Advancing sustainable investing

Investing with tomorrow in mind

Sun Life is playing a leadership role in the growth of sustainable investing. Our company’s Purpose is to help Clients achieve lifetime financial security and live healthier lives. Sustainable investing helps us deliver on our Purpose and is key to delivering sustainable returns for Clients and driving the transition to a low-carbon and more inclusive economy. 

Our approach

Approach ESG integration Divestment and exclusion Sustainability focused
General definition Embedding ESG data with traditional financial analysis of a company. This is the most common sustainable investing approach globally1. 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. Focuses investing in specific sustainability-oriented areas or themes, such as renewable energy, waste and water management, sustainable forestry and agriculture.
Sun Life's  approach ESG integration is the approach Sun Life primarily uses. Across our range of asset classes, portfolios and asset management and wealth businesses, the way we integrate ESG factors varies. But it’s foundational to our sustainable investing activity. 

In most cases, we believe engagement is more powerful than divestment. As a large asset management and wealth business, we often can engage directly with companies and investment managers on ESG issues and help effect change. We also engage through collaborative industry initiatives. Joining together with other institutional investors on common issues can be an especially effective way to reach a shared ESG goal.

Sun Life’s current exclusions, as an asset owner, include tobacco and cluster munitions.

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

Our fiduciary duty is 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 decisions (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 to help Clients achieve their investment objectives.
 
  • Fund platform – Through our fund platforms, we offer investment options to Clients and employees. Our fund platform businesses are in various stages of ESG integration.

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 at December 31, 2021.

Asset owner Description

Sun Life

General fund AUM: $205 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 Sun Life Capital Management
  • Alternative credit and non-investment grade public fixed income offered by Crescent Capital Group

Real assets:

  • Real estate equity and debt offered by BentallGreenOak
  • Infrastructure equity across a range of listed and unlisted portfolios offered by InfraRed Capital Partners


AUM: $347 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: $875 billion

Fund platforms Description

Sun Life Global Investments

 

Retail investment manager offering Canadians a diverse lineup of mutual funds and innovative portfolio solutions through a global investment platform.

AUM: $38 billion

Sun Life Group Retirement Services

 

The largest Canadian workplace retirement and savings plan provider, offering capital accumulation plans and defined benefit plans to plan sponsors and Sun Life employees. Plan sponsors are typically companies or other organizations. 

AUM: $129 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.

AUM: $41 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 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 sustainability 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 on sustainable investing.

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 review ESG integration and its importance to our Clients.
 
  • 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 greenhouse gas (GHG) emitting company does not have a robust plan to be more sustainable, then we may work with their management team to provide guidance on elements for developing a robust and transparent plan designed to disclose and deliver on their carbon transition goals consistent with prevailing industry standards. We evaluate and influence company actions in three ways:
    • Proxy voting as equity holder (each investment team has their own proxy voting policy aligned to this statement)
    • Direct engagement with management
    • Industry collaboration
 
  • Clients (retail and institutional) and employees: We educate our Clients and employees on the benefits of sustainable investing. 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 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 to be announced in 2022. Refer to Climate and Environmental Action for more details. 

Sun Life is committed to engagement over divestment to ensure real emissions reductions in the economy. We work with companies we invest in to disclose and reduce emissions, enhance data collection and share key learnings 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 investor participants will identify approximately 40 of the country’s highest GHG-emitting corporations. Participants will also 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 our Clients 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 are critical to the economy and provide livelihoods to millions of people. We support encouraging these companies to transform their business models to transition towards net-zero emissions. 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 aim to limit exclusions and divest only if engagement is unsuccessful.

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 emissions data 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.  

We believe in transparency and reporting on our progress, learnings, and challenges. In addition to our Sustainability Report, some of our asset management companies publish their own sustainable investing reports. They also report on sustainable investing in Client reporting and dashboards. We also publish TCFD disclosures in our Annual Report.

Goals

  • Rigorous incorporation of ESG considerations in all of our investment processes and decisions

     On track

  • $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 - $6.8 billion invested in 2021

  • Net-zero greenhouse gas (GHG) emissions by 2050. We are setting interim targets for investments in 2022. We set this goal across our global operations as well – refer to Trusted and Responsible Business.

    New – established in 2021

2021 highlights

  • $65.2 billion portfolio value of investments in assets and businesses that support the transition to a low-carbon and more inclusive economy2
  • Expanded sustainable investing opportunities

Learn more about our progress and performance in our 2021 Sustainability Report and ESG Performance Tables.

Financing positive impact: Supporting treatment for opioid abuse and addiction

Sun Life is a lender to one of the largest opioid treatment providers in North America serving approximately 67,000 people daily. It’s part of our commitment to funding projects and companies that positively impact people, communities and the planet. 

Learn more

Recognition

GRESB 2021 Logo GRESB 2021 Logo

BentallGreenOak marked 11 consecutive years of excellence and industry leadership in ESG in the 2021 GRESB Real Estate Benchmark. Sun Life’s general account achieved a 5-star rating with a score of 89/100 and ranked first in and named Sector Leader in Developments.

For the second consecutive year, MFS was named an Avant Gardist firm by the Responsible Investment Brand Index.

Sustainable investing-related commitments and memberships

1 RBC Global Asset Management. “ESG in a pandemic world – Executive Summary”. 2021.

2 Includes MFS and SLC Management affiliates (BentallGreenOak and InfraRed Capital Partners).

3 SLC Management, Crescent and MFS are participating.

Logo used with permission from Climate Engagement Canada (CEC). SLC Management is a Founding Participant and Contributor in CEC.

Sun Life Global Investments, SLC Management affiliates (BentallGreenOak and InfraRed) and MFS are signatories.