Nesta divests £120m from Northern Trust over climate alliance exits

Nesta Trust, a UK-based endowment, has divested £120m from Northern Trust Asset Management over climate misalignment concerns. The global passive equity mandate has been transferred to French asset manager Amundi.

Nesta Trust, a £420m endowment, funds a research and innovation foundation. The equity mandate represents over a quarter of its assets.

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In a statement, Nesta said the decision to divest was a ‘direct consequence’ of Northern Trust’s decision to exit the Net Zero Asset Manager’s Initiative (NZAM) and Climate Action 100+.

In January 2025, NZAM had suspended activities following high profile departures – including BlackRock, Vanguard and Northern Trust.

“The economic risks of the climate crisis mean it is the duty of any asset manager to ensure their investments support climate action to protect the portfolio’s growth”, commented Nesta Trust CIO Jenny Segal.

From Nesta’s perspective, asset manager commitments to alliances such as NZAM are viewed as a signal of alignment on the climate front. The decision to divest followed Northern Trust’s formal withdrawal from the alliances despite Nesta communicating concerns, according to sources familiar with the matter.

“Asset managers that step back from climate action initiatives risk compromising their stewardship and so we took the decision that Amundi was a better home for Nesta’s global equity investments”, Segal says.

Mandate transfer

When NZAM relaunched in February this year, its signatory base had a geographical tilt towards Europe, UK and Australasia. Amundi joined NZAM in 2021 and was amongst the managers who backed its relaunch, citing commercial benefits of strong climate credentials.

Commenting on the Nesta mandate, Amundi UK chief executive Eric Bramoullé said, “clients are increasingly seeking to ensure that their assets are invested in a way that reflects their responsible investment commitments and supports the transition to a more sustainable economic system”.

Bramoullé notes that stewardship, engagement and voting are central to Amundi’s approach. According to Nesta’s statement, its investment committee places an emphasis on active stewardship of its public equity investments.

Nesta’s divestment on climate misalignment grounds has precedent in the UK. The People’s Pension scaled back its investments from State Street in February 2025, citing stewardship misalignment. State Street had announced a departure from CA100+ in early 2024, something trustees at the People’s Pension had taken note of.

The master trust then appointed Amundi to manage a £20bn passive equity portfolio.

“We hope that our disinvestment shows that asset owners do not have to silently accept a roll-back of climate commitments and that this shows others they can hold their fund managers to a high standard”, says Nesta Trust’s Segal. The endowment investor is hoping to not only follow precedent but also set one itself.