Maria Nazarova‐Doyle

The company – which has more than six million customers in the UK – will also be investing billions of pounds in climate solutions, such as renewable energy, low carbon buildings, and energy-efficient technologies, by 2025 to underline its commitment to positive change.

The ambitious move almost doubles the meaningful commitments the pension industry has pledged to reaching net-zero targets, in line with the goals of the Paris Agreement.

Moving to net-zero will safeguard customers’ investments in the long‐term from the risks associated with climate change while taking advantage of related investment opportunities. This will ensure Scottish Widows continues to meet its core purpose of looking after its customers’ savings, as well as helping to power the UK’s transition to a green economy.

However, a giant £2.17 trillion ‘green gap’ remains as the overwhelming majority of the country’s pension funds and providers have yet to outline meaningful plans to move their investments to net zero.

Scottish Widows, part of Lloyds Banking Group, said the road to net-zero would be complex but it was the right thing to do for customers, for the country and the environment.

The pensions firm is calling on the rest of the industry to urgently close the ‘green gap’ and commit to net-zero with a clear path to get there ahead of the COP26 global conference on climate change later this year.

Pension providers need to shift from the current piecemeal approach to a wholesale net-zero investment strategy with clear shorter‐ and medium‐term milestones that are understood by the public, customers and policymakers.

Maria Nazarova‐Doyle, head of pension investments at Scottish Widows, said: “Our first responsibility is always to our customers and ensuring we are looking after their investments for the long‐term. Moving to net-zero will protect savings against climate‐related risks and uncertainty and offer longer‐term sustainable growth by accessing low carbon transition opportunities.

“To get there we must set shorter‐term targets. Carbon emissions need to halve between now and 2030 or we won’t stand a chance of meeting the longer‐term net-zero goal.

“To do the job properly across all our products and investments, we’ll use our influence through stewardship activity to drive the transition to a low‐carbon future in the real economy, while proactively investing in climate change solutions.

“The journey to net-zero will not be easy but we are up for the challenge. A company of our scale cannot rely on mass carbon offsetting schemes to provide a false sense of security, or extensive exclusion lists to get results. Action that drives change in the real economy is the only way we can achieve the net-zero goals.”