Scottish Widows has refreshed its Environmental Fund which will invest hundreds of millions of pounds in green British businesses, the life insurance and pensions company has announced.
The £250m fund, which will be 100 percent fossil-free, aims to deliver strong growth for savers and is available to six million customers.
An estimated £50bn will be needed to fund the transition to a green economy in the UK alone every year from 2025-2050, according to information from the Climate Change Committee’s Sixth Carbon Budget. Sustainable businesses will benefit from such an opportunity and with the UK and other major economies looking to meet their net zero commitments, the emerging green economy is expected to grow rapidly over the next ten years.
Scottish Widows research highlights that 56 percent of Defined Contribution pension savers would consider investing their pension funds in clean, fossil fuel-free energy. More customers are driving the shift towards greener investments, for ethical reasons as well as to benefit from strong returns.
The ‘rebooted’ fund will invest in companies making a positive impact on the environment through their products and services, and in environmental leaders making a difference with their progressive policies.
The fund does not invest in any companies that are involved in fossil fuels in any way and it also excludes firms that receive revenue from nuclear energy.
The original fund set up in 1989 was relaunched to provide impact investing to Scottish Widows’ customers, as part of its Responsible Investment and Stewardship Framework.
Maria Nazarova-Doyle, Head of Pension Investments at Scottish Widows, said: “The launch of our refreshed Environmental Fund offers our customers an opportunity to engage in environmental impact investing, an approach that not only aims to achieve good financial returns but sets out to have a measurable and positive impact on the environment.
“Responsible investing enables investors to seize new opportunities and manage risk. By investing in this fund, customers can help address some of the global challenges we face in areas such as climate change, sustainable agriculture, pollution and renewable energy.”
One of the companies to receive backing is waste management firm Biffa.
Michael Topham, Chief Executive at Biffa, said: “Biffa has a defining and important role to play in delivering more sustainable solutions to help combat the UK’s waste challenge and I’m proud of the progress we’ve already made in contributing to a sustainable future built around a circular economy; educating our customers, government and the wider public to use materials responsibly and re-using as much as possible.
“We have committed to unlocking £1.25bn of investment in vital UK green infrastructure by 2030. It is great to see that there is a wider interest in green investments that help to tackle global challenges and it's encouraging that Scottish Widow has recognised Biffa as a strong environmental investment."
Earlier this year, Scottish Widows announced plans to reach net zero by 2050 across its entire portfolio of investments, and last November the firm announced that it would divest an initial £440m from companies that have failed to meet its environmental, social and governance (ESG) standards.