESG) risks
- Pursuing Environmental, Social and Governance opportunities
Sustainability characteristics: Sustainability-related information provided
Responsible investing strategies:
- ESG Tilts
- Carbon Tilts
- Sustainable investments
- Standard Exclusions (UNGC, controversial weapons, tobacco, thermal coal and unconventional oil & gas)
- Custom exclusions (fossil fuels: coal, oil and gas)
Virgin Money Defensive Fund
Classification: ESG integrated
Bridges Spectrum of Capital:
- Deliver competitive financial return
- Mitigating Environmental, Social and Governance (ESG) risks
- Pursuing Environmental, Social and Governance opportunities
Sustainability characteristics: Not material
Responsible investing strategies:
- ESG Tilts
- Carbon Tilts
- Sustainable investments
- Standard Exclusions (UNGC, controversial weapons, tobacco, thermal coal and unconventional oil & gas)
- Custom exclusions (fossil fuels: coal, oil and gas)
Virgin Money Bond Fund
Classification: ESG integrated
Bridges Spectrum of Capital:
- Deliver competitive financial return
- Mitigating Environmental, Social and Governance (ESG) risks
- Pursuing Environmental, Social and Governance opportunities
Sustainability characteristics: Not material
Responsible investing strategies:
- ESG Tilts
- Carbon Tilts
- Sustainable investments
- Standard Exclusions (UNGC, controversial weapons, tobacco, thermal coal and unconventional oil & gas)
- Custom exclusions (fossil fuels: coal, oil and gas)
Virgin Money UK Index Tracking Trust
Classification: Financially invested only
Bridges Spectrum of Capital:
- Deliver competitive financial return
- Mitigating Environmental, Social and Governance (ESG) risks
- Pursuing Environmental, Social and Governance opportunities
Sustainability characteristics: None
Responsible investing strategies:
- ESG Tilts
- Carbon Tilts
- Sustainable investments
- Standard Exclusions (UNGC, controversial weapons, tobacco, thermal coal and unconventional oil & gas)
- Custom exclusions (fossil fuels: coal, oil and gas)
Virgin Money Climate Change Fund
Classification: Material sustainability characteristics
Bridges Spectrum of Capital:
- Deliver competitive financial return
- Mitigating Environmental, Social and Governance (ESG) risks
- Pursuing Environmental, Social and Governance opportunities
Sustainability characteristics: Sustainability-related information provided
Responsible investing strategies:
- ESG Tilts
- Carbon Tilts
- Sustainable investments
- Standard Exclusions (UNGC, controversial weapons, tobacco, thermal coal and unconventional oil & gas)
- Custom exclusions (fossil fuels: coal, oil and gas)