National Employment Savings Trust, London, converted an existing about £1.5 billion ($2.1 billion) bonds allocation with Wells Fargo Asset Management to a strategy with a climate transition focus, a spokesman confirmed.
NEST has in place two global investment-grade corporate bond allocations with WFAM, both long and short-dated, the spokesman said. The allocations will remain with WFAM but will now have a new climate strategy incorporated, allowing NEST executives to more accurately measure carbon emission reductions against the multiemployer plan's benchmark.
The Climate Transition Global Investment Grade Credit strategy aims to support the climate transition and decarbonization of the economy, combining meeting financial objectives for active fixed income with a specific set of climate goals. The goals include identifying companies that are best-placed and prepared to perform through the low-carbon transition; using exclusions in a targeted way; initially reducing the portfolio's weighted average carbon intensity to at least 30% below the benchmark; and moving to net-zero by 2050.
"The response of WFAM to our climate change policy has been excellent," Diandra Soobiah, head of responsible investment at NEST, said in a WFAM release. "Their strategy provides us with a robust and measurable framework to decarbonize over time and support the climate transition, helping us to align our portfolio with our net-zero ambitions. It's important fund managers take the risks of climate change seriously."
WFAM has more than $590 billion in assets under management.