Auto-enrolment pension scheme to invest £250m in renewables

The government’s automatic pension enrolment scheme for workers has appointed Octopus Renewables to arrange bespoke investment deals directly with the owners of renewable energy projects.

Nest, which currently manages more than £16 billion of pension savings for nearly a third of the UK workforce, expects to invest around £250 million under the partnership over the next year and potentially up to £1.4 billion by the end of the current decade.

Octopus Renewables will primarily target investments in renewable energy projects and associated infrastructure in the UK and the rest of Europe.

“We want to invest in the energy of the future, not the past,” said Nest chief investment office Mark Fawcett. “The money we manage on behalf of our members needs to provide steady returns for the next 10, 20, 30 years.

“Renewable energy projects are fantastic opportunities. Every new site provides greater energy security, increases potential returns and contributes to tackling the climate emergency. We want to deliver bigger pensions for our members, in a better world.

He continued: “Investing in British green energy means our members will be investing in projects they can see and touch, a tangible connection to their pension and a way out of the climate crisis. The strong foundations of this kind of investment should help them achieve great returns for their future while directly investing in the future of the planet.”

Alex Brierley, co-head of Octopus Renewables, said: “With predictable income, diversification and sustainable investment all at the forefront of institutional investors’ minds, renewable energy is an incredibly attractive asset class, for which demand is growing at pace.

“This partnership will create a strong platform for Nest, covering a diverse range of technologies, geographies and assets across their lifecycle, whether that be at development, construction or operational stages. The fund will also allocate capital to growth opportunities in the wider energy transition.”

The Nest scheme is run by a publicly owned corporation that is accountable to Parliament through the Department for Work and Pension but is generally independent of government in its day-to-day decisions.