Our Environmental, Social and Governance (ESG) Investment Approach

Nationwide’s treasury investment portfolio is held primarily for liquidity purposes and consists of high-quality liquid assets and assets eligible for central bank operations.

Nationwide’s credit policy and prudential regulation limits our investments to high-credit quality bonds issued by governments, supranational and government-related entities, as well as covered bonds and senior asset-backed securities.

Our view is that these restrictions result in reduced exposure to significant sustainability risks because:

• The government bonds we hold are all issued by Organisation for Economic Co-operation and Development (OECD) member states. The OECD supports the United Nations (UN) in ensuring the success of the 2030 Agenda for Sustainable Development.

• The covered bonds we hold are issued by banks and financial institutions, and consumer finance backed securities. Therefore, we don’t lend directly to high-emitting sectors such as the fossil fuel industry.

Nationwide supports sustainable finance through its target to hold at least £2 billion of ESG Assets. We define ESG Assets as bonds issued by multilateral development banks or green, social or sustainable labelled bonds. Multilateral development banks provide financial support for economic and social progress in developing countries, and thereby help to advance the UN Sustainable Development Goals (SDGs).

We report on our performance against this target in our Annual Report & Accounts (opens in a new window).