Fund Name SRI Style Product Region Asset Type Launch Date
L&G Future World Global Equity Focus Fund Sustainability Tilt SICAV/Offshore* Global Equity 13/07/18

Objectives

Fund Size: £69.15m

Total screened & themed / SRI assets: £332200.00m

Total Responsible Ownership assets: £1195690.00m

Total assets under management: £1195690.00m

As at: 31/12/22

ISIN: LU1824428798, LU1824427717, LU1824427808, LU1824428103, LU1824428285, LU2263664828, LU1824427980, LU1824428012


Contact: fundsales@lgim.com

Sustainable, Responsible &/or ESG Overview

The L&G Future World Global Equity Focus Fund is an actively managed, concentrated global equity fund for investors seeking capital appreciation through stock selection. The Fund adopts a high conviction approach, investing in 30-40 sustainable growth companies within resilient industries that have high operational returns at attractive valuations. It offers investors a low carbon portfolio with exposure to companies benefiting from long-term secular and  structural change. We focus on best-in-class companies and ESG improvement stories, which are not recognized by the broader market. These companies offer products, services and solutions that are aligned to achieving a more sustainable and lower-carbon world. We choose to focus on businesses benefiting from structural growth, market dynamics and positive change.


By integrating long term themes, ESG factors and fundamental bottom-up analysis, the manager looks to deliver sustainable long-term returns as well as positive outcomes through focused active engagement with the companies we invest in.

 

Primary fund last amended: 25/01/24 11:33

Information received directly from Fund Manager

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  • Fund Filters

    Sustainability

    Environmental policy

    Limits exposure to carbon intensive industries

    Sustainability theme or focus

    Environmental damage and pollution policy

    Favours cleaner, greener companies

    Sustainability focus

    Encourage more sustainable practices through stewardship

    Climate Change & Energy

    Nuclear exclusion policy

    Coal, oil & / or gas majors excluded

    Climate change / greenhouse gas emissions policy

    Invests in clean energy / renewables

    Fracking and tar sands excluded

    Energy efficiency theme

    Paris aligned fund strategy

    Encourage transition to low carbon through stewardship activity

    Human Rights

    Human rights policy

    Responsible supply chain policy or theme

    Social / Employment

    Social policy

    Health & wellbeing policies or theme

    Favours companies with strong social policies

    Ethical Values Led Exclusions

    Armaments manufacturers avoided

    Governance & Management

    Governance policy

    UN sanctions exclusion

    Encourage higher ESG standards through stewardship activity

    Fund Governance

    ESG integration strategy

    Asset Size & Metrics

    Over 50% large cap companies

    Invests in small, mid and large cap companies

    How The Fund Works

    Balances company 'pros and cons' / best in sector

    Limited / few ethical exclusions*

    Negative selection bias

    Significant harm exclusion

    SRI / ESG / Ethical policies explained on website

    Impact Methodologies

    Aims to generate positive impacts (or 'outcomes')

    Measures positive impacts

    Positive environmental impact theme

    Positive social impact theme

    Invests in environmental solutions companies

    Invests in social solutions companies

    Invests in sustainability / ESG disruptors

    Labels & Accreditations

    SFDR Article 9 fund / product (EU)

    Intended Clients & Product Options

    Available via an ISA (OEIC only)

    Fund management company information

    About The Business

    ESG / SRI engagement (AFM company wide)

    Responsible ownership / stewardship policy (AFM company wide)

    Responsible ownership policy for non SRI funds (AFM company wide)

    Responsible ownership / ESG a key differentiator (AFM company wide)

    Diversity, equality & inclusion engagement policy (AFM company wide)

    Vote all* shares at AGMs / EGMs (AFM company wide)

    Sustainable property strategy (AFM company wide)

    Integrates ESG factors into all / most fund research

    SDG aligned aims / objectives (AFM company wide)

    In-house diversity improvement programme (AFM company wide)

    Just Transition policy on website (AFM company wide)

    Invests in newly listed companies (AFM company wide)

    Invests in new sustainability linked bond issuances (AFM company wide)

    Resources

    In-house responsible ownership / voting expertise

    Employ specialist ESG / SRI / sustainability researchers

    Use specialist ESG / SRI / sustainability research companies

    ESG specialists on all investment desks (AFM company wide)

    Collaborations & Affiliations

    PRI signatory

    Climate Action 100+ or IIGCC member

    UN Net Zero Asset Owners / Managers Alliance member

    GFANZ member (AFM company wide)

    TNFD forum member (AFM company wide)

    Investment Association (IA) member

    Accreditations

    PRI A+ rated (AFM company wide)

    Engagement Approach

    Regularly lead collaborative ESG initiatives (AFM company wide)

    Encourage responsible corporate taxation (AFM company wide)

    Engaging on climate change issues

    Engaging with fossil fuel companies on climate change

    Engaging to reduce plastics pollution / waste

    Engaging to encourage responsible mining practices

    Engaging on biodiversity / nature issues

    Engaging to encourage a Just Transition

    Engaging on human rights issues

    Engaging on labour / employment issues

    Engaging on diversity, equality and / or inclusion issues

    Engaging on governance issues

    Engaging on responsible supply chain issues

    Company Wide Exclusions

    Review(ing)carbon / fossil fuel exposure for all funds (AFM company wide)

