Nest strengthens voting policy to address backtracking on climate commitments

Nest, the UK’s largest pension scheme by membership, has updated its voting policy to make clear that it may vote against the board chair where a company has materially scaled back its climate strategy without adequate explanation.

The update sets out more clearly how Nest evaluates significant changes to climate-related targets, investment plans or transition timelines and reinforces its expectation that companies maintain credible, transparent transition strategies. Where adjustments are made, boards are expected to provide clear and evidence-based justification to shareholders.

By being explicit about its voting approach, Nest aims to support constructive dialogue with companies and provide greater certainty about how it will exercise its voting rights. As a long-term investor, Nest sees clear governance and accountability as central to effective stewardship.

Nest believes that companies that are run in sustainable ways are better placed to deliver strong, long-term returns. By proactively addressing climate risks and reducing exposure to stranded asset risks, they are more resilient and better equipped to create lasting value for shareholders.

Diandra Soobiah, Director of Responsible Investment at Nest, said:

“This policy update builds on our existing approach. We have engaged — and where necessary, voted against — companies that weaken their climate plans and do not provide adequate transparency to shareholders.  We also expect companies to put material changes to their climate strategy or transition plan to a shareholder vote.
 
“We believe being explicit about how we evaluate these issues supports constructive dialogue with companies. Clearer guidance gives boards greater certainty about how we will approach our voting decisions.

“Our priority remains safeguarding our members’ long-term interests by encouraging responsible management of climate-related risks.”