Scottish Widows warns of tougher action on lagging asset managers as it issues its latest Stewardship Report


INSIGHT by Scottish Widows

Scottish Widows’ latest Stewardship Report reveals where investment managers are falling short on voting 

The pensions provider has now surpassed the first of its core climate targets, two years ahead of its 2025 deadline, with £1.3bn of an intended £1bn now invested into climate solutions 

Report also reveals the deforestation risk analysis of Scottish Widows portfolio, after close examination of £124bn of assets  


For the first time, Scottish Widows has conducted a comprehensive analysis of the voting records of its main managers and published the results in its annual Stewardship Report. In accordance with the findings of the analysis, the company is accompanying the publication of today’s report with a stark warning to those found to be in misalignment with its voting guidelines. 

In its latest Responsible Investment and Stewardship Report, the pensions firm also reveals that it has delivered on the first of its core climate targets and is now taking steps to incorporate nature-positive thinking more thoroughly into its approach. In a rare industry insight, today’s report shares the results of analysis of the exposure of the firm’s portfolio to the issue of global deforestation.  

The report, now in its third year, provides transparency on Scottish Widows’ actions in the promotion of positive ESG outcomes throughout the firm’s investment portfolios. It details the voting activity and engagement on material ESG issues observed among Scottish Widows’ main asset managers over the last year, highlighting instances of managers’ failure to meet expectations on core issues.  


| Taking a harder line with investment managers 

In collaboration with a number of other UK pension funds, Scottish Widows has called a meeting with its main managers this autumn to discuss concerns regarding alignment with its voting positions. The event will mark the first ever collective engagement exercise run by an asset owner community for its asset managers, as opposed to investee companies. 

Scottish Widows has also asked its managers to pay particular attention to updates to its voting guidelines after it refreshed its priority themes last year.  

While the existing theme ‘Board Diversity’ remains unchanged, the new ‘Climate and Environment’ theme is far more focussed on nature than its ‘Climate and Carbon’ predecessor. The new area of ‘Human Rights’ sees the company engaging more actively on issues concerning working conditions, employee wages and supply chains. 



“While we have been pleased with the positive strides we have made with our investment managers over the last year, there is still more that needs to be done to ensure activity is aligned with our guidelines – particularly as our thematic priorities continue to evolve. Strong stewardship is the foundation of any responsible investment approach and a bedrock for protecting and enhancing value for our customers in the long-term. 

 “Given that voting is just one tool of stewardship, I am also concerned about the quality of investee companies engagement happening behind closed doors.  

 “If managers fail to act in line with our priority, which will always be the interests of our beneficiaries, we will have no choice but to take action. We are hopeful that our meeting with our managers this autumn will result in positive outcomes for all parties.” 

-Maria Nazarova-Doyle, Head of Responsible Investments and Stewardship at Scottish Widows



| Core climate target achieved, two years ahead of time 

Today’s report also shares detail on Scottish Widows’ own ESG accomplishments from the last year. The company has now officially surpassed the first of its core climate targets a staggering two years ahead of its 2025 deadline – having invested £1.3bn of an intended £1bn in climate solutions.  

After increasing investment in climate-aware strategies by £12 billion in 2022, the company has also now invested £17.5 billion of its £25 billion target in this area, with over two years remaining before the end of 2025 deadline. 

In the past year alone, major climate-aware investments included in this target range from pouring £328m into green initiatives by housing associations to support retrofitting and energy efficiency improvements, to investing £30m into Zenobe, the UK’s leading electric bus provider. 

 As Scottish Widows continues to further integrate nature into its stewardship approach, today’s report also includes extensive analysis conducted over the last year of the exposure of the firm’s portfolio to deforestation. £124bn of corporate exposure was analysed, with companies categorised as ‘high-risk’ amounting to 12% of corporate exposure. This proportion increased to 28% when including the banking sector. 

Following the analysis, the company’s immediate next step is to identify priority targets for engagement. In the longer term, however, Scottish Widows’ aim is to complement this deforestation exposure analysis with that of other nature-related indicators, in order build a more holistic view of the real impacts and risks inherent to its current portfolio.


Read the full report 

Responsible Investment and Stewardship Report




| about

Founded in 1815, Scottish Widows is part of Lloyds Banking Group, the UK’s largest digital bank and financial services group. With nearly £170bn assets under administration and 6 million customers, Scottish Widows’ award‐winning product range includes workplace and individual pensions, annuities, life cover, critical illness, income protection as well as savings and investment products. Customers can access our products and services through independent financial advisers, directly, and through all Lloyds Bank, Bank of Scotland and Halifax branches.

All opinions expressed are those of the author and/or quoted sources. is an independent and neutral platform dedicated to generating debate around ESG investing topics.