    Coal exclusion policy (group wide coal mining exclusion policy)

    Coal divestment policy (AFM company wide)

    Controversial weapons avoidance policy (AFM company wide)

    Fossil fuel exclusion policy (AFM company wide)

    Climate & Net Zero Transition

    Encourage carbon / greenhouse gas reduction (AFM company wide)

    Net Zero commitment (AFM company wide)

    Working towards a ‘Net Zero’ commitment (AFM company wide)

    Carbon transition plan published (AFM company wide)

    ‘Forward Looking Climate Metrics’ published / ITR (AFM company wide)

    Carbon offsetting – do NOT offset carbon as part of net zero plan (AFM company wide)

    In-house carbon / GHG reduction policy (AFM company wide)

    Publish 'CEO owned' Climate Risk policy (AFM company wide)

    Net Zero - have set a Net Zero target date (AFM company wide)

    Voting policy includes net zero targets (AFM company wide)

    Committed to SBTi / Science Based Targets Initiative

    Transparency

    Publish full voting record (AFM company wide)

    Publish responsible ownership / stewardship report (AFM company wide)

    Full SRI policy information on company website

    Full SRI policy information available on request

    Paris Alignment plan publicly available (AFM company wide)

    Net Zero transition plan publicly available (AFM company wide)

    Sustainability transition plan publicly available (AFM company wide)

  • Sustainable, Responsible &/or ESG Policy:

    In line with other Future World funds, the Future World Global Equity Focus Fund will not hold ‘pure’ coal miners, manufacturers of controversial weapons and perennial offenders of the UN Global Compact (UNGC).

    We do not invest in carbon-intensive sectors, nor any companies that significantly harm any environmental or social objectives.

    We do not invest in carbon-intensive sectors, nor any companies that significantly harm any environmental or social objectives.

    The Fund pursues its sustainable investment objective by using thematic analysis to invest in companies that the Investment Manager believes will make a positive impact on the environment and society over the long-term. The Fund uses the UN SDGs as a forward looking indicator at the sector level to identify opportunities in companies that are growing in a sustainable manner. Each company is assessed using the Investment Manager’s proprietary tool called ESG Active View, as well as third party tools. ESG Active View brings together granular quantitative and qualitative inputs in order to reflect a full picture of the ESG risks and opportunities embedded within a company. Companies that are not deemed to be sustainable investments are excluded. All investments held by the Fund contribute to one or more of the UN Sustainable Development Goals (SDGs).

    We also use revenue thresholds as part of our exclusion procedure. We exclude companies that exceed a 0% revenue threshold for revenues from alcohol, gambling, tobacco, biological weapons, and chemical weapons from our eligible investment universe. We determine the revenue exposure through fundamental analysis of the company and  the use of proprietary (LGIM Active view) and 3rd party tools (Bloomberg, MSCI ESG assessment, Sustainalytics assessments, etc.).

    We also apply thresholds to filter out low ESG scoring companies from our investment universe - namely, we do not include any company with MSCI ESG rating below BB, nor any company with LGIM Active Score of less than 35, in our investable universe. Thus, all companies within the portfolio rate average or above average in terms of their ESG profile compared to sector peers.
    We include securities with ESG profiles in-line with peers only when we believe there is potential (in terms of intent and capability) for them to eventually outperform peers (from an ESG profile perspective). Consequently, the companies we invest in falls into one of two buckets: ESG Successes or ESG Improvement. ESG Success includes high scoring companies (MSCI ESG rating of AA and above), with best in-class ESG metrics, and we engage with these companies to ensure their future trajectory trends towards remaining best-in-class.

    ESG Improvement are currently medium scoring companies (MSCI ESG rating between A to BB ) where we believe they will improve to become above sector average (i.e. MSCI ESG rating of AA and above) in their ESG performance within our investment time horizon (3-5 years). We engage with these companies to push for improvements and to understand their roadmap towards a better ESG profile.

    When considering the optimal weights for each investment in our portfolio, we aim for a balance of "ESG success" securities and "ESG improvement" securities to capture both the alpha from outperforming ESG stocks, and the alpha from the change in ESG profile for stocks with room for improvement.

    For "ESG success" stocks, we consider the consistency of performance, and the likelihood of outperformance into the future, based on their current ESG strategy, risk frameworks and company culture.

    For "ESG improvement" stocks, we consider our level of conviction in the potential for and the speed of change for the ESG issues we deem to be most material for the security. For both buckets of stocks, when determining the ESG profile of the company, we also take into consideration the products offered by the company and whether the products can help other companies address ESG challenges and UN SDGS, in conjunction with the ESG profile of the business practices of the companies.

    Given our fund is constructed to consist of 1/ best-in-class "ESG success" securities whom we believe can maintain an above -sector-average ESG profile into the future, and 2/ "ESG improvement" that currently have a ESG profile in line with sector peers, but has a credible roadmap towards becoming an above-sector-average ESG performer, we believe we will be able to consistently beat the benchmark in terms of ESG performance.

