Scottish Widows hired BlackRock to manage a new £2 billion ($2.6 billion) allocation to active equity with a sustainable approach, a spokeswoman said.
In a move toward more sustainable portfolios, Scottish Widows is funding its first active equity allocation within its default pension investment approach from new contributions, the spokeswoman confirmed. The allocation is being made to the BlackRock Climate Transition World Equity Fund.
Scottish Widows' default passive equity portfolio is £20 billion.
BlackRock will score each company in which it invests on factors such as clean technology, energy management, water management and waste management. The fund excludes controversial weapons as well as companies with more than 5% of their revenues linked to civilian firearms, tar sands or thermal coal.
"Our work with BlackRock to design this new fund, together with our significant investment, will help to engender positive change in the industry," said Maria Nazarova-Doyle, head of pension investments at Scottish Widows, in a new release. "Incorporating environmental, social and governance risks into a portfolio can have a meaningful financial impact on performance."
Scottish Widows has £160 billion in assets under management.
