The National Employment Savings Trust (NEST) has outlined its approach to protecting members against environmental, social and governance (ESG) risks.
In its first report on the issue, published 10 August, the government-backed master trust said its investments focus on tackling climate change, and transitioning to a low-carbon economy.
NEST said the approach is important to ensure newly engaged savers' pots are protected against potential ESG risks. It also said a responsible approach to investment could provide better long-term returns on investments, boosting members' pots.
The trust said its ESG targets were developed through a consultation with members, consumer groups and industry experts.
Chief investment officer Mark Fawcett (pictured) said the trust's investments needed to reflect its members' concerns.
"We think good quality master trusts have a responsibility to take an active interest in where members' money is invested and act on behalf of their members as owners of securities.
"This means considering a broad range of investment risks and opportunities, including issues like the move to a low carbon economy, the way corporations treat the planet and how companies conduct themselves."
The trust added it would work to improve members' engagement in choosing how their savings are used, as well as use its investment to try to improve markets and encourage the companies it invests in to act sustainably.
ShareAction chief executive Catherine Howarth welcomed the report.
She said: "From very early in its journey, NEST has been open about its intention to become a world-class responsible investor. The results of this effort are now becoming visible in NEST's first report on its responsible investment activity.
"As a member of NEST, which is the scheme used by ShareAction, I particularly appreciate the report's case studies on NEST's priority areas for responsible investment. These give a tangible sense of what is being achieved through the policy."
Newton’s Curt Custard considers the investment outlook for 2021 and the implications for DC schemes
Master trusts’ investment strategies have grown and become more sophisticated over the last three years, but “growing pains” are hindering progress, according to the Defined Contribution Investment Forum (DCIF).
The government will set up an infrastructure bank to support investment and to co-invest alongside investors including pension funds.
The Retail Prices Index (RPI) will be reformed and aligned with the housing cost-based version of the Consumer Prices Index, known as CPIH, by 2030, the Treasury has confirmed.
Estatee agent denies a shareholder’s absence from voting is an issue, finds Minerva Analytics.