Caroline Lucas, former head of the Green Party, and Michael Gove, a Conservative and former Environment Secretary, clashed over the greater responsibility for pensions to make environmentally conscious decisions versus the fiduciary duty of trustees.
The one on one debate was being held on the second day of Pensions UK’s investment conference in Edinburgh.
Gove said: “If pension schemes think it is right that that money should be invested in that area (net zero), defend that decision to your members and make it clear why you believe that is so.
Be explicit about the trade offs, because fundamentally, those who manage pension funds should be accountable to the owners of that money, and the owners of that money are the members of the fund, and unless they vote differently, your responsibility is to maximize their returns.”
Further to this, Gove insisted that it was the responsibility of trustees to both identify investment risk such as that which could be caused by climate change, but also to appreciate if the risks have been priced appropriately in the market.
Lucas instead focused on the notion of climate change as an existential threat, pointing to a recent joint report by MI5 and MI6 which went so far as to claim that biodiversity collapse caused by climate change would represent a threat to national security.
“We should be using all of the resources at our fingertips in order to be able to ensure that we have a safe transition, precisely for those members of pension funds who want a liveable planet upon which to enjoy their pensions,” she says.
Lucas has been leader of the Green Party as recently as 2018, and until 2024 was the party’s only MP in Parliament.
In the debate she also zoned in on previous comments made by Gove that “net zero and economic growth go hand in hand”, claiming that “there are different Michael Goves” as his position on stage appeared markedly different from his previous stance.
Gove says: “It is a pension fund’s ultimate responsibility to follow fiduciary duty in order to ensure that members secure the best and most secure returns for their retirement. It is government’s direct responsibility to deal with climate change through taxation or subsidy.”
While the Conservative government of which Gove was a Cabinet minister stuck to the UK’s net zero by 2050 commitment, current leader Kemi Badenoch has promised to scrap it if the party returns to power.
