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Our approach to Responsible Investment

  • Beliefs and purpose: We believe Environmental, Social and Governance (ESG) factors present both risks to the long-term performance of our financial investments, and opportunities to improve the impact of the investments on society and the environment. Bupa’s purpose is helping people live longer, healthier, happier lives and making a better world. As part of this vision, we have set our ambition to become a Net Zero business by 2040 and sustainability is a key of the pillar of Bupa’s new strategy. With no shareholders, we can take a long-term view on performance and reinvest profits into providing more and better healthcare for the benefit of current and future customers. We aim to invest in a responsible manner which is aligned with our purpose, strategy and climate ambitions.
  • Our portfolio: Our investment portfolio is primarily invested in short-term cash instruments, but with an allocation to bonds and loans which are managed by external asset managers 1 . These longer-term assets are predominately corporate and government bonds; we only have minimal holdings of equities and alternative investments within certain associate businesses.
  • Governance: Our approach to Responsible Investment forms part of our group-wide treasury policy, which is owned by the Group Treasurer and approved by the Chief Financial Officer and the Group Board. Local Finance Directors own the implementation of Responsible Investment in their respective jurisdictions. Progress against our 2040 Net Zero ambition and science-based targets is governed by the Sustainability Steering Committee, in close collaboration with core functional teams crucial to target delivery such as Finance.

Our Responsible Investment framework

  • ESG Integration: We require ESG factors to be integrated in all investment decisions, both internally and by our third party asset managers, and our investment staff receive training on ESG risk management. We also place exposure limits on the sectors and countries most at risk from climate change, while allocating capital to companies which have set science-based targets.
  • Engagement: Our external asset managers are required to engage directly with investee companies on ESG issues, and we have joined various investor forums including the Institutional Investors Group on Climate Change and the UK Sustainable Investment and Finance Association to be part of collective action.
  • Climate Change: To underpin our Net Zero ambition, Bupa’s ambitious science-based Scope 1, 2 and 3 emissions targets have been validated by the Science-Based Targets Initiative (SBTi). The SBTi commended Bupa’s 1.5°C-aligned targets; currently the most ambitious designation available through the process and in-line with the levels required to meet the Paris agreement goals. Bupa has also joined the UN-backed Race to Zero , the official Race to Zero healthcare partner, joining other organisations who have committed to take rigorous and immediate action to halve global emissions by 2030 and deliver a healthier, fairer zero carbon world in time. We have developed targets to reduce both the carbon intensity and Temperature Rating of our investments, and we are taking action to achieve emissions reduction while helping to finance the transition to a low carbon economy. We also conduct climate stress tests to inform our approach to climate risk management in the investment portfolio.
  • Baseline exclusions: Our preference is to help finance the climate transition by allocating capital to companies which have set credible science-based targets to decarbonise their businesses, even if some are in currently high-emitting sectors. However, our policy prohibits investment in companies with the most significant adverse impacts on climate and health, namely coal production , the extraction of oil from tar sands , the manufature of tobacco or the creation of controversial weapons (including cluster bombs, landmines, chemical and biological weapons and depleted uranium weapons) 2 . Investment in issuers which breach UN Global Compact principles is also prohibited, setting minimum requirements in the areas of human rights, labour, environment and anti-corruption.
  • Implementation: We have specialised systems and data to support our Responsible Investment approach, including climate metrics and ESG ratings. These are used, both by external managers and internally, as an investment decision-making tool and to review the ESG profile of portfolios to ensure alignment with our policies and climate targets.

Our Responsible Investment disclosures

We’re signatories to the UN-convened Principles for Responsible Investment and our external asset managers are too. We are required to report progress on our SBTs to the SBTi annually. We’ve started reporting in line with Taskforce on Climate-related Financial Disclosures (TCFD) recommendations and also disclose against CDP’s Climate Change questionnaire, a comprehensive review of how climate risks and opportunities are built into our business. More information on our approach to sustainability and climate change is available on .

1 This Responsible Investment approach is designed for Bupa’s subsidiaries and does not apply to Bupa’s pension schemes.

2 All prohibited activities are subject to a maximum acceptable revenue threshold of 5%.