UK’s NEST appoints Co-operative Asset Management as responsible ownership partner

Major new asset owner rounds out ESG suppliers

by Daniel Brooksbank | January 27th, 2012

New UK workplace pension scheme NEST, the National Employment Savings Trust, has named Co-operative Asset Management as its responsible ownership services provider. The fund firm will help NEST engage with investee companies and help it be an “active and prudent” asset owner. NEST is a defined contribution scheme that has the potential to become one of the largest asset owners in Europe. The appointment follows the announcement last month that NEST had hired EIRIS, the not-for profit environmental, social and governance (ESG) research provider, for ESG data. NEST has already tapped F&C Asset Management to run its ethical portfolio while HSBC Global Asset Management has been handed a Sharia-compliant mandate. “We believe responsible investment supports long-term value, reduces risk and supports better member outcomes,” said NEST investment chief Mark Fawcett in a statement.
The Co-operative will work alongside proxy voting firm Manifest. They will work with NEST to help it on ESG issues like executive pay, boardroom diversity, water and carbon emissions and labour practices. They’ll also tackle vote monitoring and help NEST decide when to move to collective engagement with companies alongside other investors. NEST is already a signatory to the United Nations Principles for Responsible Investment, the Financial Reporting Council’s Stewardship Code and is an affiliate of the UK Sustainable Investment and Finance Association (UKSIF). The Co-operative recently said it wouldn’t support directors at companies who fail to disclose targets for getting women on their boards, making it probably the first investor to factor in gender balance to voting policy. NEST is already facing competition from Danish pension giant ATP, which unveiled its NOW Pensions initiative last month. The terms of the contract with the Co-operative were not disclosed.