Scottish Widows targets net zero for £170bn funds

Scottish Widows said on Monday it will become the first UK major pensions and insurance provider to target halving the carbon footprint of all its £170 billion investments by 2030 on its path to net zero by 2050.

The company – which has more than six million customers in the UK – said it will also invest billions of pounds in climate solutions such as renewable energy, low carbon buildings and energy efficient technologies by 2025.

“The ambitious move almost doubles the meaningful commitments the pension industry has pledged to reaching net zero targets, in line with the goals of the Paris Agreement,” said Scottish Widows.

“Moving to net zero will safeguard customers’ investments in the long‐term from the risks associated with climate change while taking advantage of related investment opportunities.

“This will ensure Scottish Widows continues to meet its core purpose of looking after its customers’ savings, as well as helping to power the UK’s transition to a green economy.

“However, a giant £2.17 trillion ‘green gap’ remains as the overwhelming majority of the country’s pension funds and providers have yet to outline meaningful plans to move their investments to net zero.”

Scottish Widows, part of Lloyds Banking Group (LBG), said the road to net zero would “be complex” but it was the right thing to do for customers, for the country and the environment.

Maria Nazarova‐Doyle, Head of Pension Investments at Scottish Widows, said: “Our first responsibility is always to our customers and ensuring we are looking after their investments for the long‐term.

“Moving to net zero will protect savings against climate‐related risks and uncertainty and offer longer‐term sustainable growth by accessing low carbon transition opportunities.

“To get there we must set shorter‐term targets.

“Carbon emissions need to halve between now and 2030 or we won’t stand a chance of meeting the longer‐term net zero goal.

“To do the job properly across all our products and investments, we’ll use our influence through stewardship activity to drive the transition to a low‐carbon future in the real economy, while proactively investing in climate change solutions.

“The journey to net zero will not be easy but we are up for the challenge.

“A company of our scale cannot rely on mass carbon offsetting schemes to provide a false sense of security, or extensive exclusion lists to get results.

“Action that drives change in the real economy is the only way we can achieve the net zero goals …

“The pensions industry holds trillions of pounds worth of investments and can play a game changing role in supporting the global economy’s transition to a low carbon future, while earning sustainable returns for pension savers.

“We are making steady progress as an industry, but it’s not fast enough.

“The reality is we still have a very long way to go to close the green gap to net zero.

“To help prompt the shift to a low carbon economy, others within our sector must also make meaningful, large‐scale net zero commitments that include a dramatic reduction in emissions, if we were to have a chance to get to Net Zero by 2050.”

Catherine Howarth, chief executive at responsible investment charity ShareAction, said: “Kudos to Scottish Widows for their leadership in protecting pension assets, whilst also protecting the environment their customers and clients will retire into.

“The commitment to halve portfolio emissions by 2030 is especially welcome.

“ShareAction hopes to see many more big players in the UK’s pension sector step up in this way by the time of the Glasgow‐hosted COP26 summit.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.