Brunel Pensions Partnership targets net-zero as Nest accelerates renewable energy investment

The UK's largest Government-backed pension scheme, Nest, has pledged £250m to renewable energy projects this year, while Brunel Pension Partnership has outlined a new net-zero target.

Pictured: Octopus Renewables' onshore wind farm in Fraisethrope, East Riding of Yorkshire.

Pictured: Octopus Renewables' onshore wind farm in Fraisethrope, East Riding of Yorkshire.

Nest first announced plans to align its financed emissions with the UK’s national, legally binding net-zero target last summer, committing to remove thermal coal, oil sands and Arctic drilling from its portfolio while increasing investments in renewable energy.  Overall, it is targeting net-zero financed emissions by 2050 at the latest, with an interim goal to halve financed emissions by 2030.

Now, the organisation has appointed Octopus Renewables as an energy partner, in a deal that will see it funnel £250m into solar and wind farms in the UK and mainland Europe this financial year.

Octopus Renewables announced the partnership on Saturday (13 March) and stipulated that, if it continues beyond the initial one-year agreement, as much as £1.4bn could be raised for its renewables projects within a decade. Nest notably manages around £16bn of pension savings and claims that divestment could free up around £5.5bn to reallocate to “climate-aware” businesses and projects.

A statement from Octopus Renewables reads: “Our partnership with Nest… points to a shift in institutional attitudes to investment in renewables, who are acknowledging both their power to combat climate change and their potential for generating predictable long-term returns.

“It’s our hope that our partnership encourages other major pension schemes to make similar shifts towards sustainability – at a time when the pressure to take action is growing.”

One source of pressure on the UK’s pensions and investment sector are groups like Extinction Rebellion, ShareAction and Make My Money Matter (MMMatter)– a campaign set up to unify changing demands of consumers to shift the way the sector invests. MMMatter was founded last year by Comic Relief co-founder Richard Curtis.

 “In making a substantial investment in clean energy solutions, NEST has just set a powerful example of how our pensions can be a force for good, tackling the climate emergency and helping us build back better from Covid,” MMMatter’s chief executive Tony Burdon said.

“This move also addresses the financial risk associated with continuing to invest in oil and gas, shifting investment into the new and greener commercial opportunities of the future. Ahead of COP26, we call on all major UK pension schemes to follow NEST’s lead by committing to net zero and by growing their green investment portfolio.”

Brunel Pensions Partnership

The announcement from Nest came shortly after Brunel Pensions Partnership confirmed new net-zero targets for financed emissions.

The firm had already been working with the Institutional Investors Group on Climate Change (IIGCC) to develop and trial a Net Zero Investment Framework (NZIF) over the past year or so.

Late last week, after trials of the NZIF were scaled up, Brunel confirmed that its own internal ambition will be halving financed emissions by 2030 and bringing them to net-zero by 2050. It will use the NZIF to determine the mix of divestment, new exclusions and client engagement it should use to meet these targets.

“This framework provides determined investors with the roadmap they need to address climate issues across their portfolios,” Brunel Pensions Partnership’s chief investment officer David Vickers said. “For Brunel, our focus now turns to building net-zero portfolios in partnership with clients who share our climate ambitions.”

The new pledges mirror those made by several of the US’s biggest institutional investors in recent weeks, in anticipation of the Biden Administration legislating for net-zero by 2050.

Sarah George



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