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Scottish Widows to divest from

thermal coal and tar sands

GLOBAL UK pensions investor Scottish Widows is to UK, Scottish Widows’ new exclusions policy will
divest at least GBP440mn ($528mn) from com- benefit nearly 6mn UK savers..
panies that maintain their exposure to coal and These exclusions will be applied across the
weapons, among other factors, as it positions group’s life, pension and OEIC funds – including
itself as an ethical investor.. its flagship workplace by default – and will apply
The company said it would withdraw its cash to index trackers as well as its own active funds..
from companies that fail to meet its environ- As part of the policy, the latest step in the
mental, social and governance (ESG) standards, implementation of Scottish Widows’ Respon-
arguing that such risks were now a major factor sible Investment and Stewardship Framework,
in overall investment risk.. Scottish Widows is working with its strategic
It warned this figure could grow much further investment partners to apply the exclusions to
if companies do not take action to improve the the external pooled funds they manage on behalf
sustainability of their business practices.. of a broad range of institutions in order to benefit
The exclusions move follows the insurer’s col- even more UK savers in the future..
laboration with BlackRock to design an innova- Maria Nazarova-Doyle, head of Pension
tive fund that integrates ESG considerations into Investments at Scottish Widows, said: “As a large
its pension funds.. institutional investor, we have a vital role to play
The ACS Climate Transition World Equity in shielding our customers from ESG invest-
Fund backs businesses that decrease carbon ment risks, as well as influencing positive change
emissions, increase clean technology revenue through the investments we hold..
and display more efficient water and waste man- “Our exclusions focus on companies we
agement. The fund also makes significant ESG believe pose the most severe investment risk due
exclusions.. to the nature of their businesses, which can’t be
Scottish Widows’ announcement follows addressed through engagement..
such major industrial names as Toshiba and Sie- “The growth of these ‘at risk’ companies is
mens, which have also this week announced an likely to be severely limited by future regula-
end to new coal investment and commitments to tions and the changing views of customers and
reducing emissions.. investors, leading to significant falls in their share
The insurer is working with its fund manager prices..
partners to begin divesting from firms that pose “We’ve worked hard to implement our exclu-
the most severe investment risk due to the nature sions across our fund range without limiting this
of their businesses.. initiative to our actively managed funds..
Scottish Widows’ new exclusions policy tar- “We’re excluding investments from the index
gets companies which derive more than 10% of trackers which underpin our flagship multi-asset
their revenue from thermal coal and tar sands, funds too..
manufacturers of controversial weapons and “We recognise there’s more we can do as
violators of the UN Global Compact (UNGC) a company and that this is just one step in the
on human rights, labour, environment and cor- journey..
ruption – unless the size and type of investment “However, this underlines our commitment
mean that the insurer can influence positive of becoming a market leader in responsible
change in their business models.. investment and to make a real difference.”.™
As one of the biggest pension providers in the

Week 45 12•November•2020 www. NEWSBASE .com P11