How investors can use their voice to support long-term savings

When people pay into a pension or investment fund, their money is invested on their behalf in companies and other assets around the world. But investing is not only about where that money goes – it is also about how investors use their influence as shareholders.

One of the ways investors can do this is by encouraging companies to manage the issues that could affect their long-term resilience, from how they treat their workers to how they respond to climate and nature-related risks. This is known as stewardship. In practice, it can involve engaging with companies to encourage them to improve their practices, voting on important shareholder proposals, and working with policymakers and other investors to support positive change.

Why does this matter?

Issues such as climate change, nature loss, inequality and corporate governance can have a real impact on long-term investment returns. By encouraging companies to address these challenges, investors aim to help protect and grow our savings and investments over time.

Key areas of focus

Stewardship activities often focus on key themes. Examples include:

• Climate - helping support the transition to a lower-carbon economy.
• Nature - addressing issues such as deforestation, water management and pollution.
• Social - including human rights, fair pay, diversity and workforce wellbeing.
• Governance - ensuring appropriate policies on issues such as responsible use of AI and management accountability. 

Themes are typically underpinned by good corporate governance, which helps ensure companies are run responsibly and in the interests of shareholders.

Looking beyond individual companies

Many of today's biggest investment risks are systemic – meaning they affect entire economies and markets rather than a single business.

Climate change is one example. Nature loss, artificial intelligence and growing inequality are others. Increasingly investors are taking a systems-level approach, working with policymakers, industry bodies and other investors to help address the root causes of these challenges.

Examples of how Scottish Widows engages with companies it invests in on behalf of customers

Scottish Widows engages directly with individual companies where it believes meaningful improvements can be made. Here are some examples.

Supporting fair pay in the retail sector

In 2025, one of our social engagements involved three major UK retailers: Marks & Spencer (M&S), Next and JD Sports.

We worked with ShareAction, a non-profit organisation that supports investor stewardship, to back shareholder votes calling on retailers to increase transparency around employee pay and working conditions, including on the use of living wages. The resolutions aimed to give investors greater insight into how companies support and manage their workforce.

All three received significant support from shareholders, sending a clear signal to the companies that investors want to see more openness on how workers are treated and paid. The votes at M&S and Next were significant enough to require the companies to respond.

For long-term investors, fair treatment of workers can matter because a motivated and productive workforce can help a company attract talent, improve operational performance and build stronger customer relationships.

Encouraging better water management

Water scarcity and water quality are becoming increasingly important risks for businesses and investors alike. Companies that rely on access to clean, reliable water may face higher costs, operational challenges and greater scrutiny from regulators if these issues are not managed effectively.

In 2025, we engaged with water companies to better understand how they are dealing with challenges such as water overflows, pollution and the impact on nature and biodiversity, and providing reliable water services. These conversations helped us understand how companies are responding to growing environmental pressures and planning for the future. We will use these insights to inform our ongoing discussions with our investment managers and also with relevant regulators and policymakers about responsible water use.

Encouraging responsible use of AI

Artificial intelligence has the potential to transform industries, but it also raises important questions about how it is used and monitored.

Recognising these challenges, we made AI and ethics one of our stewardship priorities and published research exploring the potential risks and opportunities associated with AI (PDF, 2MB).  We have used this research to support discussions with companies, investment managers and industry groups. 

These conversations focus on issues such as protecting personal data, ensuring AI is used fairly and transparently, safeguarding children and vulnerable groups, and making sure companies have appropriate training and oversight of AI systems.  We also discuss the potential impact of AI on jobs and society as well as its environmental footprint. Data centres that power AI can require large amounts of energy and water to operate and keep cool.  

Why engaging with companies matters for investors

Engagement with companies cannot guarantee change, and progress is often gradual. But it gives investors managing your savings and investments a way to raise important issues with companies and encourage better decision-making - looking ahead to the risks and opportunities that may influence long-term returns.

Interested in learning more? 

To learn more about our responsible investment approach and stewardship activity, you can read our latest reports on our website.