Our approach and credentials
At LGIM, we believe environmental, social and governance (ESG) factors – such as climate change, social inequality and executive pay – are financially material. So we see responsible investing as the incorporation of ESG considerations into investment decisions.
Responsible investing, in our view, is essential to mitigate risks, unearth investment opportunities and strengthen long-term returns for clients. It is also core to our approach: our very purpose at LGIM is to create a better future through responsible investing.
The energy transition dilemma
A common goal of limiting global warming to well-below 2°C – and ideally 1.5°C by the end of the century as set out in the Paris Agreement – does not mean there is a common or accepted path for how to get there.
Reaching net zero: LGIM’s approach
Fighting climate change requires global greenhouse gas emissions to reach net zero. As an asset manager, we are committed to playing our part in this critical mission.
ESG at LGIM
Our purpose is to create a better future through responsible investing. What does this mean in practice?
Our credentials as a responsible investor
We take a consistent approach, across our entire book, to voting and engagement
Innovation in tackling climate change, from modelling the energy transition to targeted engagements
A wide range of responsible investment strategies, across different asset classes
Investment Stewardship
Our Investment Stewardship team engages with companies, alongside LGIM’s investment teams, to address company-specific and market-wide risks and opportunities. The team exercises our voting rights globally, holding companies to account. At the same time, the team works with regulators, policy makers and our peers to tackle systemic issues.
Source: LGIM as at 31 December 2021
What is active ownership?
Active ownership in uncertain times
Over the course of 2021, the pandemic continued to highlight critical environmental, social and governance (ESG) challenges. But other issues were also at the forefront of our thinking, not least the danger of a climate catastrophe and the risks posed by geopolitical crises.
Our Active Ownership report details how our Investment Stewardship and Investment teams exercised voting rights across our entire book and engaged with companies, policymakers and other stakeholders to deliver positive change on topics including net-zero emissions, ethnic diversity and gender diversity.
With 22 professionals, and an average of 11 years’ experience, our Investment Stewardship team has a track record of high-profile, effective and global engagement with companies in different sectors around the world.
⁽¹⁾ Across all assets under management.
⁽²⁾ LGIM, as at 31 December 2021. AUM in responsible investment strategies represents only the AUM from funds or client mandates that feature a deliberate and positive expression of ESG criteria, in the fund documentation for pooled fund structures or in a client’s Investment Management Agreement.
Key risks
The value of an investment and any income taken from it is not guaranteed and can go down as well as up, you may not get back the amount you originally invested.
Past performance is not a guide to the future.