Debating whether environmental, social and governance (ESG) investment strategies have a future, in a session at the Pensions UK Investment Conference in Edinburgh yesterday (11 March), Lucas said that investing in opportunities that build a resilient future is looking after member interests.

“Environmental policy and pension policy are still seen too much as separate domains, and that separation is no longer intellectually or practically sustainable,” said Lucas.

“As things stand right now, that pension fund money could be essentially sawing off the branch upon which they hope to sit later on because it is precisely driving the environmental and climate crisis.”

Lucas’ opponent in the debate was Michael Gove, former Secretary of State for Levelling Up, Housing and Communities. He argued that pension funds should focus on their fiduciary duty rather than focusing on ESG policies.

“It is the government’s direct responsibility to deal with climate change, through taxation or subsidy,” he said. “Your responsibility is to ensure that those individuals, many of whom will be relatively low earners, have the security of knowing that you are seeking the very best possible return for them at every point.

“Whenever government seeks to direct, mandate, nudge or otherwise control how you invest, they are taking you away from your principal duty, which is to look after your members’ investments.”

Michael Gove

“Whenever government seeks to direct, mandate, nudge or otherwise control how you invest, they are taking you away from your principal duty, which is to look after your members’ investments.”