Nest, UK’s largest auto enrolment pensions scheme, is boosting efforts to tackle the risks posed by climate change.

At the launch of the organisation’s latest Responsible Investment that outlines the changes, Diandra Soobiah, Nest’s head of responsible investment said: “We want to help ensure the world our members retire in is a world they want to live in.”

The scheme’s Climate Aware Fund (CAF) – a key tool which helps give the 99 per cent of members invested in Nest’s default funds exposure to global stocks and shares – already increases investment into companies which are seeking to adhere with the UN’s Paris Accord agreement to limit global warming to 2C. However, Nest wants to go further and is currently testing a more ambitious target of 1.5C.

“Factoring environmental policies into our investment strategy is not only absolutely key to driving better long-term investment results for members but also contributes to global efforts to tackle climate change.” Soobiah added. “The Climate Aware Fund is one of our key tools to help drive investment into green technology while simultaneously removing investment from the biggest carbon emitters. It’s been successful but we have to go further, reflecting the quickly evolving nature of climate change risk.”

Soobiah noted that the Climate Aware Fund allows Nest to put pressure on the worst offending companies, but that it is also seeking to reward companies involved in the supply chain for providing renewable energy equipment, machinery or technology to renewable energy generation companies.

Nest members have already invested more than £1bn through the CAF, of which more than £200m (22.4 per cent) has been reallocated into companies positioned to benefit from a low carbon economy. This includes renewable energy companies like Meridian Energy, EDP renewables and SSE (now part of OVO).

At the same time more than £200m has been withdrawn from companies that need to change but are making little progress on adapting for a low carbon future. This includes utility company KEPCO and oil and gas companies Chevron and Exxon Mobil.

Nest has announced that it has joined Climate Action 100+, adding to $35tr in assets under management from the collective companies signed up to the coalition.

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