    Crucially, we monitor the progress and strategies of peer companies, to ensure our securities are evolving at a pace that can ensure sector outperformance. We also balance portfolio weights to ensure we will be able to deliver an overall ESG performance that exceeds that of the benchmark. The monitoring of Active View scores, MSCI ESG ratings and Sustainalytics ratings of our companies, their peers, and our benchmark is also a key part of our process.

    In the case of unwelcome developments of ESG aspects in our investment, these will be considered with respect to their impact on the overall risk/return profile of the company. This may lead to a review of the position in the portfolio.

    All Future World funds partake in LGIM’s Climate Impact Pledge detailed below;

    LGIM’s Climate Impact Pledge: “To engage with the world’s largest companies that are required to adapt their business models and drive innovation in order to meet the global climate change goals. LGIM commits to encourage and accelerate the transition to a low-carbon economy for the long-term benefit of all companies and their investors.”
    How it works: Through our research, we identify the largest companies that are critical to the shift to a low-carbon economy and rank them against criteria such as commitment to the low-carbon transition, board composition, strategy and transparency. We then engage with them to improve their ranking and help them strive to be the best in their sectors. LGIM has identified over 1000 companies with which we engage on the Climate Impact Pledge, but the number of companies – and the choice of sectors – may change over time, with input from the Fund’s advisory board. Companies that consistently fail to meet our minimum expectations will eventually be excluded from the fund, subject to a tracking error tolerance. Moreover, in all other LGIM funds that remain invested in those companies that have not met our criteria, we will vote against the chairman until we see satisfactory change. This approach is a powerful tool to drive better company behaviour and raise standards across the market.

    All of LGIM’s funds incorporate our Investment Stewardship team’s approach to engaging with companies. The team ensures that the companies in which you’re invested are run with stakeholder interests in mind.

  • Process

    We are looking to capture mispriced growth opportunities by integrating long term themes, ESG and fundamental, bottom-up analysis. The integration of the following factors into our investment process provides a number of differentiators and competitive advantages:


    Long term thematic research provides exposure to sustainable investment themes, and a portfolio of companies that are positioned for the structural changes impacting their businesses. We conduct comprehensive analysis of industry, market structure, value chain, competitors and suppliers for each company. This enables us to understand the business model and assess the long-term growth opportunity. For each investment idea we build a deep-dive model with a target price at the outset. As part of our strict valuation discipline, this is constantly reviewed to ensure the portfolio stays up-to-date with our strongest conviction ideas.


    Detailed fundamental company research should be expected of all equity fund managers, but in our view the comprehensive integration of ESG into the research process is a differentiator, allowing the investment team to assess the material risks and opportunities of what the company does and how it does it, set against the long term trends of the industry.


    Extensive company engagement is another differentiator, aided by the unrivalled corporate access as the UKs largest asset manager. We adopt a proactive approach, focusing on where a company is heading, not where it has been. Combining proprietary ESG views and scores, we then look to engage with companies at multiple levels, from the Chairman and Non Executives, through to the CEO, CFO and company management. We engage to drive improvements to companies’ ESG trajectories. These engagements are conducted by the personnel across Equities, Fixed Income and Investment Stewardship. We collaborate extensively internally, and have a longstanding history of commitment to being stewards of the capital that we manage.


    When considering the optimal weights for each investment in our portfolio, we aim for a balance of "ESG success" securities and "ESG improvement" securities to capture both the alpha from outperforming ESG stocks, and the alpha from the change in ESG profile for stocks with room for improvement.


    For "ESG success" stocks, we consider the consistency of performance, and the likelihood of outperformance into the future, based on their current ESG strategy, risk frameworks and company culture.


    For "ESG improvement" stocks, we consider our level of conviction in the potential for and the speed of change for the ESG issues we deem to be most material for the security. For both buckets of stocks, when determining the ESG profile of the company, we also take into consideration the products offered by the company and whether the products can help other companies address ESG challenges and UN SDGS, in conjunction with the ESG profile of the business practices of the companies.


    Given our fund is constructed to consist of 1/ best-in-class "ESG success" securities whom we believe can maintain an above -sector-average ESG profile into the future, and 2/ "ESG improvement" that currently have a ESG profile in line with sector peers, but has a credible roadmap towards becoming an above-sector-average ESG performer, we believe we will be able to consistently beat the benchmark in terms of ESG performance.


    Crucially, we monitor the progress and strategies of peer companies, to ensure our securities are evolving at a pace that can ensure sector outperformance. We also balance portfolio weights to ensure we will be able to deliver an overall ESG performance that exceeds that of the benchmark. The monitoring of Active View scores, MSCI ESG ratings and Sustainalytics ratings of our companies, their peers, and our benchmark is also a key part of our process.
    In the case of unwelcome developments of ESG aspects in our investment, these will be considered with respect to their impact on the overall risk/return profile of the company. This may lead to a review of the position in the portfolio.


    Once we have a list of potential investment ideas, we then rank them by the best risk/reward potential to come up with 30~40 best names globally. Positions are adjusted up/down according to risk, diversification, % upside and liquidity. The fund is benchmark and sector agnostic, with a high conviction approach. Further, by adopting a global approach, this enables us to manage a diversified fund and offer diversification to investors.

