Responsible & Ethical Investment and how we do it

Responsible Investment (RI) is not only about making appropriate returns – for us it’s about much more than that.

It’s about:

  • making sure our investments address social issues and global concerns relevant to the businesses we invest in, whilst also protecting future markets and returns
  • advocating better member outcomes for your pension, whilst having a positive impact on the world around us
  • being aware of the risks and opportunities associated with our investments and managing these to generate sustainable, long term returns to provide secure pensions for our members
  • benefiting our investment returns – we believe that investing responsibly for the long-term reduces risk and will positively impact returns.

We have the largest RI team of any UK pension scheme, who engage with companies and global policy makers on issues that could impact long term sustainable returns. We also provide environmental, social and governance (ESG) information for the investment decisions we make on your behalf.

We rarely divest from companies purely on the grounds of their ESG performance, but we act as stewards to address any risks or issues through engagement. By being an engaged investor, especially with our size and strength, we can encourage positive change and drive sustained improvement. This means we don’t avoid issues by removing ourselves from the agenda, but we use our voice to try to make a difference, which means you do too.

We continue to be less ‘carbon intensive’ than our benchmark, from our active investment decisions.

Our commitment to positive change has also led to sustainability awards too. In our property portfolio, the Grand Arcade Shopping Centre in Cambridge won a ‘Green Apple Award’ in the Environmental Best Practice 2018 category, in recognition of the energy reductions achieved at the centre following an LED replacement programme.

Other investments also host a variety of community and bio-diversity initiatives, including the installation of a bug hotel, cycle training sponsorship and several homelessness initiatives.

What about ethical investing?

Ethical investing differs from RI by focusing on specific ethical beliefs. While RI takes into account ESG concerns and engages on these issues to encourage positive change, the key difference for our ethical investment policy is that we screen out, or divest from, certain companies in line with stated ethical principles.

For the USS Retirement Income Builder, we must, by law, invest in the best financial interests of our members. But in the USS Investment Builder, we’ve created alternative ethical investment options for those with specific ethical beliefs.

Members can choose the Ethical Lifestyle Option (if you want us to manage your savings for you) or the Ethical Equity or Sharia funds (if you want to manage your investments yourself).

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The Ethical Equity Fund is one of our best performing funds to date, returning an average of 17.7% each year. If you’d invested £100 a month since October 2016, it would be worth over £2,730 by September 2018.

By investing responsibly, we can have a positive impact on the world around us and secure the returns needed to pay our members’ pensions. It’s at the heart of what we do. Our responsible investment approach and the additional ethical options that are available in the USS Investment Builder allow us to achieve investments that have meaning to our members.

Responsible Investment is, and will continue to be, an integral part of our investment process.

To read more on our approach to Responsible Investing, take a look at our blogs on USS’s approach to Responsible Investment and The divestment debate.

Resources

Take a look at the fund performance factsheets in My USS where you can view the performance of all 10 funds on offer, and use the fund performance chart to compare them and make the right decision for you.

For a glossary of our terms please see more information on our important terms page.

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We’ve invested more than £700m in UK renewables and green technology projects, including funding a number of local authorities to replace old street lighting with new energy reduced alternatives.