Scottish Widows has increased its divestment from companies posing an ESG risk to its investments.
In its latest announcement, Scottish Widows which manages £190bn of savings and investments, says it will not invest in any company deriving more than 10% of its revenue from tobacco. This move means all tobacco manufacturers and major distributors are excluded.
Scottish Widows has also expanded its exclusionary policy toward carbon-intensive industries. The company has updated its exclusions policy to lower the threshold for extraction of thermal coal and tar sands from 10% of revenue to 5%. These new divestments add to the £1.4 billion of previous exclusions applied to Scottish Widows’ investments, bringing the total value of the provider’s exclusions to nearly £3bn.
Maria Nazarova-Doyle, Head of Pension Investments and Responsible Investments at Scottish Widows, said: “With responsibility for trillions of pounds worth of investments, it is imperative that the pensions industry champions a responsible approach to investing, creating strong financial returns for savers with the help of active stewardship while divesting from practices that threaten the long-term health of people and our planet. We stand by our belief that carbon-intensive sources of energy such as thermal coal and tar sands will ultimately be replaced by greener renewable sources such as wind or solar. As such, exiting these highly damaging areas and redirecting capital to more climate-aware investments makes perfect investment sense.”