    Our sell discipline is a key element of our portfolio construction, with sell decisions triggered by:

    • Investment working as per plan: Divest when there is 0% upside on the weighted average scenario or <20% on the hypothesis scenario
    • Investment not working as per plan: Increased risk of the stock pricing per its downside scenario, based on new events/news, deteriorating ESG or other fundamental change.
    • Better investment opportunity: A security with a better risk/reward presents itself.
    • Dealing with underperformance: Relative underperformance should be driven by stock selection versus an unintended skew to a currency or sector.


    The investment team are supported in their research by a proprietary ESG tool that we have developed called the LGIM Active ESG View. This pools ESG data from a number of providers and provides a holistic view of a company. This means the starting point for further fundamental analysis is consistent. The tool draws on a wide range of indicators, across multiple service providers and it involves our internal teams leveraging their sector expertise, in-depth knowledge of company dynamics and the corporate access we enjoy due to our scale.


    The tool incorporates granular quantitative and qualitative inputs to reflect a full picture of the ESG risks and opportunities embedded within each company. This tool covers 4,500 companies across circa 65 sectors and sub sectors, individually weighted to capture material ESG factors. It is important that as a group we collectively leverage the expertise from across the investment teams and Corporate Governance in order to assess a company’s ESG risks, but also to enable us to identify investment opportunities drawing upon data but also taking a dynamic and forward looking view based on company meetings that we have had.


    At a company and fund level, we also have an ESG rating, business involvement screening look through and portfolio overview across MSCI Fund Sustainability, Morningstar and Sustainalytics. Internal research is supplemented by qualitative research from academic and NGO research as well as sell-side broker reports. We have looked to adopt the SASB materiality mapping in conjunction with the SDG framework. We believe the two co-align as part of our assessment of individual company investment risk and potential opportunity for positive change.


    In addition, we are members of multiple industry-wide associations and networks which promote and encourage strong ESG practices and responsible investing standards. Our involvement with these organisations highlights how we promote collaborative engagement.

  • Resources, Affiliations & Corporate Strategies

    As of May 2023, there are a total of 88 LGIM employees with roles dedicated to ESG, some of which are outlined in more detail below.

     

    Investment Stewardship team

    • As Head of Investment Stewardship and Responsible Investment Integration, Michael Marks’ role spans all functions within LGIM from investment stewardship, distribution and investment teams to operational functions such as data and technology; embedding ESG across the firm in all areas and ensuring that focus is maintained on delivering the capabilities required by all stakeholders.
    • The team is responsible for developing and carrying out LGIM’s investment stewardship and active ownership activities. The team comprises subject matter experts in all facets of ESG and is organised in a matrix of thematic and sector coverage.
    • There are 251 people in our global Investment Stewardship team, led by Michael Marks. The team includes those located in the US and Japan, led by John Hoeppner and Trista Chen respectively.
    • Trista joined LGIM in February 2023 as the Head of Investment Stewardship Asia (ex Japan) based in Singapore. This role is a key step in expanding LGIM’s presence in Asia, both strengthening and intensifying LGIM’s Investment Stewardship activities in the region as well as being a spokesperson for LGIM on ESG matters; thereby supporting and enhancing the awareness of LGIM’s brand.
    • Alexander Burr, ESG Policy Lead, continues to lead and progress LGIM’s ESG policy engagement globally.

     

    Responsible Investing Strategy team

    • Amelia Tan joined LGIM at the start of 2022 as the Head of Responsible Investing Strategy for Investments. This role ensures that LGIM stays at the cutting edge of innovation within responsible investing and creates a coordinated approach across public asset classes, which is embedded throughout our funds and portfolios.
    • The Responsible Investing Strategy team, comprised of three colleagues, works with investment teams to integrate responsible investing insights into investment process across asset classes and investment styles. Additionally, the team also looks to innovate on responsible investing products and solutions, with the focus on positioning and ensuring that we are market-leading, credible and consistent.

     

    Climate Solutions team

    • Nick Stansbury, Head of Climate Solutions, leads our energy transition approach and is one of our most prominent spokespeople on this topic.
    • The Climate Solutions team, which has a total of five team members, have created a bespoke, detailed and investor-focused model to facilitate construction of fully independent energy scenarios. The framework uses in excess of 10 million data variables to model the energy system. The model, LGIM’s Destination@Risk, is now helping to inform our long-term investment decisions and develop dynamic pathways for the energy system.

     

    Distribution

    • Laura Brown, Head of Client and Sustainability Solutions, has overall responsibility for Client and Sustainability Solutions at LGIM bringing together our investment capabilities to design solutions to meet investment and sustainability objectives for a wide range of clients. Laura works closely with two further colleagues who are dedicated to ESG and supporting clients’ in meeting their sustainability and responsible investing objectives.

     

    Real Assets

    • LGIM’s Real Assets team has a team of seven dedicated ESG experts working across the range of private credit and real estate strategies that we manage. This team is led Shuen Chan.

