Scottish Widows is committed to…
Being responsible investors of the assets our customers are invested in
Most of our customers will invest with us for decades and major risks that are on the horizon will impact their savings if we don’t take action now. We’re a long-standing signatory of the UN Principles for Responsible Investment* and are committed to being responsible stewards of the assets we oversee on our customers’ behalf.
Striving to influence the companies we invest in to make positive changes
We focus our stewardship activity on companies which are failing to address climate change risks. This is in line with our aspirations as a member of the Institutional Investors Group on Climate Change**. We challenge them to report on the financial impact of climate change on their business, to improve their business practices and reduce their carbon footprint.
We delegate most of our shareholder voting to our fund manager partners. We work with them to understand their voting practices and monitor their voting activities. This ensures their approach to issues, like climate change, preserves or enhances the value of investments. We will take action if we have material concerns.
Engagement and Exclusions Policy
We aim to influence the companies we invest in to make positive changes. When we’ve a significant investment in a company and have concerns about their practices, we’ll always engage with them first. Where we don’t see material progress, we’ll use our shareholder rights to challenge the company, and will sell our shares where it is clear that progress won’t be made.
When implementing our exclusions policy, we recognise that removing all bad performers on material Environmental, Social and Governance (ESG) factors would mean we lose the opportunity to drive positive changes by engaging with these companies. So, we restrict our exclusions to companies involved in controversial activities like weapons manufacturing, coal and tar sands extraction, and tobacco production and distribution, where engagement would make no difference.
Our Exclusions Policy (PDF, 5MB) provides more detail.
Read our case for tobacco divestment (PDF, 782KB)
When selecting fund managers, we pay particular attention to their abilities to identify ESG risks and opportunities and to engage with companies they invest in on important issues. We hold them to account, insisting that they demonstrate that they’re doing what they have committed to.
Our Stewardship Policy (PDF, 2MB) provides more detail on what we do and how we do it.
Our core stewardship priorities are defined on a three-year rolling basis and reviewed annually for continued effectiveness. Our priorities for the 2020–2023 period are Climate & Carbon and Board Diversity.
Our Approach to Climate Change (PDF, 5MB) outlines how we working towards the decarbonisation of our investments to net zero by 2050.
Our Cognitive Diversity in the Boardroom report (PDF, 1MB) provides insight into why we believe this is important to the long-term success of the businesses we invest in on behalf of customers, helping them make better decisions and drive growth.
Our latest Responsible Investment and Stewardship Report outlines the progress we made in 2021 to deliver on our plans to benefit our customers’ investments and broader society.
*Principles of Responsible Investment: United Nations-supported international network of investors which works together to put into practice Principles for incorporating ESG issues into investment.
**Institutional Investors Group on Climate Change: The European body for collaboration between institutional investors on climate change.