UK pension regulator’s climate pro moves to state-backed pension fund

David Farrar, a Senior Policy Manager in charge of climate change and responsible investment at the UK’s Department of Work and Pensions (DWP) is being seconded to NEST, the £19bn (€22bn) state-backed fund for UK workplace pensions auto enrolment, to work in a similar capacity. 

Farrar is a well known climate and ESG policy professional in the UK and has been involved in many of the government developments in recent years around ESG and pensions investment. He leaves his role at the DWP today (September 3) and starts at NEST as Climate and Stewardship Policy Manager on September 20. 

Farrar told RI: “After seven years working on workplace pensions policy issues including costs, disclosure, governance and most recently climate change and stewardship, I’m delighted to be joining NEST to take the agenda forward in practice.”

NEST is the UK’s largest defined contribution occupational pension fund. 

Megan Clay will be the DWP’s acting lead on climate and sustainability policy following Farrar’s departure. Clay, a lawyer by background, is on secondment from environmental law firm ClientEarth, where she worked on using litigation to drive greater integration of climate-related financial risk in the corporate and financial sectors.

A spokesperson for NEST said it could not yet confirm the climate and governance work that Farrar will oversee at the fund, but RI reported recently that the fund was tendering for a set of “plausible” climate scenarios to help it gauge its exposure to climate risks.

The scenarios, NEST said, will be used to “assess potential climate-related risks and uncertainties and test the resiliency of various asset classes under different conditions”.

NEST is also looking for proposals for portfolio alignment tools and climate change metrics.

Last year, NEST announced that it would pump £5.5bn (€6bn) – its entire global exposure to development market equities – into the UBS Life Climate Aware World Equity fund as part of an overhaul of its strategy to include a sweeping new climate change policy.