Scottish Widows Launches £1.4bn Eco-Investment Funds
Scottish Widows has announced a new investment fund, the Global Environmental Solutions Fund, which aims to invest in companies that offer solutions to pressing environmental challenges, including greenhouse gas emissions, food security, pollution, and biodiversity loss, directing pension investment towards these efforts.
This new fund is part of a set of strategies applying to £1.4 billion in assets. It targets companies that promote alternative energy generation and supply, sustainable transportation and infrastructure, clean mobility, forestry, sustainable agriculture, biodiversity preservation, and pollution prevention.
In collaboration with fund manager Schroders, Scottish Widows created the fund, which focuses on investing in companies that generate a minimum of 50% of their income from producing goods and services that enable sustainable solutions in transportation, electricity and heat production, water usage, agriculture, and industrial manufacturing.
Schroders considers companies that spend at least 20% of their capital expenditure on adapting to a circular economy as eligible for the fund. Companies that have significant influence over supply chains or customers to reduce emissions are also eligible.
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The new fund also seeks to combat biodiversity loss by investing in and engaging with companies that offer solutions to the problem or implement measures to address it. Schroders aims to eliminate the fund's exposure to commodity-driven deforestation in its portfolio companies by 2025 as part of its Plan for Nature initiative.
Scottish Widows' Maria Nazarova-Doyle stated that their new Global Environmental Solutions Fund is a step towards directing major investment into better outcomes for the environment and customers. The company aims to support firms driving the change needed to protect the planet while safeguarding their members' savings and livelihoods in the long run. Nazarova-Doyle also emphasised the need for collaborative efforts to ensure innovative solutions to the environmental crisis become a reality.
Scottish Widows has launched three regional equities funds that track decarbonising benchmarks. These funds, managed by BlackRock and Abrdn, invest in companies transitioning to a low carbon economy, helping Scottish Widows' aim to halve the carbon footprint of its investments by 2030 on the way to net zero emissions 2050.
The funds are Paris Agreement-aligned and will serve as building block components for over 80 multi-asset funds. Two of the funds track Paris-aligned indices with a 50% initial reduction in carbon intensity, while the UK fund tracks a Climate Transition index with a 30% initial reduction.
Source: Scottish Widows