Advancing sustainable investing

Investing with tomorrow in mind

Empowered by a sustainability mindset, Sun Life aims to play a leadership role in driving sustainable investing. Sustainable investing can help us deliver on our Purpose, while making a positive impact on society. Using our own investments and our influence as an asset manager, we seek opportunities to drive the transition to a low-carbon and more inclusive economy.

Our approach

ESG integration:

Embedding ESG data with traditional financial analysis of a company. ESG integration is core to our investment approach and the foundation of sustainable investing at Sun Life. The way we integrate ESG factors into our investment decision-making varies across our range of asset classes, portfolios and asset management and wealth businesses, but it’s essential to our sustainable investing activity. 

We believe we can maximize our opportunity to make a positive impact when we complement ESG integration with stewardship, engagement and/or the intention to create positive change.

Screening:

There are two approaches to screening: divestment and exclusion, and positive screening.

i) Divestment and exclusion: Excluding specific companies, industries or sectors based on values, ethical considerations, or negative ESG characteristics. Examples include fossil fuel-free funds and tailored portfolio construction to exclude certain companies or sectors, or the bottom performers on ESG ratings.

ii) Positive screening: Including specific companies, industries or sectors based on values, ethical considerations, or positive ESG characteristics. For example, targeting low greenhouse gas (GHG) emitters or top performers on ESG ratings.

We believe engagement can be more powerful than divestment. As a large asset management and wealth business, we can engage directly with companies and investment managers on ESG issues to better understand their approach to managing issues under consideration. We also engage through collaborative industry initiatives. Working alongside other institutional investors helps us better understand how our peers are thinking about common issues.

Thematic and impact investing:

Thematic investing focuses on specific sustainability-oriented areas or themes to guide investment choices, such as renewable energy, waste and water management, sustainable forestry and agriculture. Impact investing is investing with an aim to generate specific, quantifiable, positive ESG impacts and financial return​.

We leverage expertise across our asset management and wealth businesses to develop, identify and offer sustainability-themed investments that also meet the specific sustainable investing goals of our Clients.

It is our duty to act in the best interests of Clients, including policyholders. Embedding ESG considerations into investment decisions helps ensure we are doing this, while helping Clients and employees achieve lifetime financial security. 

Sun Life’s investment businesses

Sustainable investing activities occur across three categories at Sun Life:

  • Asset owner – Where Sun Life is an asset owner, we have discretion over investment guidelines (as established within the requirements, restrictions and limitations set out in our Board-approved policies) to help meet our obligations to policyholders. 
  • Asset manager – Our asset managers act as fiduciaries helping Clients achieve their investment objectives.
  • Fund platform – Through our fund platforms, we offer investment options to Clients. Our fund platform businesses are in various stages of integrating ESG into their investment decision making.

Across these categories, our International Investment Centre (IIC) functions as an investment research and consulting group. In the due diligence and monitoring of third-party managers, the IIC considers each manager’s incorporation of ESG into its investment processes, as well as other relevant sustainability factors and monitors them on an ongoing basis.

The information below represents Sun Life’s major investment operations and does not include joint ventures. All AUM figures are as of December 31, 2022.

Asset owner Description

Sun Life

General fund AUM: $205.6 billion

Asset managers Description

 

 

 

 

SLC Management

 

A group of asset managers offering a diverse range of traditional and yield oriented asset classes to institutional investors globally.

Fixed income:

  • Investment grade public and private fixed income and infrastructure debt offered by SLC Fixed Income
  • Alternative credit and non-investment grade public fixed income offered by Crescent Capital Group
     

Real assets:

  • Real estate asset investment and management in primary, secondary and co-investment markets offered by BentallGreenOak
  • Infrastructure equity across a range of listed and unlisted portfolios offered by InfraRed Capital Partners
     

AUA: $209.6 billion

 

MFS Investment Management

Asset manager offering a comprehensive selection of actively managed equity and fixed income products to retail and institutional investors globally, including pension plans, sovereign wealth funds, monetary authorities, and endowments and foundations.

AUM: $742.3 billion

Fund platforms Description

 

Sun Life Global Investments

 

Investment manager offering a diverse lineup of innovative investment solutions to a broad array of Canadian retail and institutional Clients.

