The move by the scheme, which invests the retirement savings of 9 million workers, is one of the most ambitious to date and comes as regulatory pressure builds for the industry to better manage climate-related risk.

As well as the effects of climate change such as rising sea levels and more extreme weather, companies are at risk of costs associated with regulatory change and litigation linked to the transition to a low-carbon economy. “Just like coronavirus, climate change poses serious risks to both our savers and their investments.

It has the potential to cause catastrophic damage and completely disrupt our way of life,” said Mark Fawcett, Nest’s Chief Investment Officer. “No-one wants to save throughout their life to retire into a world devastated by climate change,” he added. Nest said it would immediately move 5.5 billion pounds in shares, or around 45% of its portfolio, to so-called ‘climate aware’ strategies, containing companies likely to prove winners in the energy transition.

The move would be the equivalent to taking 200,000 cars off the road or heating 50,000 households for a year through Nest also said there were some business activities it did not believe could ever be aligned with the goals of the Paris climate Agreement, which aims to limit the rise in global temperaturas.

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