Powering change with SSE, an investment portfolio ‘ice cube’

Clean energy and sustainable power are crucial to fuelling decarbonisation and a low-emissions future, so make up an important part of the Cushon Sustainable Investment Strategy. We invest in companies that provide the products, services and solutions that will drive change across the economy. And as a leader in this space, we aim to remove 80% of CO₂ emissions from our portfolio by 2030, against the 2022 benchmark. 

Let’s take a closer look at SSE and its positive climate impact. 

Clean energy from the Scottish countryside 

SSE, formerly known as Scottish and Southern Energy, specialise in wind, hydro and solar power as well as storage and battery technologies.  

And it’s not all in Scotland – SSE has sites all across the UK and Ireland, including 51 onshore wind farms, 10 offshore wind farms, 60 hydroelectric power stations, and a series of thermal, hydrogen and carbon capture projects.  

SSE is a great example of an energy company that’s transitioned away from non-renewables to reduce the environmental impact of its operations. . By aligning to an ever-changing landscape, SSE can thrive as a business, presenting a compelling investment opportunity 

In 2020, the company closed its last coal-fired power plants. And since then, it’s been making significant investments in innovative renewable energy technologies. That includes building the world’s largest offshore wind farm, 130km from North England, which is still in development. 

A positive impact with a wide reach 

SSE harnesses and stores power from wind, sun and rivers, then provides this renewable energy to other companies – both industrial and commercial customers – which has a positive impact on the entire supply chain. They also power more than 3 million homes in the UK. 

Not only that, SSE also works to modernise the electricity grid and strengthen UK infrastructure, which leads to better transmission of energy and more capacity to meet the growing demand for clean electricity. From overhead electricity lines to underground and subsea cables, their network covers more than a quarter of the UK’s land mass.  

By 2027, SSE aims to double its renewable net capacity compared to 2022 levels. As both an investor and climate lover, we think that’s a win-win! 

SSE is a valuable portfolio ‘ice cube’ 

‘Ice cube’ investments are those companies which help to cool the environment or limit global warming. Generally speaking, we like these investments, as they help drive the race to net zero while being well-positioned to benefit from the growing energy demand. 

SSE, in particular, is an early mover in its segment. It’s been proactive in phasing out fossil fuels while rapidly scaling up renewable capacity, which demonstrates its long-term role in shaping (and benefitting from) a cleaner energy future. 

For instance, looking forward, the demand for solar energy installations is expected to rise at a compound annual growth rate of 12% until 2030. And that’s only one string to the SSE bow.  

Overall, we believe SSE is a great investment for our portfolio, strongly committed to decarbonisation and full of growth potential for our customers’ pensions. 

We invest in SSE through the LOIM Target Net Zero Strategy, a fund managed by Lombard Odier.  

To learn more about our investments, explore the Cushon Sustainable Investment Strategy or read about our how we invest to tackle climate change. 

Important information on case studies: The case studies provided in this document are for illustrative purposes only and do not purport to be recommendation of an investment in, or a comprehensive statement of all of the factors or considerations which may be relevant to an investment in, the referenced securities. The case studies have been selected to illustrate the investment process undertaken by the Manager in respect of a certain type of investment, but may not be representative of the Fund's past or future portfolio of investments as a whole and it should be understood that the case studies of themselves will not be sufficient to give a clear and balanced view of the investment process undertaken by the Manager or of the composition of the investment portfolio of the Fund now or in the future. 

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NatWest Cushon