If we want to foster the transition from fossil fuels to renewables, then we’re going to need major financial institutions to shun companies that profit off the extraction or production of these dirty fuels. In that vein, climate campaigners will be pleased to know that the UK’s biggest pension fund is set to begin divesting from fossil fuels.
The government-backed National Employment Savings Trust (Nest) scheme has nine million members and commands upwards of £12.2 billion (roughly $15.8 billion). Under the current divestment plan, the fund will ban investments in any companies involved in coal mining, oil from tar sands, and arctic drilling. On top of that, Nest will shift £5.5bn into “climate aware” investments as it anticipates a green economic recovery from coronavirus.
Although it’s promising to see Nest move away from fossil fuels, the pension fund is resistant in describing its new policy as a full divestment program. It said it remained interested in oil companies that were transitioning from carbon-based fuels to green energy and renewable technology and that it would use its muscle to challenge them and push for stricter targets.
