Nest will vote against board chairs if companies “materially” scale back climate strategies, as part of a new approach to stewardship.
The master trust announced a new voting policy this week with the aim of clarifying its approach to voting on climate-related issues such as energy transition plans and decarbonisation.
Diandra Soobiah, director of responsible investment at Nest, said a more “explicit” approach to engagement and stewardship “supports constructive dialogue with companies” as well as giving companies “greater certainty about how we will approach our voting decisions”.
“We have engaged – and, where necessary, voted against – companies that weaken their climate plans and do not provide adequate transparency to shareholders,” Soobiah added.
“We also expect companies to put material changes to their climate strategy or transition plan to a shareholder vote…
“Our priority remains safeguarding our members’ long-term interests by encouraging responsible management of climate-related risks.”
“As some major banks quietly roll back the climate commitments they made to investors, it matters that a leading pension scheme is prepared to call that out and reflect it in its voting.”
Kelly Shields, ShareAction
Nest and other defined contribution (DC) master trusts have previously warned that their efforts to lower their portfolio carbon footprint have been hampered by companies either failing to engage with shareholders or backtracking on previous commitments.
In a 2024 report from the DC Investment Forum, Nest’s Katherine Lindmeier, a senior responsible investment manager, said momentum had stalled on net zero progress and the master trust could be forced to restrict some of its investments.
Kelly Shields, a senior campaign manager at ShareAction, praised Nest’s move in a statement this week.
“Climate change is already driving up household costs and exposing people to greater financial risks,” she said.
“As some major banks quietly roll back the climate commitments they made to investors, it matters that a leading pension scheme is prepared to call that out and reflect it in its voting.
“With AGM season approaching, Nest’s move sends a straightforward message: if bank boards won’t treat climate risk as a core financial issue, they should expect pushback from responsible shareholders. We urge other pension funds to take the same approach to protect long‑term savings.”
