Wednesday 29 July 2020 11:44 am

UK pension scheme invests £5.5bn into 'environmentally friendly strategies'

Britain’s largest pension scheme Nest has pledged to tighten its climate change policy with an investment of £5.5bn into environmentally friendly strategies.

The government-backed scheme said it would decarbonise its £12bn investment portfolio in a bid to tackle climate change. Nest said it aims to be “net-zero” across its investments by 2050 or earlier, with the expectation that carbon emissions in its portfolio will halve by 2030.

Read more: Blackrock punishes 53 companies over inaction on climate change

A number of institutional investors and asset managers, notably Blackrock, have spoken out about global warming. The fund manager revealed huge changes at the start of the year in an attempt to position itself as a leader in sustainable investment.

Nest has said it will move £5.5bn of shares into “climate aware” strategies, which will represent 45 per cent of the scheme’s entire portfolio. It said it would reduce Nest’s carbon footprint “by the equivalent of taking 200,000 cars off the road”.

It said it will also start divesting from companies involved in thermal coal, oil sands and arctic drilling and be completely divested by 2025 at the latest, unless they have a clear plan to phase out all related activity by 2030.

Read more: Bank of England to review climate impact of corporate bond-buying after crisis

Chief investment officer Mark Fawcett said: “Just like coronavirus, climate change poses serious risks to both our savers and their investments. It has the potential to cause catastrophic damage and completely disrupt our way of life. No-one wants to save throughout their life to retire into a world devastated by climate change.”

“As the world’s economy slowly recovers from coronavirus, we want to ensure this recovery is a green one. We have a unique opportunity to support sustainable growth and transition towards a low-carbon economy.”

Nest also said it would also invest more of its assets into green infrastructure such as renewable energy and push its external fund managers to help it halve emissions in a decade.

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