Scottish Widows cuts $2 billion in investment in tobacco and coal


Cigarettes are seen in this illustration photo from May 24, 2017. REUTERS/Thomas White/Illustration

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LONDON, March 28 (Reuters) – Britain’s Scottish Widows pension fund will no longer invest in tobacco stocks and will further reduce its investment in coal as it broadens its responsible investing strategy, it said. Monday.

Scottish Widows, part of Lloyds Banking Group (LLOY.L), said it added a further 1.5 billion pounds ($2 billion) to its exclusions, leading to full divestitures of businesses seen as a threat to the environment, social and governance of the pension provider (ESG) to 3 billion pounds.

The company said it would not invest in any company that derives more than 10% of its revenue from tobacco, which it said excluded all tobacco manufacturers and major distributors.

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“Industries such as tobacco are at serious risk of becoming stranded assets, as they face intense pressure from investors, regulators and consumers, and consistently fail to properly address the social impacts of their products and within their supply chain,” said Maria Nazarova-Doyle. , Head of Pension Investments and Responsible Investments at Scottish Widows.

Scottish Widows, which has £190bn in assets under administration, also said it would lower the threshold for investing in companies mining thermal coal and tar sands, the dirtiest fossil fuels, to 5 % of income versus 10%.

Quitting smoking follows similar initiatives by financial institutions such as Credit Agricole (CAGR.PA) and Aviva (AV.L).

Insurers and investors such as Swiss Re (SRENH.S) have also toughened their policies on fossil fuels as companies increasingly focus on environmentally sustainable investments. Read more

($1 = 0.7582 pounds)

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Reporting by Carolyn Cohn; Editing by Edmund Blair

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