Nest, the UK’s largest pension scheme, is embarking on a groundbreaking journey towards a more sustainable future with a £5 billion equity fund dedicated to Environmental, Social, and Governance (ESG) criteria. This landmark partnership with Lombard Odier, a renowned investment firm with a strong track record in sustainable investing, marks a significant shift in the pension industry landscape.

Key Points:

• Nest’s Vision: The fund aims to align financial returns with positive societal impacts, prioritizing investments in companies committed to environmental sustainability, social responsibility, and strong governance practices.
• Lombard Odier’s Expertise: Chosen through a rigorous selection process, Lombard Odier brings its cutting-edge roadmap research and robust investment experience to manage the fund across developed markets.
• Financial and Societal Impact: The initiative aims to achieve long-term financial returns while mitigating risks associated with climate change and social inequality, ultimately safeguarding the futures of Nest members.
• £5 Billion Target: By 2030, Nest plans to invest £5 billion in the fund, representing 10% of its developed market equities and 5% of its total assets under management.
• Sustainable Investing Momentum: This collaboration serves as a beacon for the pension industry, encouraging other institutions to embrace ESG principles and contribute to a more sustainable world.

Beyond the Headlines:

• Nest’s commitment is evident in its flexible approach. The initial £1.75 billion allocation will be gradually scaled up, and the 5% target can be adjusted based on market trends and the evolving prominence of ESG themes.
• The fund complements existing efforts like the UBS Climate Aware fund, showcasing Nest’s dedication to responsible investing without disrupting existing portfolios.
• This initiative reflects a growing recognition that sustainable practices are not just ethical but financially sound, offering long-term value and risk mitigation potential.

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Looking Ahead:

Nest and Lombard Odier’s partnership sets a powerful precedent for the future of pension investments. By prioritizing sustainability alongside financial returns, they are paving the way for a more responsible and equitable financial landscape. As the fund flourishes, its impact will extend far beyond Nest members, inspiring positive change throughout the industry and contributing to a more sustainable future for all.