On the go: Nest, the government-backed master trust, announced on Thursday that its investment portfolio is free of investments in tobacco companies.
The announcement comes one year ahead of schedule. Nest stated in June 2019 that it would be seeking to divest all tobacco investments within two years.
The scheme, which has more than 9m UK savers, cited falling global smoking rates and stricter worldwide regulation against tobacco products as reasons for its decision.
Speaking at the time, Mark Fawcett, Nest’s chief investment officer, said that “tobacco is a struggling industry that is being regulated out of existence”.
Since making the announcement, the master trust has worked with fund managers to remove all tobacco investments, and has recently sold the final £40m worth of tobacco stocks.
The decision was welcomed by campaign group ShareAction. Lauren Peacock, ShareAction’s campaign manager for the pensions industry, said: “The confirmation by Nest that it is tobacco-free is really welcome news. Tobacco is often a key industry that members feel uncomfortable investing in, due to the huge costs it has on society.
“Divestment is often the last tool available to pension schemes and it is great to see Nest commit to using divestment to both protect the pots of members and consider the impact of their investments on the world.
“Divestment is only impactful if the news is public and companies feel the hit, and therefore it’s great to see Nest announce their intention and follow up on implementation.”
In July, Nest also announced that it would be aiming to make its investments carbon neutral by 2050. The scheme aims to divest investments from companies involved in thermal coal, oil sands and arctic drilling by 2025, and increase investment in renewable projects.
A total of 142 investors in 26 different countries, including the Church of England pension scheme, have signed a pledge to divest from investment in tobacco.
In June 2020, the Universities Superannuation Scheme, the UK’s largest private pension scheme by way of assets, announced plans to exclude and divest from tobacco, as well as other categories including thermal coal and companies with ties to the manufacture of landmines and white phosphorus.
Around 1m smokers in the UK have quit in the past four months, 41 per cent of whom cited the Covid-19 pandemic as a reason, according to figures from charity Action on Smoking and Health.