     

    Product Development and Strategy

    • Rachel Ahlquist is focused on developing and shaping the strategic direction of the pooled product range with respect to Responsible Investment features. This includes specific focus on product launch or amendment work with more advanced ESG features.

     

    ESG Programme

    The LGIM ESG Programme has been running since 2020 and is aligned to LGIM purpose to create a better future through responsible investing. The ESG Programme has been deemed firm critical and necessary to transform the firm capabilities to meet client, industry and regulatory needs around responsible investing. Delivery in 2023 is focussed on strategically meeting mandatory regulatory obligations, and to further enhance and extend usage of ESG data sets and leverage central data mastering capabilities.

    • During 2022 LGIM had three explicit projects undertaking ESG related work covering ESG exclusions, regulatory change, and data and reporting. The STOM (Strategic Target Operating Model) programme also will have impact across LGIM wide ESG capabilities, with its delivery starting in H2 2023.
    • In 2023 all ESG project activity outside of STOM has been combined into a single programme with a priority focus to deliver the mandatory regulatory items first.
    • In H1 2023 the programme remains focussed on deliverables for SFDR and TCFD regulation, given the Level 2 requirements of SFDR came in to force as of 1 January 2023. Significant project work is also underway to centralise data in the LGIM Data Marketplace and leverage the mastering capability for products, accounts, and securities.

     

    Roles substantially contributing to our responsible investing capabilities

    As of May 2023, we also have a further 70 colleagues across Investments whose roles have very substantial contribution to our responsible investing capabilities and whose objectives reflect this although their responsibilities are broader than solely ESG.

    Investments

    • Sonja Laud is Chief Investment Officer (CIO) at LGIM. She leads the firm’s investment team which spans trading as well as solutions, active fixed income, index, active equity, annuities and multi-asset businesses. Her remit covers all aspects of Investments from research analysis to portfolio construction, with a focus on leading LGIM’s responsible investment strategy.
    • LGIM’s investment teams are responsible for integrating sustainability into portfolio outcomes. The below outlines the teams involved with the management of sustainable investment strategies.
    • The Index team – has been managing FTSE4Good indices for nearly 20 years and were the chosen manager to collaborate with the Environment Agency and MSCI to launch a Low Carbon tracker in 2015. We were a pioneer in launching our ESG (Future World Fund range) and have run ESG factor strategies since 2017 and Climate Strategies since 2021. The team is headed by Howie Li, Global Head of Index and ETF with over 17 years industry experience and 4 years at LGIM.
    • The Active Strategies team – has been managing ESG (Future World) strategies since 2018 across Equities and Fixed Income. Most recently a Global Credit SDG aligned strategy and Net Zero strategy have been launched. The team is managed by Colin Reedie, Global Head of Active Strategies with over 35 years industry experience and 16 years at LGIM.
    • The Multi-Asset team – has been managing ESG (Future World) strategies since 2017. The team is managed by Emil van den Heiligenberg, Head of Asset Allocation with over 26 years industry experience and nine years at LGIM.
    • The Solutions Strategies team – has been managing ESG (Future World) Buy and Maintain fixed income strategies since 2018. Most recently the team has had considerable success in launching climate aligned and SDG aligned investment grade credit portfolios for segregated clients. These strategies are now being launched in pooled fund format. The team is managed by Will Riley, Head of Solutions with over 22 years industry experience and three years at LGIM.
    • The Real Assets team – launched a Sustainable Property Fund in 2021 with a net-zero alignment objective. The team is managed by Bill Hughes, Head of Real Assets with over 33 years industry experience and 15 years at LGIM.

     

    Global Research and Engagement Groups

    Our Global Research and Engagement Groups (GREGs) bring together colleagues from across LGIM to identify the challenges and opportunities that will determine the resiliency of sectors and the companies within them. The output from the group strengthens and streamlines the firm’s engagement activities across investments and stewardship, to enable us to collectively set goals and targets at a company level with one voice, whilst supporting and guiding our investment decisions across the capital structure. As of May 2023, there are over 80 participants which includes members of our investment teams primarily along with representation from Investment Stewardship, who overlap on these groups.

     

    Memberships and associations

    We are members of multiple industry-wide associations and networks which promote and encourage strong ESG practices and responsible investing standards. Our involvement with the organisations summarised below highlights how we promote collaborative engagement.

