Pension fund Scottish Widows this week rolled out four new funds totalling £1.4 billion that will invest in companies seeking to help resolve nature and climate change issues.
The new Global Environmental Solutions Fund, to be managed by Schroders, will invest in companies that provide solutions to environmental issues such as greenhouse gas emissions, food security, pollution, and biodiversity loss, the pension fund announced.
Additionally, three other funds – to be managed by BlackRock and Abrdn – will track decarbonising benchmarks to drive investments in firms involved in environmentally friendly activities.
“We recently called for the industry and government to tackle environmental crisis and nature degradation together through joined up, focussed action. With the launch of our new fund, we’re taking steps ourselves towards driving major investment into better outcomes for the environment as well as for our customers,” said Maria Nazarova-Doyle, Scottish Widows’ head of responsible investments and stewardship, in a press release.
“We have an urgent imperative to support the companies attempting to drive the change our planet desperately needs, while protecting the savings and livelihoods of our members in the long run.”
The fund launches came just two weeks after Scottish Widows released a report outlining steps that could be taken to help direct more investments into nature protection and restoration, which included a call to establish a domestic regulator for the UK carbon offset market to underpin confidence.
The Global Environmental Solutions Fund will invest in companies that derive at least half their revenues from goods and services that facilitate sustainable alternatives in transportation, electricity and heat production, water use, agriculture, or industrial manufacturing, according to the press release.
“Companies that direct at least 20% of capital expenditure to the adaptation of their businesses or products and services to the circular economy are also eligible. As are companies that, in Schroders’ opinion, exert significant influence through their policies and practices over their supply chains or customers to reduce emissions,” it said.
Enterprises addressing biodiversity loss through their own company policies or invest in others that provide products or solutions to biodiversity loss, might also qualify.
Meanwhile, the three equities funds are aligned with the goals of the Paris Agreement and will be used as building block components for over 80 Scottish Widows multi-asset funds, the release said.
“Two of the funds track Paris-aligned indices which facilitate an immediate 50% reduction in carbon intensity, followed by an ongoing 7% reduction year-on-year. The UK fund tracks a Climate Transition index which also facilitates a 7% a year ongoing decrease, from an initial 30% reduction,” it said.
By Stian Reklev – stian@carbon-pulse.com
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