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Our assets
Being a building society, we’re different to a bank. Our assets must be largely formed of residential mortgages, for us this also includes social housing and buy-to-let lending. We don’t do corporate lending except for small, closed commercial real estate and private finance initiative portfolios which are in run off and represent 0.3% of our balance sheet.
We don’t lend to or invest in the following industries:
- agriculture
- aluminium
- animal testing
- arms
- cement
- coal
- deforestation
- fashion
- iron and steel
- manufacturing
- mining
- oil and gas
- power generation
- tobacco
- transport
How we invest
We have a treasury investment portfolio held primarily for liquidity purposes, to cover potential member withdrawals and other outflows in line with UK regulation. This portfolio is made up of cash and low risk investments. As at 4 April 2023, treasury investments represented 21% of our total assets, including cash placed with the Bank of England (which itself represented 46% of our total treasury investments). We don’t invest in corporate bonds or equities.
In 2020, we committed to holding a minimum amount of environmental, social and governance (ESG) bonds within this treasury portfolio. Nationwide defines ESG bonds as those issued by multilateral development banks and certain green bonds.
From April 2020 to April 2023 we committed to treble our ESG holdings from £500 million to £1.5 billion. We met this target, as reported in our annual report and accounts, and will maintain a minimum holding of £1.5 billion for the financial year 2023/24.
Assets not directly managed by us
Not all investments are within our control. But where this is the case, we engage with stakeholders to find opportunities for better social and environmental outcomes.
Investing in social enterprise and innovation
We provide support for new companies, including social enterprises. This is to help them develop products and services to serve our members and society as a whole. Our support typically includes a financial investment and our expertise and relationships. We choose to strategically invest in this way so the products and services created align to our strategic drivers, including being a beacon for mutual good.
One of our notable partnerships is with Switchd who help members make their homes more sustainable. We’re also proud of our work with Fair By Design who focus on reducing the poverty premium.
Pension schemes
When they join, our employees are enrolled into the Nationwide Group Personal Pension plan (the Nationwide GPP) managed by Aviva.
The default investment option for employees involves equity funds that seek to invest in companies with better ESG scores and lower carbon intensity. We support responsible pension investments and whilst our colleagues can choose to have their pension contributions invested in a wide range of alternative funds, over 95% continue using the default investment option
We have a closed defined-benefit pension scheme at Nationwide. In accordance with UK legislation, the assets of the schemes are held in a trust, legally separate from Nationwide, and are administered by a board of trustees. The Trustees are required by law to act in the interests of all relevant beneficiaries and are responsible for the investment policy of fund assets, as well as the daily administration.
The Nationwide Pension Fund maintains a responsible investing policy in support of its Statement of Investment Principles, PDF (opens in a new window), which is reviewed annually.
Last updated: March 2024