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A guide to responsible investing
Our investment manager Irish Life Investment Managers (ILIM) champion the important, ethical ideals of the Environmental, Social and Governance Criteria (ESG), encouraging the companies we work with to invest in ways that promote responsibility, sustainability and profitability.
Responsible investing matters
ILIM signed up to the United Nations Principles for Responsible Investment in 2010 and is a founding member of Ireland’s Sustainable and Responsible Investment Forum.
What does that mean for Irish Life investors and why is it so important?
Responsible investing is no longer considered a niche market offering.
By encouraging companies to think and act responsibly on ESG issues, ILIM is creating a sustainable solution for the growing network of investors that want to make a profit without trading off their ethical beliefs or social consciousness.
What are typical ESG issues?
- Environmental covers anything that has a negative impact on the natural environment. Things like climate change, water scarcity, hazardous waste, nuclear energy, sustainability of resources and damage to biodiversity.
- Social looks at the impact on individuals, whether they’re employees, customers, suppliers or members of the community. It addresses issues like human rights, social diversity, gender equality labour relations, community welfare and the effects of bribery and corruption.
- Governance focuses on how companies or assets are run. For example, management structure and compensation, employee health and safety, and the compliance of accounting and audit practices.
How do ILIM influence real change in these areas?
ILIM offer a range of investment options incorporating more sustainable thinking and uses brand equity to influence businesses and bring about positive ESG change.
It uses its voting rights and shareholder power to encourage behaviour that serves the long-term interests of investors and society. In 2017 alone, ILIM voted in more than 4,400 meetings with over 1,600 companies in 61 countries.
ILIM target companies with clear ESG risks and use their influence to inspire responsible action. In 2017, that included 105 live engagement sessions with 95 companies.
ILIM work with like-minded investors and industry bodies to build strength in numbers and create lasting change.
ILIM do all of this with the help of a dedicated ESG ambassador and governance committee. This ensures regulation and legislation always remain front of mind and an important part of the overall process.
Why ESG investing?
Responsible investing is an evolving trend that now accounts for over 30% of professionally manged assets in Europe, the US, Canada, Asia, Japan, Australasia and Africa, and its expansion looks set to continue.(Source: Eurosif 2016)
Turning collective consciousness into positive, industry-wide action.
Research is ongoing, but there’s consistent evidence to suggest that integrating ESG factors into the investment process can help improve risk and long-term financial returns. ILIM is at the forefront of that research in Ireland and uses everything in its power to raise awareness and drive the sustainability agenda, while improving returns for customers (Source: Study by Deutsche Asset & Wealth Management, 2015).