As Direct Line Group’s investment strategy evolves, the company is regularly looking for ways to align its investment practices with environmental, social and governance (ESG) issues. The investment strategy is determined by the Director of Investment Management and Treasury and approved by the Direct Line Group Investment Committee.
To date, the Direct Line Group investment strategy has reflected the following initiatives:
- Fixed income assets presently account for 74% of the investment portfolio benchmark. Within fixed income, 77% are managed currently against ESG weighted indexes, with a requirement to achieve at least an ‘A’ ESG rating score using the MSCI methodology,
- Fixed income investment guidelines (1) instruct the portfolio managers to prefer investment in green bonds where they offer a similar risk-reward profile to other issues, and (2) specifically prohibit investment in companies which manufacture cluster munitions,
- All externally managed assets are run by managers who are currently signatories to the United Nations-supported Principles for Responsible Investment,
- Almost 90% of the investments in the infrastructure debt portfolio are in schools, hospitals and other social infrastructure assets,
- The commercial property portfolio invests only in assets with an energy efficiency level of D or higher (or with apportioned funds to achieve this level), exceeding the government minimum requirement of an E rating.