Science-based targets and renewable energy investments: Credit Suisse and Nest unveil first steps towards net-zero

Swiss investment bank Credit Suisse has unveiled a string of new climate measures, in the same week that the UK’s largest pension scheme, Nest, outlined steps to help it meet its net-zero goal.

At a virtual Investor Update on Tuesday (15 December), Credit Suisse reiterated its ambition to reach net-zero financed ambitions by 2050 or sooner. The vision was announced in summer and is supported by a commitment to provide more than £250bn in financing geared towards green bonds and the low-carbon economy over the next decade.

Credit Suisse also announced plans to develop approved science-based targets in line with the Paris Agreement’s 1.5C pathway within 24 months. For targets to be deemed 1.5C-aligned by the SBTI, businesses whose indirect emissions for 40% or more of their annual emissions footprint must have plans to address two-thirds of total Scope 3 emissions.

The firm will establish a new Sustainability Advisory Committee, consisting of internal and external experts, to develop the targets. The Committee will also develop a strategy for making green investment solutions the norm for Credit Suisse’s individual and institutional clients. It will sit within the Board of Directors, to ensure top-level buy-in.

Nest

As for Nest, which is the UK’s largest pension schemes in terms of membership, the organisation will ensure that more than half of its overall portfolio is invested within “climate aware” limits from February 2021.

Nest announced in July that it will divest from large businesses which derive at least 15% of turnover from aggressive fossil fuel extraction practice like oil sands and arctic drilling, as part of its plan to align with the UK’s 2050 net-zero goal. Nest also set a 2025 deadline to remove thermal coal from its portfolio and immediately divested from BHP.

In order to meet its interim target, Nest will almost double its investment in renewable energy, energy efficiency and green buildings in emerging markets. Investments in these sectors will reach £930m in February 2021, up from £480m in February 2020. Nest will work with Northern Trust Asset Management to re-allocate investments from high-carbon to low-carbon assets.

“Over the next 10 to 20 years countries like China and India are expected to see huge increases in urbanisation,” Nest’s head of responsible investment Diandra Soobiah said, explaining its decision to prioritise investments in emerging markets.

“Many emerging economies are also thinking hard about how to harness green technology to fuel their growth and leapfrog the dirtier industrialisation trends of the past. This presents opportunities for investors.”

Nest represents more than a quarter of the UK’s workforce and manages a portfolio of more than £12bn.

Its latest climate announcements come shortly after Bloomberg NEF revealed that renewable energy investments in emerging markets were down more than 40% year-on-year in 2020. While all markets have taken some hit from Covid-19, developing nations are likely to bear the brunt of the fallout.

Sarah George