A giant pension scheme with more than 4 million members is shifting almost 10% of its investments into a new climate change fund designed to move people’s money out of fossil fuels and into renewable energy.
Nest (National Employment Savings Trust), a publicly owned scheme set up by the government, said it was moving £130m into the fund because it wanted to protect its worker members from the risks associated with climate change by reducing their exposure to companies with reserves of coal, oil and gas.
Nest has named oil groups Shell and ExxonMobil as two of the companies in which it is set to scale back its investment, with SSE, one of Britain’s biggest energy firms, one of those likely to be a beneficiary of the new strategy.
The move has been welcomed by climate change campaigners and comes amid an ongoing global carbon divestment campaign that has succeeded in persuading hundreds of institutions, including universities, pension funds and charitable foundations, to dump billions of pounds of shares in carbon-intensive industries. The Guardian has been running its own campaign called Keep it in the ground.
The move by Nest is notable because it is a public body – it was set up by the government to help employers meet their obligations under the automatic enrolment retirement saving initiative, which went live in 2012. Nest is now looking after the pension pots of more than 4 million UK workers, investing £1.5bn on their behalf, and has signed up more than 290,000 employers. These numbers are expected to increase markedly over the next few years, making Nest a major shareholder and, it hopes, a difficult voice to ignore.
Most of the money looked after by Nest is invested in its retirement date funds – there are 47 of these, with each worker put into the one appropriate for their age. It is £130m of this total pot that is being moved into a new “climate-aware” fund managed by UBS Asset Management, which has been developed to allow members to
“benefit from the transition to a low-carbon economy”.
Read more: The Guardian