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How we're investing responsibly

The world has seen significant change over the last year. In turn, this has affected the financial markets that your money is invested in.

Our immediate priority is to both protect and grow your money, so you get more out of your pension than you put in. We do that by investing responsibly and sustainably. Here are some of our latest highlights.

Protecting your pot from climate change

A global crisis recently shocked the world. Millions died, people were afraid to leave their homes and our economy ground to a standstill. We are, of course, talking about coronavirus. In a few decades, we could just as easily be describing the next emergency on our horizon: climate change.
But this time, there won’t be a vaccine.
Our investment team constantly assesses how to protect your savings from this looming crisis. After years of hard work, we have a climate change policy that we're proud of.

We’re making our whole portfolio greener

Icon of raised hand with heart inside it

We’ve stopped investing in companies that make most of their sales from certain fossil fuel activities, like thermal coal

We want all the people we invest with to do their part, or we won’t do business with them

We’ll use our voice to influence public policy

85% of people in the UK are concerned about climate change. We’re concerned too. Climate change will make businesses and our economy less productive. You could retire into a vastly different world, facing higher food costs, extreme natural disasters, and pollution-related health issues.

Rather than waiting for policies to be debated, we’re taking the initiative to stop investing in fossil fuels and work towards net zero emissions by 2050, in line with the Paris Agreement. This means balancing how much greenhouse gas is added to the environment because of your pension against what’s taken away. By reducing emissions, we hope to help limit global warming.

We’re also pushing companies to change so they can thrive in world that’s not reliant on fossil fuels, often described as a low-carbon economy.
By acting now, we hope to safeguard your future.

Sustainability in the food industry

As the human population explodes and our diet changes, the global food industry is rapidly consuming natural resources. It affects the environment on a vast scale, from polluting land and water to threatening wildlife and ecosystems with extinction.

Nature’s resources are limited. Experts believe a shift towards greener practices is one of the few ways the sector can be sustainable. And with a rise in environmental awareness spurred by the likes of David Attenborough and Greta Thunberg, eco-conscious consumers join them in calling for change.

The changing food industry

26%

26% of the world’s greenhouse gas emissions come from food and agriculture production

90%

Over 90% of deforestation is driven by agriculture

60%

Over half of all wild animals, reptiles, birds, and fish have gone extinct since 1970

8m

8m tonnes of plastic used in food and drink packaging in Europe
in 2018

70%

70% of consumers would avoid brands that don’t take sustainability or social issues seriously

85%

85% of people have started shopping more sustainably

So, how can Nest make a difference?

We’ve joined the Farm Animal Investment Risk and Return (FAIRR) initiative, a network of investors managing over $69 trillion, to push companies like Tesco and Sainsbury’s away from intensive livestock production and unsustainable business practices.

We think this will help protect their future business model, which in turn feeds profits into your pot. It could also open up new sources of revenue, as the rising popularity of non-dairy milks like Alpro and Oatly and meat-alternative Beyond Burgers have shown the plant-based alternative market is ripe for success.

Supporting the real Living Wage

Staff should be paid a fair day’s wage for a fair day’s work.

This doesn’t just help workers, who deserve to earn a wage they and their families can live on. Cardiff Business School found that 93% of Living Wage-accredited companies saw improvements in recruitment, retention, and productivity. It’s one of the reasons we encourage the companies your money is invested in to pay the real Living Wage.

Recently, we’ve focused on the supermarket sector. Despite recognition as ‘key workers’ through the Covid-19 pandemic, supermarket staff continue to be one of the largest groups of low-paid workers in the UK.

We co-filed a shareholder proposal submitted in the Sainsbury’s annual general meeting, asking them to pay the real Living Wage to all workers and contractors. Although the proposal didn’t pass, Sainsbury’s has since increased pay for its London staff to earn the Living Wage. We’ll continue to push for the Living Wage across all low paid industries.

Taking a stand for diversity

We’re a member of the 30% Club Investor Group, which calls for at least 30% representation of women on company boards around the world. That’s not just because we believe in equal rights.

10x profits

Research into London-listed companies shows that organisations where at least 1 in 3 bosses are women make over 10 times as much profits as male-dominated firms.

We’re thrilled that our support has helped make a difference. As of November 2022, nearly 40% of FTSE 100 board members are women. This milestone should help these companies make more money over the years, in turn growing your pension pot. It also helps build a society where our mothers, sisters and daughters can thrive in the workplace.

We stand for more than gender diversity though. The powerful Black Lives Matter movement has led to people confronting and challenging systemic racism in society, and we’re applying these learnings in our own field.
In 2021, we wrote to 26 FTSE 100 companies who hadn’t appointed any directors from a Black, Asian, or other minority ethnic background on their boards. By 2022, 20 of these companies had appointed a board-level director from a minority ethnic background.

We also ask companies to disclose the gender and ethnic diversity of their workforce, including any pay gaps. If we see a poor track record in any of the companies we invest in, we’ll push for change.

After all, money talks. And with nearly £25 billion of our members’ savings under management, we can make your money shout.

Healthy food, healthy profits

Obesity isn’t just a significant health risk. It affects our economy too, costing the UK £27 billion every year.

The government has introduced a raft of proposals to tackle the cost and accessibility of unhealthy food. And with £2 in every £3 spent on food in the UK going to a handful of supermarkets, they’re on the frontline of any change in regulation. On top of potential controls on advertising, in-store promotions and more, they must also contend with growing public demand for healthier food.

This changing trend could take a bite out of supermarkets’ profits. We’re encouraging them to get ahead of the curve before their revenue is affected – and therefore your pension pot.

Food manufacturers must play their part too. At Unilever’s 2022 annual general meeting, we publicly supported a shareholder proposal calling for it to share how much of their food and drink products were healthy or high fat, salt and sugar products, as well as their sales targets for healthy foods.