Scottish Widows is looking to invest up to £25bn by 2025 in companies which are proactively tackling climate change.
The firm said at least £1m would be invested in firms developing climate solutions, such as alternative green energy, sustainable agriculture, and pollution prevention.
The company has already targeted halving the carbon footprint of its investment portfolios by 2030, and aims to reach net zero across the entirety of its investments by 2050.
Maria Nazarova-Doyle, head of pension investments and responsible investments, said: "We’re announcing another major milestone in our journey to net zero by committing to invest at least £20-£25bn by 2025, in companies that are pro-actively adapting their businesses to be less carbon-intensive or are developing climate solutions.
“At least £1bn of that figure will be invested to fund companies developing new, sustainable ways of living and working. This huge new investment starts today and will accelerate and grow rapidly over the next four years.”
She added: “By committing to gradually reduce the overall emissions contained in our investment portfolios to net zero, we’ll be supporting and incentivising companies we invest in to decarbonise at a scale and pace to meet the 1.5°C global warming objective of the Paris Climate Agreement.
“This isn’t just about doing the right thing for the planet. Growing our customers’ savings is always our number one priority – and that means reducing the financial risk which carbon intensive companies increasingly represent, along with seizing the huge growth opportunities the green economy offers.”
Scottish Widows has partnered with Blackrock and Schroders to develop a range of funds which favour investing in companies that are pro-actively adapting their businesses to be less carbon-intensive.
When deciding what firms to invest in, Scottish Widows looks at the proportion of company revenue associated with activities such as alternative energy, energy efficiency, green buildings, sustainable agriculture, sustainable water and pollution prevention.
Last week (November 10), the company said it is releasing a tool to allow workplace savers to find out how environmentally friendly their investments are.
The tool assesses companies’ carbon footprint, waste and board diversity so members can see where their money is invested and whether these companies are making a positive impact across these areas.
amy.austin@ft.com
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