Renewable infrastructure: a new favourite for DC investors?
82% of respondents in our inaugural DC Investment Survey believe renewable infrastructure provides attractive opportunities
If you are one of NatWest Cushon’s 650,000 members, chances are you are less than 100 miles away from renewable energy infrastructure your pension is invested in. That is a claim the £3bn pension scheme stands by, on the back of its default sustainable investment strategy. There’s even a map for members to check where the nearest installation is.
The Cushon experience – a visible and widening appetite for renewable energy infrastructure – is now increasingly common across the UK’s defined contribution (DC) pension sector.
Our inaugural DC Investment Survey, in partnership with Schroders, shows growing investor confidence in renewable infrastructure. 82% of respondents said this asset class provides the most attractive opportunities for climate-driven investment.
Could renewable infrastructure be the new darling asset for DC schemes? Insights from the survey and the Net Zero Investor DC Forum convened last week, hold some clues.
UK infrastructure
Respondents to our survey collectively manage £198bn on behalf of 1.3m employers across the UK. The attractiveness of renewable infrastructure to these allocators is in part, linked a regulatory push into UK assets.
Crucially, our survey represents over 70% of master trusts who have backed the Mansion House Accord. Among other things, the pact targets an increase in DC investment within the UK.
When we asked respondents which asset class within the UK they would opt for, infrastructure topped the charts. 58% said this was where the best opportunities were. Additionally, 48% said this was particularly the case for growth phase strategies and 40% said they either increased or were considering increasing their allocation to UK infrastructure.
As a sub-theme of infrastructure investing, renewable energy is a likely recipient of this optimism.
Net Zero Investor’s Renewable Infrastructure Forum 2026: 18th, March, The Chesterfield Mayfair
Take for instance, Nest, a Mansion House signatory with £13bn invested within the UK. In 2023, Nest took three of its members on a trip to a windfarm off the coast of Grimsby – to show them their pension at work. Currently, Nest has some £1.3bn of members savings invested in renewable energy infrastructure. By 2030, that number is expected to reach £1.4bn.
Fit for purpose
Infrastructure interest aside, participants at the NZI DC Forum highlighted another driver of DC interest in renewables: long-term value.
NatWest Cushon’s proposition to members, for example, is that renewable energy infrastructure is an epitome of the kind of investment that is ‘fit for purpose’.
“We see industries that are stuck in the past, in the way they treat the environment, people and society, as being riskier”, the scheme says in its promotional material.
Commenting on climate-aware equity investing, NatWest Cushon’s head of investment strategy Rahil Ram said at the conference, “forward-looking metrics are likely to become important”.
Forward-looking metrics inherently lend themselves to renewable infrastructure allocations. If their use is indeed proliferating across the DC landscape, the attractiveness of renewable infrastructure seems a likely consequence.
In that context, the government’s proposed Value for Money (VfM) framework – a performance test of sorts – will be significant. Participants at the conference noted that while the VfM could incentivise long-term thinking, it could also in some ways curtail it. Hilkka Komulainen, global head of sustainability and impact at infrastructure manager Quinbrook warned of an incoming ‘value-blindness’.
On a panel that explored the effect of VfM on net zero investing (of which renewable infrastructure is a part), Komulainen said, “just focusing on short term fees and costs can exclude these kinds of assets”.
Asking whether allocations to renewable infrastructure are indeed fit for purpose, is now a pertinent query. The answer will likely depend on how schemes balance the friction between long-term value and short-term cost.
That there is a burgeoning DC interest in renewable infrastructure is hard to miss. Our survey puts a number on it. Yet this investor appetite, growing in spades, is likely to be conditioned. Most notably, by the fine print of regulatory change.