    • 30% Club (2010): Campaign group taking action to increase gender diversity on UK company boards and senior management teams.
    • 30% Club Investor Group Japan (2019): Group of investors taking action to coordinate the investment community's approach to gender diversity on Japan company boards and senior management teams. Meetings are held in Tokyo on a monthly basis. Member of the Best practices working group and Progress tracking working group.
    • 30% Club UK France Investor Group (2020): Group of investors taking action to coordinate the investment community's approach to gender diversity on French company boards and senior management teams. Group was launched in 2020.
    • 30% Club UK Investor Group (2011): Group of investors taking action to coordinate the investment community's approach to gender diversity on UK company boards and senior management teams. Meetings are held in London on a quarterly basis. Chaired Group from 2017-2020.
    • 30% Coalition (2017): Committed to the goal of women, including women of colour, holding 30% of board seats across US public companies
    • Access for Medicine (2020): The Access to Medicine Foundation stimulates and guides pharmaceutical companies to do more for the people living in low- and middle-income countries without adequate access to medicine. Pharma companies are scored in the Access to Medicine Index. ATMF also score companies on their efforts within antimicrobial resistance (AMR) via the AMR Benchmark.
    • Aldersgate Group (2012): An alliance of leaders from business, politics and civil society that drives action for a sustainable economy. L&G/LGIM use this forum to engage with UK and EU policy-makers – e.g. they were instrumental in securing the net zero legislation in the UK.
    • Alliance for Financing a Just Transition (London School of Economics)(2020): Investors and financial institutions joined forces with universities and trade unions to create the FJTA and translate the growing commitment to a just transition across the financial sector into real world impact. Group was launched in 2020.
    • Asian Corporate Governance Association (ACGA)(2012): The ACGA is dedicated to working with financial regulators, stock exchanges, institutional investors and companies to develop and implement better corporate governance practices across 12 markets in Asia.
    • Assogestioni (2015): Representative association of Italian Investment management industry. We are a foreign member of the association.
    • British Council of Offices ESG committee (2001): ESG committee within the BCO, which aims to research, develop and communicate best practice in all aspects of the office sector.
    • British Property Federation (2001): BPF is a membership organisation representing companies involved in property ownership and investment, work with Government and regulatory bodies to help the growth and development of the real estate industry.
    • Building Better Partnership (BBP) (2019): Collaboration of 35 of the UK’s leading commercial property owners who are working together to improve the sustainability of existing commercial building stock.
    • CDP (formerly Carbon Disclosure Project): LGIM is a part of the CDP Investor Program. We also use data points from CDP as part of our company engagement and analysis.
    • Climate Action 100+ (2017): We take part in the ‘world’s biggest single-issue engagement initiative’, focused on the largest corporate emitters of greenhouse gas emissions.
    • Climate Bonds Initiative (2015): LGIM is a signatory of the Paris Green Bonds Statement, committing to support the development of green bonds as part of climate finance solutions.
    • Coalition for Climate Resilient Investment (CCRI) (2020): CCRI is a United Nations Climate Action Summit and COP26 flagship initiative, which represents the commitment of the global private financial industry, in partnership with key private and public institutions, to foster the more efficient integration of physical climate risks in investment decision-making.
    • Corporate Governance Forum (1999): The UK Corporate Governance Forum is a group of UK/EU investors where members can raise UK corporate governance issues. Membership is by invite. Meetings monthly and phone calls bi-weekly.
    • Corporate Reporting and Auditing Group (From 2020, CRAG was formally adopted as an IA sub-committee): Investor Group influencing regulators, standard setters, companies and auditors on corporate reporting, accounting & auditing matters. Shapes the positioning of the IA and PLSA.
    • COP26: Business Leaders Group (2021): LGIM’s CEO, Michelle Scrimgeour, is the co-chair of the UK government’s COP26 Business Leaders Group,an important forum focused on creating business and sector breakthroughs in how we deliver net zero.
    • Council of Institutional Investors (CII) (2011): The CII is an association of pension funds, investors and other foundations and is a leading voice in the US for good corporate governance and strong shareowner rights. We attend the conference every year and have been involved in several collaborative initiatives led by the CII on various ESG topics.
    • Diversity Project (2016): The Diversity Project is a cross-company initiative championing a more inclusive culture within the Savings and Investment profession.
    • European Association for Investors in Non-Listed Real Estate Vehicles (INREV) (2015): Platform for sharing knowledge on the non-listed (unlisted) real estate industry, to improve transparency, professionalism and best practices across the sector.
    • FAIRR Initiative: LGIM is a member of the FAIRR Initiative, an investor group focused on ESG risks, such as climate change and antibiotics resistance, associated with the livestock industry.
    • Finance for biodiversity pledge (2021): As a signatory, by 2024 at the latest we commit to: Collaborating and knowledge sharing; Engaging with companies; Assessing impact; Setting targets; Reporting publicly
    • Glasgow Financial Alliance for Net Zero (2021): The Glasgow Financial Alliance for Net Zero (GFANZ) brings together existing and new net-zero finance initiatives in one sector-wide coalition, GFANZ provides a forum for leading financial institutions to accelerate the transition to a net-zero global economy. LGIM’s CEO, Michelle Scrimgeour, represents L&G on the CEO Principals Group.
    • Global Real Estate Sustainability Benchmark (GRESB) (2012): GRESB is an investor-led initiative to provide ESG data on real asset investments to investors, lenders, managers and the wider industry. GRESB Assessments provide a consistent framework to measure ESG performance based on self-reported data that is validated, scored and peer benchmarked.
    • Green Finance Institute – Coalition for the Energy Efficiency of Buildings (2019): Made up of more than 200 individual members from the finance, property and energy sectors, and across policy, academia and non-profit organisations, the CEEB’s remit is to develop the market for financing a net-zero carbon and climate-resilient built environment in the UK. Established by the Green Finance Institute as its flagship coalition in December 2019.
    • Harvard Institutional Investor Forum (2019): The Harvard Institutional Investor Forum aims at contributing to discourse, policy making and education with respect to institutional investors and issues of interest to them
