Scottish Widows invests £2bn in BlackRock climate transition fund
Scottish Widows is investing £2bn in a new BlackRock fund dedicated to the transition towards a low-carbon economy that it helped design. The UK pension fund provider will be the first investor of the BlackRock Climate Transition World Equity Fund.
This fund uses a new, data-based investment approach that measures a company’s exposure to, and management of, climate change risks and opportunities. Low-CO-emission risks and opportunities have been classified into five categories: energy production, clean technologies, energy management, water management, and waste management.
The fund manager, Jonathan Adams, will focus on companies that are well prepared for the transition towards a low-carbon economy and will reduce exposure to those that are not. It may invest in companies in all sectors and on a worldwide basis.
The fund also includes a number of exclusions, including controversial or nuclear weapons, civilian firearms makers (more than 5% of a company’s revenues), violations of the UN Global Compact, oil sands and thermal coal (more than 5% of a company’s revenues).
A systematic process helps supply the rating methodology and then manages the portfolio in optimised fashion vs. the MSCI World Index parent benchmark.