Welcome to Octopus Investments Please tell us who you are... Individual InvestorFinancial AdviserInstitutional InvestorI'm none of these .st0{fill-rule:evenodd;clip-rule:evenodd;fill:#FFFFFF;} .st1{filter:url(#d);} .st2{mask:url(#b);fill-rule:evenodd;clip-rule:evenodd;fill:#FFFFFF;} .st3{filter:url(#c);} .st4{mask:url(#a);fill-rule:evenodd;clip-rule:evenodd;fill:#FFFFFF;} Created with Sketch. Go to resources Find it fast 10. Policy engagement Policy Octopus Responsible Investment Policy Our mission at Octopus is to invest in the people, ideas and industries that will change the world. We strongly believe there is no trade-off between ‘doing good’ and ‘making money’. Indeed, we believe that companies that understand what it means to make the world a better place will deliver better financial returns for their investors over the coming decades. We also believe that how a company behaves is just as important as what it does. That’s one of the reasons why, in 2021, we became an accredited B Corporation, the equivalent of a Fairtrade coffee stamp but for companies. B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. Across all Octopus companies, we want to demonstrate the power of business as a force for good and to inspire the companies we invest into to become partners in our vision for the future. Our responsible investment approach is based on three pillars: Pillar #1: Living by our values Supporting companies that understand that how they behave is just as important as what they do (measured and assessed through our ‘Friends-lens’). Engaging with our investee businesses, investors, policy makers and others in line with our beliefs. Building a culture where people ‘do the right thing, even when no one is watching’. Setting objectives in line with our beliefs and rewarding our people accordingly. Pillar #2: Mitigating ESG risk Identifying, measuring and mitigating material ESG risks. Protecting and enhancing the value of our clients’ investments as part of our fiduciary duty. Implementing a robust ESG framework that is applied throughout our investment business. Pillar #3: Managing impact Bringing to life the impact that Octopus, and the funds that we manage, have on the world. Developing ‘impact funds’ that target a specific impact objective. Managing our ‘impact funds’ with credibility as signatories of the International Finance Corporation’s Operating Principles for Impact Management. Our strategy and approach To protect and create value for investors, we apply our responsible investment lens to all our investments and favour assets that contribute to three key sustainability themes: Building a sustainable planet. Empowering people. Revitalising healthcare. These themes, by their nature, avoid significant ESG risk, are focused on growth areas and create a positive impact for both people and planet. We track the amount of money we’ve invested across these three themes and set annual targets to increase the proportion of our total funds under management that this represents (in 2020 it was 64%, equivalent to £6 billion). Our framework and guidelines We believe that the problem with most companies is that they’ve sacrificed the interests of others (their employees, their customers, their communities, and the environment) for their own financial benefit. They’ve behaved in a way our friends would not. This needs to change. First, because business, done right, has the power to transform the world in which we live. Secondly, because behaviour is inextricably linked to building a valuable business. People increasingly want to work for, buy from and invest with ‘good’ companies. In line with this belief, we have developed our own framework (called the ‘Friends-lens’), based on our own code of conduct, to help assess how our potential and current investments are operating from a responsible investing perspective. This framework focuses on four key attributes, as set out below. 1. Have purpose We look to invest in companies which set ambitious goals, and which are inherently focused on making the world a better place. We avoid investing in harmful industries and we expect the management teams of our portfolio companies to mitigate any negative impact their business has on both planet and people. We use our influence to manage risk and drive positive change and to encourage our investee businesses and suppliers to do the same. Where an element of harm is unavoidable, we expect companies to be transparent with all their stakeholders and we, in turn, are transparent with our investors. 2. Do right by people We look for companies which are diverse and inclusive, and which treat people fairly, irrespective of race, gender, nationality, disability, political or religious beliefs. We expect companies to consider the impact of their operations on local communities and others and, where possible, we encourage them to give their time and expertise to causes they believe in. We expect companies to provide safe and healthy working conditions for all, to promote human rights and the ‘living wage’ and to seek a ‘just transition’ for workers and communities as the world responds to climate change. 