On the go: Master trust Nest has partnered with Octopus Renewables to invest £250m in green energy in UK and Europe.
According to Nest, which currently manages more than £16bn in assets, the decision to invest directly in green energy is based on the premise of securing stable, long-term returns for pension savers, coupled with the overall aim of becoming a net-zero carbon investor.
This investment forms part of a broader plan to invest £1.4bn in this space by the end of the decade.
Mark Fawcett, Nest’s chief investment officer, said: “We want to invest in the energy of the future, not the past. The money we manage on behalf of our members needs to provide steady returns for the next 10, 20, 30 years.”
He added that renewable energy projects are fantastic opportunities.
“Every new site provides greater energy security, increases potential returns and contributes to tackling the climate emergency. We want to deliver bigger pensions for our members, in a better world,” Fawcett said.
Guy Opperman, minister for pensions and financial inclusion, praised Nest's decision "to expand into innovative and green markets, and this should encourage other schemes to make the same leap".
"Nest’s action shows that schemes with economies of scale can access alternative investments, including renewable technologies, at a low cost to their members.”
On March 3, chancellor Rishi Sunak revealed the government’s plans for the Build Back Better initiative.
These detail goals to support growth through significant investment in infrastructure, skills and innovation, and enable the transition to net-zero by 2050.
As an investment opportunity infrastructure has come to the fore, as formerly ‘optional’ asset classes become more of a priority, given traditional asset classes have become more challenged financially recently.
Fawcett added: “All minds are focused on how to help Build Back Better from the pandemic and this move means millions of UK pension savers will be playing their part.
“Investing in British green energy means our members will be investing in projects they can see and touch, a tangible connection to their pension and a way out of the climate crisis.
“The strong foundations of this kind of investment should help them achieve great returns for their future while directly investing in the future of the planet.”
