When it comes to climate policy, consistency matters

When it comes to climate policy, consistency matters

Last week’s announcement by the UK Prime Minister to amend the UK’s net zero strategy, was disappointing from an environmental perspective. Among the changes announced was a delay to the ban on the sale of new internal combustion engine cars and gas boilers until 2035 from 2030. The measures have been widely criticised by climate activists and business leaders alike and must call into question the UK’s position as a global leader on climate change.


Well thought-out government policy and regulation, which doesn’t include pushing back on key pledges, are essential to the success of achieving net zero. It is government policy and regulation both at the European and UK national level that has been the key driver of industry investment in renewables and the energy transition. For example, in the UK we have reduced coal’s share of electricity generation from 40% a decade ago to virtually nothing today, while in Norway, electric vehicle sales accounted for around 80% of overall car sales in 2022 (UK take note!).


To-date, the European utility sector has made significant progress in putting into place strategic investment plans to support the transition towards a net zero economy.  Aegon Asset Management’s responsible investment team implement a proprietary climate transition framework to evaluate each investee company’s net zero alignment and transition readiness. Iberdrola, the Spanish utility and owner of Scottish Power, is classified as a “Leader” under the framework. The company has achieved significant absolute greenhouse gas (GHG) emission reductions since 2015 and has already eliminated its coal generation plants. Looking ahead, it has robust targets to further reduce its GHG emissions by 2030 to ultimately reach net zero by 2039 across the full emissions spectrum.   


Consistent and predictable policy supports long-term corporate investment. Supporting such investment plans of companies like Iberdrola as they seek to transition to net zero is a cornerstone philosophy of the Aegon Global Short Dated Climate Transition Fund. 


Note: we hold bonds issued by Iberdrola in the Aegon Global Short Dated Climate Transition Fund.

Important Disclosures

More about the authors

Rory Sandilands Portfolio Manager

Rory Sandilands, portfolio manager, is a member of the investment grade and multi-sector portfolio management teams.

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