Nest has called on oil company Shell to set greenhouse gas intensity targets aligned with the Paris climate goals.
The workplace pension scheme, which has almost £7m invested in Shell on behalf of UK workers, wants the company to commit to the demands filed by Dutch investor group Follow This and the UK responsible investment charity ShareAction.
Nest, which invests the pensions of more than six million workers, itself established a bespoke investment fund to manage the risks of climate change within its members’ portfolios last year.
The scheme’s chief investment officer, Mark Fawcett said: "We commend Shell’s ambition to reduce its carbon footprint but believe it can and should go further in the interests of all shareholders.
"Climate change is driving one of the biggest economic trends of our generation and the oil and gas industry are particularly vulnerable to change.
"We think that concrete targets, against which executive incentives can be set, are a sensible way to measure progress and enable investors to assess ongoing risks."
Mr Fawcett said he hoped investors would join together to put pressure on the wider oil and gas industry to set long-term and intermediate targets in line with the internationally agreed Paris goals.
As part of the Paris Agreement, countries which are part of the deal must draw up plans to mitigate climate change to keep the global temperature below two degrees Celsius.
Nest established a climate aware fund aiming to align its members’ investments with the 2015 Paris agreement last year in partnership with fund manager UBS.
The fund underweights companies in the highest emitting sectors that are not making the necessary changes to meet the Paris commitments and overweights companies that are showing leadership or working on solutions such as renewable energy and green technologies.
It also has a voting and engagement strategy to encourage companies that are not making sufficient progress to do more to future-proof their business models.
Nest said it would also vote against Shell's pay report for the second year running because the company's bosses were not incentivised to reduce greenhouse gas emissions.
It voted against management in 2017 for failing to link executive pay to targets to move towards a low carbon economy.
Nest said: "Shell announced ‘ambitions’ to reduce greenhouse gas emissions following shareholder pressure last year, but executives’ incentives still do not support the company’s public commitments.
"In spite of this, the company is proposing to pay its chief executive Ben van Beurden €9m (£7.8m), in a year when there are also investor concerns about safety issues in its supply chain."