Nest signs up to UN investment code

Nest has signed a United Nations-backed investment code that commits schemes to responsibility in environmental, social and governance issue.

The National Employment Savings Trust (Nest) has become a signatory to the UN-backed Principles for Responsible Investment (PRI). It is one of just 120 UK schemes to sign up, and 930 worldwide.

According to Nest it has already implemented PRI compliant practices by:

• Formally assessing the capabilities of external investment managers to incorporate environmental, social and governance (ESG) issues
• Using a responsible ownership specialist provider to address ESG issues with investee companies
• Using a specialist provider of ESG data to help construct a ESG risk model

Nest chief investment officer Mark Fawcett (pictured) said: ‘Signing the PRI delivers on a commitment we made earlier this year when we announced our approach to investing members’ money.

‘We also believe that investing responsibly enhances long-term value and reduces risk, and we have therefore embodied this view within our investment beliefs.’

As well as its default target date funds Nest offers member’s the option of an ethical and a Sharia fund.

The ethical fund invests in actively managed global equities and UK government bonds.

The equity portion will be invested in the F&C Stewardship International Fund, run by Sophie Horsfall. Companies will be screened to exclude investments in companies with poor track records on human rights, the environment and corporate governance.

The Sharia fund will invest solely in the HSBC Life Amanah Pension Fund. It is a passive tracker of the Dow Jones Islamic Titans 100 index; a global equity index run on Sharia principles.

All target date funds will all target a return of 3% above the consumer prices index measure of inflation. However members can add a higher risk fund or a capital protection strategy for older people.