Our climate change approach

Climate change is one of the biggest issues facing society today and has been recognised by numerous governments as a global emergency. As part of the UK’s largest financial services group, we can make a real difference to tackling climate change by helping to finance a greener future together. This will require not only new ways of thinking, living and working - but new ways of investing too.

We know there’s an urgent need to transition to a low-carbon future and to grow the green economy, both for the prosperity of the UK and help safeguard our customers’ investments and financial futures. Climate change has far-reaching implications in all areas of our lives, including our savings and investments.

This presents us with opportunities to participate in and influence this transition for the long-term benefit of our customers. That’s why we’re setting ourselves an ambitious goal to decarbonise ALL our investments by 2050, backing climate solutions and using our engagement and shareholder voting power to drive companies to make the changes necessary within this timescale.

Our targets

Our Approach to Climate Change

We’re committed to gradually reducing the carbon footprint of our investments to net zero. Net zero refers to achieving a balance between the amount of greenhouse gas emissions, like carbon, produced and the amount removed from the atmosphere.

We’ll do this by investing in companies adapting their businesses to become carbon neutral and those developing climate solutions, while reducing our investment in high carbon-emitting companies.

By taking this action, we’ll be assisting and incentivising companies we invest in to embark on decarbonisation pathways of a scale and pace needed to meet the 1.5°C global warming objective of the Paris Agreement, an international treaty on climate change.

The extent to which we can meet our targets will depend on the pace towards net zero of the wider economy. However, our future investment decisions on asset allocation, company exclusions and shareholder engagement will be driving the transition to carbon neutrality in the real economy.

Why we're taking action

Scottish Widows is a significant shareholder in many of the world’s companies. We believe it’s our responsibility to use our influence to encourage the companies we invest in on behalf of our customers to make positive changes to address climate change at a scale and pace needed to meet the 1.5°C global warming objective.

But equally important is our role to look after the retirement savings of millions of hard-working people and help them plan for their long-term financial prosperity. As a responsible investor we aim to deliver good outcomes for our customers in a sustainable way.

In the decades ahead, we believe climate change will impact the future performance of investments. Taking account of the climate change risks and opportunities for the companies we invest in will be vital to help safeguard our customers’ long-term savings.

Our Approach to Climate Change provides more detail.

Approach to responsible investing

Explore our approach to responsible investing.