Nest's climate-conscious equity investment increases to a staggering £22.8bn.
The UK master trust Nest has seen a significant surge in its investments in climate-aware equities, doubling its holdings from £12.6bn to nearly £23bn over the past three years. This growth, as revealed in the Fund's Annual Reports and Accounts released last week, is indicative of a growing trend towards sustainable investing.
Nest, with close to 14 million members, has attributed this increase to strong growth from member contributions. The surge in assets has allowed Nest to expand its commitment to climate-conscious investing within its equity strategies.
The UBS mandate, which accounts for 40% of Nest's overall assets, aims to reduce investment in the biggest greenhouse gas and carbon emitters and invest more in green technology like solar and wind farms. This mandate has been expanded as a segregated mandate, offering Nest more flexibility to establish climate tilts.
As a result of this surge, Nest's current climate-aware equity allocation stands at £22.8 billion in 2025. This growth reflects Nest's substantial expansion in its commitment to climate-aware investing.
Nest appointed UBS to manage its developed equity strategy in 2011. Since then, the partnership has been instrumental in Nest's rapid growth, with the pension fund receiving more than £8bn in annual contributions.
The surge in Nest's investments in climate-aware equities is significant, as it represents a substantial portion of its overall assets. With assets growing to £49.7bn over the year, compared to £29.6bn in 2022, Nest is on track to witness further rapid growth.
This shift towards sustainable investing by Nest is a positive step towards a greener future. As more institutions follow suit, we can expect to see a continued increase in investments in climate-aware equities, driving innovation and growth in the green technology sector.
Science shows that climate-change poses severe environmental challenges, making it crucial for funding sources to address this issue. The surge in Nest's investments in climate-aware equities, driven by member contributions and partnerships with finance giants like UBS, reflects a trend of sustainable investing that can financially support environmental-science innovations.
