Responsible Investment Policy Octopus Investments

This policy relates to Octopus Investments, Octopus Capital, and Octopus Ventures which serve a variety of investor groups across multiple complementary investment strategies and geographies.  

Our mission is to invest in the people, ideas, and industries that will change the world, and our investment business is connected by a shared conviction that sustainability is a driver of long‐term returns. We hope to encourage the adoption of sustainable thinking across the capital markets and through the wider economy, with sustainability ultimately becoming part of the status quo.   

From our operational processes through to how we assess our investments, and engage across our portfolio, sustainability is an integrated part of our business. We believe that sustainability and financial analysis are inherently interconnected, and that their integration provides deeper insights into investment risks and opportunities. 

Our approach is constantly iterating to stay in line with or ahead of industry best practice. But this policy sets out a standardised, principles-based approach to responsible investment, the application of which is explained in fund level responsible investment policies for each of our investment mandates. 

Our approach to responsible investment:

1. Mission:

Here’s a breakdown of our three core investment themes: 

• Building a sustainable planet: We’re accelerating the transition to a low carbon economy, while protecting nature and enhancing biodiversity.  
• Empowering people:  We’re tackling inequality and improving access to products and services that empower people and build stronger communities.
• Revitalising healthcare: We’re making healthcare solutions more accessible and affordable.

Where our investments target specific sustainability outcomes, we outline an impact investing framework within our fund level policies. 

2. Materiality:

We understand the financial impact that sustainability issues could have on our investments.

We utilise the Sustainability Accounting Standards Board (SASB) materiality map to identify financially material environmental, social, and governance (ESG) issues that could impact the investments we make and manage.  

We also incorporate guidance from the Taskforce on Climate Related Financial Disclosures (TCFD) which helps us understand and develop resilience to climate-related risks: 

• Investment teams identify climate-related risks and opportunities relating to their investments. 
• The materiality of these issues is assessed in 1.5 and 4-degree pathways and over the short and long term. 
• We provide oversight of climate related risks and opportunities in quarterly Responsible Investment Committee meetings.  
• Our Responsible Investment Committee reports annually to the Octopus Investments Executive Committee on performance against this policy 

3. Responsibility:

We think a company’s values and culture are the best indicators of future growth.

As a B Corp we consider the interests of our five core stakeholders (our employees, communities, customers, shareholders and the environment) in everything we do. 

That feeds into how we manage our investments. We actively engage across our portfolios to understand activities and encourage broader thinking about what’s possible by providing support throughout their journey.  

Some of our investment mandates set out hard line exclusions, these form part of their fund level responsible investment policies. 

• People: We look at how companies look after the financial, emotional, and physical wellbeing of their employees.
• Customers: We assess how companies build deep emotional connections with customers.
• Community: We seek to understand how companies engage with the wider community they’re part of.
• Environment: We help companies measure their carbon footprint and encourage them to make the tough decisions that are needed to get to net zero as fast as possible.

Who is accountable for responsible investment: 

We don’t treat responsible investment like an add-on to our investment process. Everyone is responsible and accountable, from our founders and our chief executive officers, through to our investment managers.  

The Board delegates accountability for responsible investment to the Responsible Investment Committee, which has board level representation and is chaired by our Chief Investment Officer. 

The Responsible Investment Committee sets the approach to responsible investment through this Policy and provides oversight over its implementation. Investment teams are responsible for the development and delivery of fund-level responsible investment policies which explain how this principles-based approach is applied to the investment mandates they manage. 

Octopus appoints an external sustainability agency, Groundswell, to provide advice and guidance around the implementation of responsible investment across the investments business.

Active ownership

We take our responsibility as co-owners seriously. We focus on dialogue, engagement, and voting (where applicable) to drive change across our investment portfolios.  

Climate change

Using a new baseline of 2023 data, and using Science-Based Initiative (SBTi) guidance: 

• Octopus Investments has committed to setting near-term science-based targets and has submitted them for validation. 
• Our near-term target for Scope 1 and 2 emissions is to reduce them by 90% by 2030. 
• We aim to reach Net Zero by 2040 or sooner, across our operations and financed emissions (Scope 3 Category 13 & 15). 
• We will purchase quality carbon credits that directly sequester emissions through nature-based solutions to offset the final 10% of our Scope 1 and 2 emissions by 2040. 

More information on our net zero commitments can be found on our Net Zero page. 

Verification

We’re focused on making a genuine impact, and building a genuinely responsible investment business, and we work with third parties that help us achieve that goal.

It’s why we chose to:

• Become a B Corp; 
• Sign up to the United Nations Principles for Responsible Investment (UN PRI), Operating Principles for Impact Management (OPIM), Global Real Estate Sustainability Benchmark (GRESB); 
• Implement guidance from the Sustainability Accounting Standards Board (SASB), Impact Reporting and Investment Standards (IRIS), Impact Management Project (IMP), and the Taskforce on Climate-Related Financial Disclosures (TCFD).