Nest, the UK’s largest workplace pension scheme, has stiffened sanctions against portfolio companies that scale back on climate commitments in its 2026 voting policy update.
The £60 billion (US$79.76 billion) fund will now consider voting against board chairs where a company has materially scaled back its climate strategy without adequate explanation. This strengthened stance aims to provide greater certainty to boards about how Nest will exercise its voting rights to ensure long-term value for its 14 million members.
The policy update reinforces Nest’s expectation that companies maintain credible net zero transition plans, requiring evidence-based justifications for significant changes to climate targets and investment plans. The scheme is also taking a firmer line on executive accountability for biodiversity. Nest has signalled it may vote against the re-election of sustainability committee chairs at companies in high-risk sectors that lack clear policies to eliminate commodity-driven deforestation.
Nest has co-filed a shareholder resolution alongside the Australasian Centre for Corporate Responsibility (ACCR) seeking enhanced transparency on BP’s plans for increased capital expenditure for new oil and gas projects. This action aligns with Nest’s new guidelines for the oil and gas sector, which explicitly state the scheme will not support transition plans from companies that continue to develop new oil and gas fields.
However it has not publicly supported a resolution filed by Dutch campaign group Follow This requesting BP disclose strategies for creating shareholder value under scenarios of declining oil and gas demand. BP has sought to exclude the latter on grounds it does not meet legal requirements.
Diandra Soobiah, Nest’s Director of Responsible Investment, said that the update supports constructive dialogue by giving boards clearer guidance on how their decisions will be evaluated in the interest of safeguarding members’ long-term financial futures.
“We have engaged — and where necessary, voted against — companies that weaken their climate plans and do not provide adequate transparency to shareholders. We also expect companies to put material changes to their climate strategy or transition plan to a shareholder vote,” she said.
“We believe being explicit about how we evaluate these issues supports constructive dialogue with companies. Clearer guidance gives boards greater certainty about how we will approach our voting decisions.”
NGO ShareAction has praised the move, noting that as some major banks quietly roll back climate commitments, it is vital for leading pension schemes to demand accountability.
“With the AGM season approaching, Nest’s move sends a straightforward message: if bank boards won’t treat climate risk as a core financial issue, they should expect pushback from responsible shareholders. We urge other pension funds to take the same approach to protect long-term savings,” said Kelly Shields, Senior Campaign Manager at ShareAction.
