Scottish Widows — part of Lloyds Banking Group — announced it will invest up to £25 billion in companies leading on decarbonisation and climate solutions by 2025.
Widows said it has published its Climate Action Plan, becoming the “first major pensions and insurance provider to clearly define its long-term strategy for achieving its decarbonisation targets and a net-zero portfolio by 2050.”
The pensions and insurance provider also said it has invested a further £3 billion into Blackrock’s Climate Transition World Equity Fund, bringing the total invested by Scottish Widows in that fund to £5 billion.
Scottish Widows – which looks after nearly £190 billion of savings for more than six million customers in the UK – said it has set out four key actions in its Climate Action Plan, which will “enable the halving of portfolio greenhouse gas emissions by 2030 and the delivery of net zero carbon emissions by 2050 whilst maximising their customers’ return on investment.”
It said these actions include commitments to: invest £20 billion-£25 billion into climate-aware investment strategies and climate solutions investments by 2025; ensure climate impacts are at the core of asset allocation decision-making; exclude high carbon investments that are at high risk of becoming “stranded” assets; and focus stewardship activity on companies failing to address climate change risks.
Maria Nazarova-Doyle, Head of Pension Investments and Responsible Investments at Scottish Widows, said: “We believe the move to net zero will offer longer-term sustainable growth for our customers’ pension savings, by leveraging low-carbon transition opportunities among some of the world’s most forward-looking companies.
“Controlling trillions of pounds worth of investments, the pensions industry has a responsibility to act as a responsible steward for the success of climate solutions – and to exclude investments in high- carbon companies which are resistant to change.
“We look forward to other providers joining us and helping set out how the UK pensions industry will achieve large-scale net zero commitments, setting a clear expectation for high-carbon sectors resistant to change.
“Together, we can safeguard the future of our customers’ pension savings – and our planet.”
Scottish Widows has previously committed to halving the carbon footprint of all its investment portfolios by 2030, and last year relaunched Scottish Widows Environmental Fund as fully fossil fuel-free.
In recent years, the company has also financed over £400 million of direct flows into green energy solutions such as wind power generation and solar farms and divested near £1.4 billion from companies that haven’t met their ESG standards.