Nest Corporation, as Trustee of the Nest Scheme, recently published its Task Force on Climate-Related Financial Disclosures (TCFD) Report for Nest’s investments 2024/25 in October 2025. The report details the pension fund’s progress and future intentions regarding climate-related risks and opportunities.
Policy Refinement Emphasizes Physical Risks and Climate Solutions
Nest conducted an in-depth review of its climate change policy during 2024. While maintaining the ambition of reaching net zero emissions across its portfolio by 2050, the updated policy includes a greater focus on physical risks, impacts and dependencies on nature and social issues, and the role of climate solutions. The policy now explicitly states that physical risk and adaptation are core components. Additionally, it highlights the importance of addressing the social elements of the transition to ensure it is fair and inclusive, also referred to as a ‘Just Transition’. The policy also seeks to access investment opportunities in climate solutions, such as low-carbon technologies and adaptation finance, to meet the projected funding requirements for net zero emissions by 2050 (page 16, TCFD Report for Nest’s investments 2024/25).
Renewable Energy Infrastructure Investment Nears 2030 Target
Nest is close to meeting its target of investing £1.4 billion in renewable energy infrastructure equity and debt by 2030. As of March 2025, the fund had invested £1.34 billion in this asset class (page 6, TCFD Report for Nest’s investments 2024/25).
First Forestry Investment Made with Campbell Global
Nest appointed Campbell Global to manage its first investment in forestry. This investment is considered to contribute to carbon sequestration and will be reported on in future years. Nest will not be investing in carbon credits through this mandate (page 6, TCFD Report for Nest’s investments 2024/25).
Aladdin Onboarded for Enhanced Climate Risk Analysis
Nest onboarded Aladdin as its new investment risk system. The fund now utilizes Aladdin’s climate data, particularly physical risk metrics, to identify potential risk hotspots within its portfolio (page 6, TCFD Report for Nest’s investments 2024/25).
Manager Expectations Refreshed for Climate Alignment
As part of the climate change policy update, Nest refreshed its manager expectations. All managers are now expected to identify, assess, and manage physical and transition risks, set portfolio-level decarbonization and portfolio alignment targets where feasible, and use stewardship resources to encourage companies to set net zero targets and robust transition plans. More targeted objectives have also been set for individual managers, including asking private markets managers to develop an approach for assessing investment in climate solutions beyond renewable energy (pages 6, 21-22, TCFD Report for Nest’s investments 2024/25).
Default Fund Carbon Footprint Reduction Ahead of Target
Since March 2024, the Scope 1+2 carbon footprint of Nest’s listed equity and fixed income funds in scope of its decarbonization objective has fallen by 30%. This represents a 70% reduction in the Scope 1+2 carbon footprint for these funds since 2019, exceeding the target of a 30% reduction by 2025 from a 2019 baseline. Approximately 53% of the portfolio has a decarbonization target (page 5, TCFD Report for Nest’s investments 2024/25).
Equity Allocation Carbon Footprint Reduced by 5.1%
Over the past year, the Scope 1+2 carbon footprint of Nest’s equity allocation, which constitutes approximately half of the default fund, reduced by 5.1%. This reduction is primarily attributed to changes in the portfolio’s composition and improvements in the carbon performance of held assets (page 5, TCFD Report for Nest’s investments 2024/25).
SBTi-Approved Targets Increase in Default Fund
24.6% of assets in Nest’s default fund now have a Science Based Targets Initiative (SBTi)-approved decarbonization target, an increase from 21% in the previous year (page 5, TCFD Report for Nest’s investments 2024/25).
Investment Committee Questions Manager Engagement and Data Quality
In the past year, the Investment Committee has questioned the implications of fund managers leaving collaborative engagement initiatives such as ClimateAction 100+, the quality of climate metrics data received from investment managers, and the increasing occurrence of extreme weather events and their management (page 12, TCFD Report for Nest’s investments 2024/25).
Exclusions Maintained for Carbon-Intensive Activities
Nest continues to exclude companies that derive more than 10% of their revenues from, or are developing new projects in, thermal coal production or power generation, oil sands, and arctic exploration of oil and gas across the default fund (page 17, TCFD Report for Nest’s investments 2024/25).
2025 and 2030 Decarbonization Targets Set
Nest has set a 2025 target of a 30% reduction in Scope 1 and Scope 2 carbon footprint in its listed equity and corporate bonds portfolios from a December 2019 baseline. A 2030 emissions reduction target of 50% has also been set on the same basis, aligning with the need for global emissions to halve by 2030 to be on track for net zero by 2050 (page 36, TCFD Report for Nest’s investments 2024/25).
Sharia Fund Adds Sukuk, Increasing Carbon Emissions
The Sharia Fund introduced Sharia compliant sukuk as a second asset class, now comprising approximately 30% of the fund. This addition led to an increase in the fund’s overall carbon emissions (page 35, TCFD Report for Nest’s investments 2024/25).
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