Pension provider unveils fresh divestment moves worth a total of £1.5bn

Scottish Widows has tightened its fossil fuel investment policies to reduce its exposure to firms invested in thermal coal and tar sands as part of package of divestments worth £1.5bn, the pension giant announced today.

The company, which manages around £190bn of savings and investments for over six million UK customers, revealed a host of updates to its exclusions policies on fossil fuels and tobacco.

It said it was lowering its current 10 per cent threshold for investment in companies extracting thermal coal and tar sands down to five per cent in order “to reflect the progress made by the leaders in the sector who have been dramatically reducing their reliance on these highly polluting fuels”.

The new policy means Scottish Widows will divest from any company deriving more than five per cent of their business from thermal coal and tar sands, it explained.

In addition, the pension provider has also tightened its policies on tobacco companies, committing to not backing any firm which derives more than 10 per cent of its business from tobacco.

Overall, the tightened exclusion policies amount to £1.5bn-worth of divestments, in addition to £1.4bn previous exclusions announced y the company, which brings the total value of its exclusion policies to almost £3bn, it said.

Maria Nazarova-Doyle, head of pension investments and responsible investments at Scottish Widows, said it was crucial for the firm to take a responsible approach to investing.

“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,” she said. 

“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.”

Want to find out more about how the net zero transition will impact your business? You can still sign up to attend tomorrow’s virtual Net Zero Finance Summit, which will take place live and interactive on Tuesday 29 March and will be available on demand for delegates after the event.

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