UK pension scheme Nest announced today a new target to reduce carbon emissions by 30% in public equities and fixed income in its portfolios by 2025, on a 2019 baseline.

According to Nest, the new climate target will reinforce its commitment to net zero by 2050 or sooner. In July 2020, the pension scheme unveiled a climate change policy targeting net zero carbon across its investments by 2050, along with commitments to shift nearly half of its portfolio into climate aware strategies, invest directly in green infrastructure, and to divest from companies involved in thermal coal, oil sands and arctic drilling unless they have a clear plan to phase out all related activity by 2030.

Katharina Lindmeier, Senior Responsible Investment Manager at Nest, said:

“The new short-term climate target we’re announcing today should demonstrate not only our commitment on becoming net zero, but also that we’re not hanging around. We want to be on the front foot for such an important issue like climate change to achieve better risk-adjusted returns for our members.”

Today, Nest also announced that it was divesting from five energy companies, Exxon Mobil, Imperial Oil, Kepco, Marathon Oil and Power Assets in its Climate Aware strategy managed by UBS AM, as part of the asset manager’s decision to exit its investments in these companies from its sustainability portfolios, following an engagement process that did not result in sufficient action to prepare for the transition to a low carbon economy.

Lindmeier added:

“COP26 showed the need for immediate action. The prospect of a 2.4C global temperature rise will cause dramatic changes to our ways of life and businesses need to be preparing now to remain profitable and successful.”

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