    • Hong Kong Technical Group on Sustainable Finance (2020): The TEG is a body that aims to improve sustainable finance regulation in the Hong Kong market, under the aegis of the local financial regulator.
    • Human Capital Management Coalition (2011): HCMC is a cooperative effort to further elevate human capital management as a critical component in company performance. The Coalition engages companies and other market participants with the aim of understanding and improving how human capital management contributes to the creation of long-term shareholder value.
    • Institutional Investor Group on Climate Change (IIGCC) (2011): The IIGCC is a forum for collaboration on climate change for European investors. We participate in both the Policy and Solutions working groups. We also have contributed to the strategic direction of the organisation as our Head of Sustainability and Responsible Investment, Meryam Omi, was appointed to the board in early 2016.  In 2018, LGIM co-authored the IIGCC Guide to Addressing Climate Risks and Opportunities in the Investment Process. This report shares practical tips and examples of good practice so that trustees of asset owner organisations are better equipped to adapt their investment processes not only to underpin more resilient investment portfolios, but to also steer capital in support of the attainment of the goals of the Paris Agreement.
    • Interfaith Center on Corporate Responsibility (ICCR): A coalition of 300 global institutional investors. Members represent faith-based organizations, socially responsible asset management companies, unions, foundations, and other responsible investors working alongside a global network of NGO and business partners. The SDGs and the UN Guiding Principles on Business and Human Rights provide the frameworks for the ICCR corporate engagements. The Investor Alliance for Human Rights was launched by ICCR in 2018. Via the ICCR between 200-300 shareholders resolutions are filed per year. We’re members since 2020. ICCR was founded in 1971, filing its first shareholder resolution at GM requesting that the company withdraw its business from South Africa until such time as apartheid was abolished.
    • International Corporate Governance Network (ICGN) (2011): The ICGN is an investor-led organisation which aims to promote better standards of corporate governance and stewardship worldwide.
    • Investment Association (IA) (2014): The IA provides a structure for LGIM to discuss corporate governance policy and push for collective engagement alongside a number of UK investment managers. LGIM is involved within the organisation at board level; LGIM’s CEO sits on the board of directors, while members of LGIM’s Investment Stewardship team sit on the IA’s corporate governance and remuneration committees, as well as the Sustainability and Responsible Investment Committee.
    • Investor Forum (2015): LGIM is a founding member of the Investor Forum, and our Director of Investment Stewardship sits on its board. Membership of the Investor Forum facilitates collaborative engagement with other members and ensures investors speak with one powerful voice.
    • IOPA (Investors for Opioid and Pharmaceutical Accountability) (2018 – as observers. 2019 as members): IOPA came together out of escalating concerns that opioid company business risks can both threaten shareholder value and have profound long-term implications for the economy and society
    • ISG (Investor Stewardship Group) (2017): The ISG brings all types of investors together to establish a framework of basic standards of investment stewardship and corporate governance for U.S. institutional investor and boardroom conduct
    • Japan Climate Leaders’ Partnership (JCLP) (2021): JCLP is a coalition of 178 Japanese companies (as of May 2021). Its goal is to achieve net-zero in Japan by 2050 through activities and voices from business. Activities include: Capturing Important Updates, Taking Actions through Collaboration, Policy Engagement
    • Japan Stewardship Initiative (2020): Founded in Nov 2019, JSI aims to seek industry-wide solutions through discussions and information sharing among asset owners, asset managers and relevant parties on practical challenges in stewardship activities. (Secretariat: Japan Exchange Group, Inc. and ICJ, Inc.)
    • Japan TCFD Consortium: The consortium aims to undertake projects to promote information disclosure based on the TCFD recommendations; projects pertaining to the use of information disclosed in accordance with the TCFD recommendations; and raising awareness of TCFD in Japan.
    • Net Zero Asset Manager Initiative (Founding Signatory since 2020): At the end of 2020, we were one of the founding signatories of the Net Zero Asset Managers Initiative (NZAMI) and committed to being one of those leading our industry to support the transition to reach net-zero greenhouse gas emissions by 2050 or sooner across all assets under management. LGIM sits on the Advisory Committee and is actively involved in the initiative’s Stewardship Working Group.
    • One Planet Asset Manager Initiative (2020): An initiative under the aegis of President Macron, aimed to advance the understanding of climate risk and opportunities within long-term investment portfolios. The asset managers will be supporting six of the world’s largest sovereign wealth funds (Abu Dhabi, Kuwait, Qatar, Saudi Arabia, New Zealand, Norway) to build climate considerations into their decision-making.
    • SASB Standards Advisory Board (SAB) (2020): The SASB SAB provides feedback to the SASB Staff and Standards Board regarding the implementation and use of the standards, and emerging topics and metrics worthy of future consideration.
    • Sustainability Accounting Standards Board (SASB) (2019): LGIMA sits on the Investment Advisory Group of SASB, intending to promote ‘consistent, comparable and reliable disclosure of material and decision-useful ESG information’
    • Sustainability Reporting Standard for Social Housing: Development of a new voluntary ESG disclosure framework in the UK social housing sector.
    • Taskforce on Climate-related Financial Disclosures (TCFD) (2015): LGIM has been a promoter of the Taskforce on Climate-related Financial Disclosures (TCFD), and has publicly encouraged investee companies to report in line with the TCFD recommendations. LGIM has recently published its own TCFD-aligned publication as an asset manager as has the parent company Legal & General as an asset owner.
    • Taskforce on Nature-related Financial Disclosures (TNFD) (2021): LGIM joined the TNFD Observer Group as a member this year, and our primary contribution at this stage is to provide feedback on the output of the working groups, so as to help support the preparatory phase of the TNFD.
    • The United Nations Principles for Responsible Investment (PRI) (2010): An international network of investors promoting responsible investment. LGIM are involved with a number of their workstreams.
    • Transition Pathway Initiative (2017): Research funding partner on asset-owner led initiative which assesses companies' preparedness for the transition to a low carbon economy.
    • UK Green Building Council (UKGBC) (2010): UKGBC is part of the World Green Building Council (WorldGBC) network, a global network of over 70 national Green Building Councils.
    • UNEP Finance Initiative: LGIM participated in the joint project from UNEP FI and the PRI on corporate tax, culminating in the launchof a report entitled Engagement Guidance On Corporate Tax Responsibility

