Scottish Widows plans to invest £25bn into climate solutions by 2025

Written by Adam Cadle

04/02/2022

Scottish Widows has become the first UK insurer to publish its roadmap to net-zero, planning to invest up to £25bn into companies leading on decarbonisation and climate solutions by 2025.

Its Climate Action Plan said that of the £25bn, £1bn will be specifically invested in climate solutions such as renewable energy, low carbon buildings, and energy efficient technologies. It will ensure climate impacts are at the core of asset allocation decision-making and exclude high carbon investments that are at high risk of becoming stranded assets. In addition, Scottish Widows said it will focus stewardship activity on companies failing to address climate change risks.

An additional £3bn investment has been made in BlackRock’s Climate Transition World Equity Fund. The fund has a bias towards firms with improved climate credentials. This brings the total investment in the fund by Scottish Widows to £5bn.

As part of its ambition to achieving a fully net zero portfolio by 2050, 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 £400m of direct flows into green energy solutions such as wind power generation and solar farms and divested near £1.4bn from companies that haven’t met their ESG standards.

Maria Nazarova-Doyle, head of pension investments and responsible investments at Scottish Widows said: “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.”

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