AUM: $34 billion

 

Sun Life Group Retirement Services

 

The largest Canadian workplace retirement and savings plan provider, offering capital accumulation plans and defined benefit plans.

AUM: $133.2 billion


Sun Life Financial Investment Services (Canada) Inc. (SLFISI)

Registered mutual fund dealer in all provinces and territories in Canada. SLFISI offers a range of mutual fund products from some of the leading investment fund managers in Canada.

AUA: $33.5 billion


Sun Life Asset Management (HK) Limited
 

Offers a broad range of retirement and investment products and services for individuals and corporate Clients.

AUM: $19.2 billion

We’re committed to ESG integration. We believe that looking at investments through an ESG lens leads to superior financial results over the long term. Integrating ESG factors helps us manage risks in our investment portfolios. It also helps us identify opportunities. ESG issues are dynamic, interconnected and multi-faceted, and must be deliberately assessed to uncover risks and opportunities. 

To support robust ESG integration, investment teams use a range of tools and data to help them identify ESG risks and opportunities. Each business takes a tailored approach to developing expertise. That may mean hiring dedicated experts, building expertise within the broader investment team, or training staff. 

Sun Life and the companies in our Asset Management business group are all signatories to the Principles for Responsible Investment (PRI). Sun Life is the largest insurance asset owner signatory in Canada by AUM. Refer to the websites of each asset management business for more details on their specific ESG integration strategies. 

Our investment teams engage with relevant stakeholders in many ways through their investment processes. These stakeholders include:

  • Fund managers: Investment teams have direct interaction with management to gain a deeper understanding of how they embed ESG considerations into their investment decision-making process.

  • Investees: We review and confirm ESG information of companies we invest in and advocate for plans to address their ESG risks. For example, if a high GHG emitting company does not have a robust plan to be more sustainable, then we may work with their management team to provide guidance. We may discuss elements for developing a robust and transparent plan designed to disclose and deliver on their carbon transition goals consistent with industry standards. We evaluate and influence company actions in three ways:
    • Proxy voting as an equity holder (each investment team has their own proxy voting policy)
    • Direct engagement with management
    • Industry collaboration

  • Clients (retail and institutional): We educate our Clients on the benefits of sustainable investing. Education is critical to helping our Clients be more informed and make good investment decisions. We also offer sustainable investment solutions. Our Clients increasingly want to know their investments are sustainable and look to work with providers who are leaders in this space.  

In Canada, we’re one of the biggest financers of private sustainable infrastructure, providing long-term private capital to support construction, operation and maintenance. We work with governments, other businesses, local communities and Clients to help bring such projects to fruition and ensure they achieve strong sustainable value. We will continue to invest in sustainable assets as defined by leading market standards, while establishing and regularly monitoring our internal investment targets. These investments help support the transition to a low-carbon and more inclusive economy and play a role in supporting the United Nations Sustainable Development Goals. 

Sun Life has also set a goal of achieving net-zero GHG emissions by 2050 for both its investments and operations, with interim targets established or under development for businesses in our asset management pillar and for Sun Life’s general account. Refer to our Net Zero by 2050 report and Climate and Environmental Action for more details.   

We strive to work with companies we invest in to enhance their disclosures, including their plans to address the material effects of climate change on their businesses, to improve data availability, and to share key learnings with management through participation in investor-led initiatives.

Examples of these initiatives include: 

  • SLC Management’s, Crescent’s and MFS’ membership in Climate Action 100+. This investor-led initiative enables us to engage with the world’s largest corporate GHG emitters to encourage them to act on climate change.  

  • SLC Management’s role as a Founding Participant and Contributor in Climate Engagement Canada (CEC). This finance-led initiative, created in 2021, aims to drive dialogue between the financial community and Canadian corporations to promote a just transition to a net-zero economy. CEC is engaging with 40 of the country’s highest GHG-emitting corporations. Participants work collaboratively to engage with these companies and encourage leading practices with respect to climate change risks and opportunities and a just transition. 

As part of our approach of stewardship, engagement and education, Sun Life pledges to work with investee companies across all sectors through its transition to net zero. Many people associate sustainable investing with the divestment of fossil fuels. We don’t believe this is the optimal approach. These companies currently play an important role in the economy and provide livelihoods to millions of people. We support these companies as they work to transform their business models to transition towards a lower-carbon economy. Importantly, when an equity stake is sold, it may be purchased by someone who doesn’t engage or care about its climate impact. That’s why our engagement is so important.  

