Responsible investment: helping pension members invest for the future

At Zurich, responsible investing is an integral part of our investment approach and is embedded across our Prisma multi asset funds, which form the core building blocks of many pension strategies, including our Personalised GuidePath Strategy (PGP). As a global group, Zurich is committed to investing responsibly and has been a signatory to the United Nations Principles of Responsible Investment since 2012. As an active investment manager, the Zurich Investments team in Ireland are conscious of the need to invest customer and shareholder funds responsibly.

Why responsible investing matters

The global economy is undergoing significant change, driven by climate transition, technological innovation, evolving regulation and shifting consumer preferences. Companies that adapt successfully to these trends may be better positioned for long-term growth, while businesses that fail to respond may face increasing challenges. By incorporating ESG considerations into investment decisions, the team at Zurich Investments aims to help create more resilient portfolios while supporting sustainable long-term returns.

Doing well and doing good

For Zurich in Ireland, doing well reflects a belief that we can integrate environmental, social and governance (ESG) factors into our investment process on a day-to-day basis and they create financial value with the potential for better investment returns. We discuss and explore these issues daily, both within the team and when we meet with the companies that we invest in. Being able to engage with these companies on key issues that are important in relation to doing well from an economic perspective is a big advantage of an active investment manager such as Zurich Investments. We also promote sustainable investment and longer-term investment returns to the benefit of all stakeholders, including investors in terms of doing good. That means, through our investments, we can also have a positive impact on society and the environment, and we very much believe in playing our part. We consider the positive results as a non-financial value that cannot be directly translated into euros or cents but is still vitally important.

What steps have Zurich Life in Ireland taken in Responsible Investment?

In recent years we have reclassified our most popular multi-asset funds under the Sustainable Finance Disclosure Regulation (SFDR), a European regulation introduced to improve transparency in the market for sustainable investment products. What that means is we are disclosing lots of information on how our funds promote environmental and social characteristics.

In Zurich, there’s four main pillars of Responsible Investment

The first pillar is ESG integration, which means investing with respect to the environmental, social and governance characteristics of underlying securities and ensuring that ESG data is incorporated into our investment process.

The second pillar Active ownership is very important to Zurich as an active investment manager. This involves undertaking active ownership with the companies we invest in through exercising our shareholder voting rights and engaging and meeting with those companies directly. We aim to use as many of our votes as possible and understand the issues facing companies from a responsible investment perspective through our engagement activities.

The third pillar is selective exclusions. While to date Zurich Life has not adopted a broad-based exclusionary approach to investments there are certain situations where we believe exclusion criteria are justified. The exclusion criteria cover activities that are irreconcilable with Zurich’s values, sustainability strategy and reputational risk. This covers activities in thermal coal, oil sands and oil shale. The criteria also exclude investment in companies which produce, stockpile, distribute, market, or sell banned cluster munitions or anti personnel landmines.

The fourth pillar is our carbon ambition. In May 2022, Zurich introduced a carbon reduction ambition to reduce the carbon intensity of equity and credit portfolios in our multi asset funds.

Responsible investing within the Prisma funds

Zurich’s Prisma funds are designed to provide diversified exposure across a broad range of asset classes and markets, helping pension members access growth opportunities while managing risk through professional portfolio construction. The Prisma funds form a core component of Zurich’s Personalised GuidePath strategy, which underpins the investment approach for many of our corporate pension clients. As part of this approach, responsible investment considerations are integrated throughout the investment process. This means ESG factors are considered alongside traditional financial analysis when selecting and managing investments. By considering sustainability risks and opportunities today, portfolios may be better positioned to navigate the challenges and opportunities of tomorrow.

Expanding Zurich’s responsible investment range

Alongside the responsible investment features already incorporated within the Prisma funds and broader internally managed fund range, Zurich continues to enhance the range of options available to investors.

As part of this commitment, Zurich recently launched the Indexed Climate Focus World Equity Fund, a specialist global equity fund designed for investors seeking a stronger climate-focused investment approach. The fund tracks the MSCI World Climate Paris Aligned ex Select Business Involvement Screens Index and Looking ahead aims to support alignment with the goals of the Paris Agreement through increased exposure to climate solution providers and reduced exposure to fossil fuel-related businesses.

While the Prisma funds continue to provide the core diversified responsible investment solution for many pension members, the launch of the Indexed Climate Focus World Equity Fund further demonstrates Zurich’s commitment to offering a broad spectrum of responsible investment choices. 

Looking ahead

Responsible investing is increasingly becoming a standard expectation rather than a specialist investment approach. Through the integration of ESG considerations within the Prisma funds and the continued development of innovative solutions such as the Indexed Climate Focus World Equity Fund, Zurich is helping pension members invest for both their financial future and the world they will retire into.

For more information on Zurich’s commitment to Responsible Investment, we recommend reaching out to your Zurich scheme administrator or visiting our Responsible Investment hub.