* Aims to decarbonise portfolio by 2050
* Wants to halve emissions by 2030
* To shift almost half assets to 'carbon-aware' strategies
By Simon Jessop
LONDON, July 29 (Reuters) - Nest, Britain's largest pension
scheme by number of members, said on Wednesday it would toughen
up its climate change investing policy and aimed to fully
decarbonise its portfolio by 2050.
The move by the scheme, which invests the retirement savings
of 9 million workers, is one of the most ambitious to date and
comes as regulatory pressure builds for the industry to better
manage climate-related risk.
As well as the effects of climate change such as rising sea
levels and more extreme weather, companies are at risk of costs
associated with regulatory change and litigation linked to the
transition to a low-carbon economy.
"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," said Mark Fawcett, Nest’s Chief Investment Officer.
"No-one wants to save throughout their life to retire into a
world devastated by climate change," he added.
Nest said it would immediately move 5.5 billion pounds in
shares, or around 45% of its portfolio, to so-called 'climate
aware' strategies, containing companies likely to prove winners
in the energy transition.
The move would be the equivalent to taking 200,000 cars off
the road or heating 50,000 households for a year through
renewable energy, Nest said in a statement.
Nest also said there were some business activities it did
not believe could ever be aligned with the goals of the Paris
Climate Agreement, which aims to limit the rise in global
temperatures.
As a result, it said it would begin divesting from companies
involved in thermal coal, oil sands and Arctic drilling.
Companies with more than 20% of revenues from these
activities would be sold by the end of 2020 and those with more
than 10% of revenues by 2023, with the remainder by 2025 if they
had not put in place a full, accountable phase-out by 2030.
Nest also said it would also invest more of its assets
directly into green infrastructure projects such as renewable
energy and push its external fund managers to help it halve
emissions by 2030.
Nest said it would pressure all its investee companies to
align with the goals of the Paris Agreement and would divest
from those that did not move quickly enough.
(Reporting by Simon Jessop; Editing by Giles Elgood)