Scottish Widows using pension power to fight climate change in £1.4bn green fund launch
Pension giant Scottish Widows has launched £1.4bn worth of new green funds today which it said it will inject into companies “helping to resolve nature and climate issues”.
The Edinburgh-based firm, which has around £170bn assets under administration and six million customers, said four new funds would invest in firms tackling clean energy, clean mobility, sustainable transport and infrastructure, and biodiversity preservation and pollution prevention.
Firms will need to make at least 50 per cent of their revenues from green goods and services or direct at least 20 per cent of investment into adapting their firms for the circular economy, Scottish Widows said.
“We have an urgent imperative to support the companies attempting to drive the change our planet desperately needs, while protecting the savings and livelihoods of our members in the long run,” said Maria Nazarova-Doyle, responsible investment and stewardship chief at Scottish Widows.
Asset manager Schroders was called in to manage the new Global Environmental Solutions Fund, which will look to eliminate exposure to commodity-driven deforestation by 2025. Three other funds will be managed by Blackrock and Abrdn and will track decarbonising benchmarks. The firm said they will look to invest in firms driving the transition to a low-carbon economy”.
The move comes amid a wider push from campaign groups to strip out carbon-intensive investment from the UK’s pension cash.
Some £1.3 trillion of UK pension cash is now invested in schemes committed to halving emissions before the end of the decade, according to campaign group Make My Money Matter.
The group estimated in 2021 that the UK pensions industry enabled more CO2 than all UK carbon emissions, with schemes funding an estimated 330m tonnes of carbon emissions every year.
Ministers announced measures last year to boost transparency around green pension investment which will require schemes to measure and publish how their investments support the Paris climate goals.
The measures would allow pension to “see the impact of their investments and better understand how climate risks are being considered and mitigated” for the first time, the government said last year.