Scottish Widows will divest £440 million ($570 million) from certain thermal coal, tar sands and controversial weapons stock and bond investments under its new exclusions policy, published Monday.
The majority of the divestment from all Scottish Widows' active and some of its passive investments will take place over the next six months, a spokeswoman confirmed. The new policy applies to life insurance and retirement assets.
The new policy targets companies that derive more than 10% of revenues from thermal coal and tar sands, manufacturers of controversial weapons and corporations that violate human and labor rights.
The firm's previous divestment policy applied to controversial weapons holdings in actively managed funds only.
"As a large institutional investor, we have a vital role to play in shielding our customers from ESG investment risks, as well as influencing positive change through the investments we hold. Our exclusions focus on companies we believe pose the most severe investment risk due to the nature of their businesses, which can't be addressed through engagement," Maria Nazarova-Doyle, head of pension investments at Scottish Widows, said in a news release Monday.
"The growth of these 'at risk' companies is likely to be severely limited by future regulations and the changing views of customers and investors, leading to significant falls in their share prices," she added.
Scottish Widows has a total £140 billion in assets under management.