July 29, 2020 Read More →

U.K.’s biggest pension fund to divest from fossil fuels

The Guardian:

The UK’s biggest pension fund, the government-backed National Employment Savings Trust (Nest) scheme with nine million members, is to begin divesting from fossil fuels in what climate campaigners have hailed as a landmark move for the industry.

The fund will ban investments in any companies involved in coal mining, oil from tar sands and arctic drilling. But the move puts Nest – a public corporation of the Department for Work and Pensions – potentially at odds with the current pensions minister, Guy Opperman, who earlier this month condemned divestment as “counterproductive”.

Nest, which handles much of the pensions of workers saving under the government’s “auto enrolment” scheme, will shift £5.5bn into “climate aware” investments as it anticipates a green economic recovery from coronavirus.

The ban will mean that some of the world’s biggest mining companies, such as BHP, can never be part of Nest’s share holdings, as long they derive profits from digging coal. It said it will sell its final holdings in BHP by 3 August. Nest will also seek to reduce its carbon-intensive holdings, such as with the traditional oil giants, while investing more money in renewable energy infrastructure.

Nest still has relatively little money under management – around £12.2bn – but it is expected to become a mammoth player in the industry as the savings from millions of workers pour into its coffers in the coming decades.

Nest is hesitant about describing its new policy as a full divestment programme. It said it remained interested in oil companies that were transitioning from carbon-based fuels to green energy and renewable technology and that it would use its muscle to challenge them and push for stricter targets.

[Patrick Collinson and Jillian Ambrose]

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