We are helping to lead industry efforts and collaboration to advance the field of sustainable investing. Data challenges persist in terms of getting high quality and reliable sustainability-related data (including GHG emissions) from both public and private companies. Through our public policy and regulatory activities, we advocate for increased and more robust, standardized disclosure of climate-related data. Improved access to data helps long-term investors like Sun Life to better account for the risks and opportunities from climate change and direct capital to those businesses that are leading the transformation. In addition, we encourage Canada’s governments to design sustainable infrastructure programs in ways that attract long-term investors.   

Transparency is one of our guiding principles for all disclosures including those related to sustainable investments. We believe in transparency and reporting on our progress, learnings, and challenges. In addition to our Sustainability Report, some of our asset management businesses publish their own sustainable investing reports. They also report on sustainable investing in Client reporting and dashboards. Sun Life and some of its asset management businesses also publish annual reporting aligned to the Task Force on Climate-related Financial Disclosures.  

Goals

  • $20 billion in new investments from 2021-2025 in assets and businesses that support the transition to a low-carbon and more inclusive economy

     On track - $14.2 billion invested since 2021, with $6.5 invested in 20221

  • Net-zero greenhouse gas (GHG) emissions in our investments by 2050. We set this goal across our global operations as well – refer to Trusted and Responsible Business.

    In progress – several interim targets established or under development for our asset management businesses and for Sun Life’s general account. Refer to our Net Zero by 2050 report for the latest updates.

2022 highlights

  • $80.4 billion portfolio value of investments in assets and businesses that support the transition to a low-carbon and more inclusive economy1
  • Launched new sustainability products for Clients and expanded our own ESG investment portfolio
  • Published numerous articles and papers and launched a podcast to raise awareness among our Clients and the investment community of ESG trends and opportunities

Learn more about our progress and performance in our 2022 Sustainability Report and ESG Performance Tables.

Enabling Indigenous-owned power infrastructure

Sun Life supports 24 First Nation communities through financing electricity grid connections.

Learn more

Recognition

Sun Life Assurance Company of Canada received a five-star rating, the highest possible, in the latest Principles for Responsible Investment assessment2 for the Investment and Stewardship Policy module. Sun Life also received a four-star rating for the Indirect-Fixed Income-Active module.

BentallGreenOak marked 12 consecutive years of excellence and industry leadership in ESG in the 2022 GRESB Real Estate Benchmark. Sun Life’s general account achieved a 5-star rating indicating industry leadership and performance in the top 20% of the global benchmark.

Commitments and memberships

PRI Logo
Task Force on Climate-related Financial Disclosures logo
Net Zero Asset Managers Initiative logo
Climate Engagement Canada logo (SLC Management)
Responsible Investment Association logo
Institutional Investors Group on Climate Change logo
Partnership for Carbon Accounting Financials Logo

1 Criteria for investments based on ICMA Green Bond Principles, ICMA Social Bond Principles, ICMA Sustainability Bond Principles, GRESB Real Estate Benchmark, and PRI Impact Investing Market Map. Where issuers do not obtain a third-party opinion or provide an internal opinion on their issuance, our investment professionals apply judgment to assess whether the use of proceeds meets the standards set out in the ICMA principles. Does not include all holdings in companies that may be defined as sustainable under other taxonomies.

2 For copies of Sun Life Assurance Company of Canada’s 2021 PRI Transparency and Assessment reports, contact sustainability@sunlife.com. For more information on the assessment, visit the PRI website.

3 As of March 28, 2023, MFS, SLC Fixed Income, BentallGreenOak, InfraRed and Sun Life Global Investments are signatories to NZAM.

4 Logo used with permission from Climate Engagement Canada (CEC). CEC is a finance-led initiative that drives dialogue between the financial community and corporate issuers to promote a just transition to a net-zero economy. For more information, please visit the CEC website. SLC Management is a Founding Participant and Contributor in CEC.

5 MFS, SLC Management and Crescent are signatories and participate in direct engagements.

6 SLC Management, Sun Life Canada and Sun Life Global Investments are members.

7 MFS and Sun Life Global Investments are members.

8 SLC Fixed Income joined the Partnership for Carbon Accounting Financials in 2022.

Refer to Sustainability Data Scope.