Legal & General is Britain’s largest asset manager, with over £1 trillion on its books. Every pound it manages should be dedicated to achieving the highest possible returns. This matters a lot: L&G manages over five million pensions in the UK.

But in recent years, the asset manager has been particularly concerned with fashionable causes, instead of being entirely focused on making sure your retirement is secure.

That is why I recently attended their AGM. I wanted to learn why the board is wedded to net zero, despite their fiduciary duty to clients, and whether they would consider reprioritising saver returns instead.

At the Q&A I highlighted that US competitors have dropped their net zero ambitions. Most have pulled out of the ‘Net Zero Asset Managers Initiative’ – a consortium of asset managers committed to achieving net zero within their investment portfolios by 2050 or sooner.

L&G – along with most other British pension fund managers – is still committed to this. But their promise to decarbonise their portfolios and to advocate for ‘a supportive policy environment that aligns with the goal of achieving global net zero’ are premised on a net zero consensus that no longer exists.

At the moment, roughly half of the public support either Reform or the Conservatives. Both parties oppose net zero by 2050. It is therefore reasonable to assume, as I told the board, that many with L&G pensions, do not want their retirement outcomes subordinated to the green agenda.

In response, the board told me that its clients want to align with net zero by 2050. Whilst the board acknowledged that complex trade-offs exist, they did not explain what these were. Instead they doubled down, reaffirming their net zero commitment, before asserting that decarbonisation offers stellar investment opportunities.

The problem is that these opportunities rely on government subsidy.  Let’s set aside the moral argument regarding investments in rent seeking schemes reliant on a taxpaying base. The reality is that green investments are hugely exposed to policy changes, and so  don’t reflect sound financial management.

This was evident in the USA last week as Trump’s tax bill slashed renewable subsidies. The consequence was the immediate crash of renewable energy shares. Enphase Energy, a NASDAQ renewable energy posterchild, had over $1 billion, or 20 per cent, instantly wiped from its valuation.

Compare this to the hydrocarbon industry. Far from receiving subsidies, oil companies in Britain been subject to a windfall tax since 2022. They currently pay a 78 per cent tax. Despite this, they have fared well. Shell for example has outperformed the market, delivering returns of 30 per cent since 2022.

The market mechanism should reward these companies for their success. Instead, the focus by investors on Environmental, Social, and Governance (ESG)  either excludes them entirely, or pressures them into decarbonising. L&G has used savers’ money to vote against both BP and Shell for failing to be sufficiently green.

L&Gs recent Climate Pledge laments that, ‘The pace of transition is neither fast enough nor smooth enough,’ and that ‘inaction is not an option.’

But inaction is and should be an option for the firms managing your pension. Hayek was right: business managers do not manage for their own sake, but on behalf of ‘those who have entrusted [them] with their resources.’ In this case, pension savers.

At the moment, individual pension savers already fund net zero schemes via their taxes. They should not be forced to pay an effective additional tax, via lower returns on their assets, to fund net zero with their retirement savings.

It is for government to pursue manifesto commitments, and for private companies to pursue profit.

Following the L&G AGM, there was a light lunch, during which several individual investors thanked me for raising this issue.

Multiple members of the board also approached me. They asked why I had asked my question and what I would have them do. Again, I urged them to stop blackmailing private companies into decarbonising. I said their net zero goals are out of step with public opinion and that they are violating their fiduciary duty. Some back and forth ensued. The conversation was civil, but the disagreement was clear. They appear to have accepted the orthodox thinking around climate change, that catastrophe looms and all else is secondary.

The irony is, that many of the green investments being made are only possible due to the dirtiest forms of energy. Asset managers praise and invest in China’s booming electric car industry. They rarely acknowledge that it is only booming due to China’s reliance on coal, which results in lower energy prices.

The public increasingly rejects climate alarmism, yet the managerial class embraces it. They are convinced they are saving the world, and the ends will always justify the means. The means, in this case, is imperilling the retirement of millions.

Since attending the AGM, many have told me that they will be selling their L&G shares. They shouldn’t. Instead, they should exercise their rights as owners of the company to demand change. As should anyone else who has a pension with a company obsessed with net zero.