The National Employment Savings Trust (NEST), publicly-owned scheme set up by the government is going tobacco-free across all its investments. The giant UK pension scheme with more than 8 million members said stricter worldwide regulation, increasingly aggressive legal action by governments against the tobacco industry and falling global smoking rates have all led it to conclude that tobacco is a poor investment for its members.
NEST will quit tobacco across its entire portfolio, both passive and active funds. It, however, estimates it will take up to two years for it to completely fortify. The £6bn scheme’s exposure to tobacco is currently put at around £40m and includes holdings in British American Tobacco (whose brands include Dunhill and Rothmans) and Philip Morris, the company behind Marlboro.
NEST was set up by the government to help employers meet their obligations under the "automatic enrolment" retirement saving initiative, which went live in 2012. It said it has not taken the decision lightly, "but we don't think it makes sense to continue investing in an industry whose business model looks increasingly unsustainable." It already has a tobacco-free policy on a couple of its funds.
It emerged in 2017 that NEST was shifting a chunk of its investments into a new climate change fund designed to move people's money out of fossil fuels and into renewable energy. It said it wanted to protect members from the risks associated with the climate emergency by reducing their exposure to companies with reserves of coal, oil, and gas.