3. Do right by the planet We expect our portfolio companies to acknowledge the climate emergency we face and to support the Paris Agreement. As part of our fiduciary duties, we apply TCFD to protect shareholder value. Without over-engineering, we expect our portfolio companies to measure and report on their greenhouse gas emissions (and to be explicit about what they’re doing to reduce them). Where appropriate, we ask them to set a path to net zero as soon as feasible. We expect them to make minimal contribution to pollution, deforestation, waste and the loss of biodiversity and to use their influence to encourage others to do the same. 4. Don’t be afraid to show personality We expect our companies to work with care and to be law abiding, as well as upholding high standards of business integrity in all their dealings. We expect them to be honest, transparent, and straightforward in all forms of communication with their stakeholders (customers, employees, community and shareholders). We ask them to manage risk and when they make mistakes, we expect them to be straightforward and to explain what they’re going to do to put them right. We also look for companies which are not afraid to show their personality and to be different. Governance and oversight 1. Octopus is a certified B Corp and has changed its Articles of Association so that we are legally required to manage our business in line with the interests of all our stakeholders. 2. The Octopus Investments (OI) Board sets and regularly reviews this Responsible Investment (RI) Policy and has overall accountability for its delivery. 3. To monitor and oversee the implementation of this policy, including any conflicts of interest, the Board established a dedicated RI Committee, consisting of both Octopus founders, the Chief Investment Officer and the Impact and Sustainability Director. 4. More detailed asset specific guidance for the implementation of this policy is maintained in the Responsible Investment Handbook. This is overseen by the Impact and Sustainability Director and reviewed annually by the RI Committee. 5. The CEOs of each of the OI investment teams are responsible for implementing the policy requirements and embedding ESG within their teams. 6. Each investment team reports to the RI Committee quarterly on ESG integration and key ESG metrics and performance, including the results of any climate risk analysis. 7. Individual fund managers are responsible for implementing a bespoke ESG policy for each investment fund or company (which is set by the fund or company board, or equivalent governing body). The policies address: The scope of investment asset classes and the investment universe, including any exclusions. The internal product classification and appetite for ESG risks. Any geographical considerations or variations in approach by sector or company stage. A description of how financially material environmental, social and governance risks will be assessed. These risks will include physical and transitional climate risks alongside other, asset specific risks, drawn from the SASB materiality map and investment team experience. How those ESG factors will be tracked, measured, and reported. How consideration of the ESG factors is embedded into investment decisions and practices. How the fund will engage with its investee businesses on ESG and ‘doing the right thing’ via the relevant stewardship and engagement approach. 8. ESG and TCFD are included in the Octopus Group internal audit risk-based plan and key processes are reviewed periodically. External oversight As a signatory to the UN PRI, Octopus undergoes an annual Principles of Responsible Investing(PRI) assessment. In addition, Octopus undergoes a B Corp assessment every two years. From 2022 the alignment of our impact framework with the Operating Principles for Impact Management is externally verified by an independent assurance provider. Fund specific information relating to responsible investment performance and activities is reported in the relevant Annual Report and Accounts and is reviewed and validated by the external auditor. Climate change We believe the climate emergency will bring huge disruption to our lives and to the investment world over the next 20 years. We support the Paris Agreement and we’re integrating TCFD guidance to assist us with understanding our exposure and developing resilience to climate-related risks: Investment teams identify climate related risks and opportunities relating to their investments. Investment teams consider the materiality of these issues within 1.5 and 4-degree climate pathways and report to investors accordingly. The heads of each investment business report to the RI Committee on their material climate related exposure, and the RI committee approve a suitable risk management approach. The investment teams set targets to manage these issues and performance is reported back to the RI committee quarterly. The RI Committee reports annually to the board on TCFD risks across the business. Policy engagement Our public affairs and policy engagement work is overseen by founder and board member Chris Hulatt to ensure that it aligns with our values and mission as well as the principles set out in this policy. The policy was approved by the Octopus Investments Board on 22 March 2021. Products Business Property Relief Venture Capital Trusts Enterprise Investment Scheme Funds Cash savings Discretionary portfolio management About About us Leadership team Careers Media Centre Responsible Investment Policy Our Business Continuity Plans Learn Resources Webinars Planning scenarios Guides Calculators Insights Bridging the Gap Support Contact Coronavirus information and support Brochures Application forms Guide to risks Complaints Protect yourself from fraud Created with Sketch. 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