The recent ShareAction report – The Engagement Deficit – assessed leading pension providers’ approaches to environmental, social and governance related financial risks across their default funds.

The scoring considered five themes, as below:

  • responsible investment policies and processes
  • engagement with portfolio holdings
  • climate change
  • workforce
  • ethics

The aggregated results showed NEST to be the stand-out leader, scoring 87 per cent – 30 per cent above the second placed provider.

NEST’s leading performance can be attributed to the emphasis placed on responsible investment in its default funds, from asset allocation to engagement, with policies covering a wide range of ESG issues.

The report concluded that other pension providers should follow the example set at NEST, by incorporating a measurable and time-bound target to reduce default funds’ exposure to climate-related financial risks.

To read the full report and see how NEST compared with other UK pension providers follow this link to the ShareAction report.