UBS Asset Management have removed holdings in five energy companies: Exxon Mobil, Imperial Oil, Kepco, Marathon Oil and Power Assets due to their lack of progress in transitioning to a low carbon future.

UBS has applied these exclusions across its suite of Climate Aware funds, including the one it manages for the pensions scheme Nest, and its actively managed equity and fixed income sustainability funds.

Nest’s share ownership in these five companies represented £40m as of June end 2021. The five companies will not return to Nest’s main portfolio until they demonstrate clear progress in preparing for the low carbon economy, in order to deliver good investment value for its savers.

To reinforce its commitment to net-zero by 2050 (or sooner), Nest is introducing a new carbon reduction target to help maintain momentum and progress – a commitment to reduce carbon emissions by 30 per cent in public equities and fixed income by 2025. The reduction is baselined against Nest’s 2019 portfolio.

UBS’s decision follows a three-year engagement programme it led as part of its Climate Aware framework, with 49 oil and gas companies identified as lagging on climate change performance. 60 per cent of companies made good or excellent progress during this time in transitioning their business towards a lower carbon economy.

UBS has also extended its climate engagement programme, underpinned by the same Climate Aware Framework, to cover other sectors where climate change risks and opportunities are material. This includes 46 companies in the following industries: automobiles, chemicals, construction and materials, electricity, industrials, utilities, metals and mining, and oil and gas producers.

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