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  • Fund Holdings

    LGIM UK Disclaimer and important legal notice

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    Notes re Filter Options

     

    Vote all shares at AGMs/EGMs (AFM Company Wide)

    LGIM have voting policies in place for approximately 70 markets, and as a result, we vote 99% of the total value of our listed equity holdings. We aim not to abstain unless it is technically impossible not to.

     

    Offer structured intermediary training on sustainable investment (AFM)/Offer unstructured intermediary training on sustainable investment (AFM)

    We take our role in the industry, our global influence and our position as a major global investor very seriously and continue to support and educate our clients and stakeholders on how we can tackle environmental and social challenges arising from a rapidly changing world. To improve awareness of sustainability externally, we have been working with our clients, along with engaging with policy makers, index providers, our peers and the wider industry through regular engagement, communications and training. For example, we issue regular educational materials and training sessions, including;

    • thought leadership
    • checklists for investors, for example to help clients with their regulatory obligations
    • webinars and podcasts
    • regular blogs on important investment themes such as climate change, healthcare and voting
    • training sessions – for example targeted training sessions on climate metrics tailored to our clients’ understanding

     

    ESG specialists on all investment desks

    Given the changing landscape of ESG and responsible investments, LGIM continuously expands resources within this function. We therefore have many people across the business contributing to our ESG insights and research. They sit across various teams with different levels of responsibility relating to ESG but all feed into our responsible investing capabilities. As of August 2023, there are a total of 88 LGIM employees with roles dedicated to ESG. We also have a further 70 colleagues across Investments whose roles have very substantial contribution to our responsible investing capabilities and whose objectives reflect this although their responsibilities are broader than solely ESG.

     

     Fossil fuel exclusion policy (AFM company wide)

    https://www.lgim.com/landg-assets/lgim/_document-library/capabilities/lgimh-coal-policy.pdf

     

    Coal divestment policy (AFM company wide) 

    https://www.lgim.com/landg-assets/lgim/_document-library/capabilities/lgimh-coal-policy.pdf

    https://www.lgim.com/uk/en/responsible-investing/climate-impact-pledge/

     

     

Fund Name DS SRI Style Product Region Asset Type Launch Date
L&G Future World Global Equity Focus Fund Sustainability Tilt SICAV/Offshore* Global Equity

Fund Size: £69.15

Total screened & themed / SRI assets: £332200.00

Total Responsible Ownership assets: £1195690.00

Total assets under management: £1195690.00

As at: 31/12/22

Sustainable, Responsible &/or ESG Policy:

In line with other Future World funds, the Future World Global Equity Focus Fund will not hold ‘pure’ coal miners, manufacturers of controversial weapons and perennial offenders of the UN Global Compact (UNGC).

We do not invest in carbon-intensive sectors, nor any companies that significantly harm any environmental or social objectives.

We do not invest in carbon-intensive sectors, nor any companies that significantly harm any environmental or social objectives.

The Fund pursues its sustainable investment objective by using thematic analysis to invest in companies that the Investment Manager believes will make a positive impact on the environment and society over the long-term. The Fund uses the UN SDGs as a forward looking indicator at the sector level to identify opportunities in companies that are growing in a sustainable manner. Each company is assessed using the Investment Manager’s proprietary tool called ESG Active View, as well as third party tools. ESG Active View brings together granular quantitative and qualitative inputs in order to reflect a full picture of the ESG risks and opportunities embedded within a company. Companies that are not deemed to be sustainable investments are excluded. All investments held by the Fund contribute to one or more of the UN Sustainable Development Goals (SDGs).

We also use revenue thresholds as part of our exclusion procedure. We exclude companies that exceed a 0% revenue threshold for revenues from alcohol, gambling, tobacco, biological weapons, and chemical weapons from our eligible investment universe. We determine the revenue exposure through fundamental analysis of the company and  the use of proprietary (LGIM Active view) and 3rd party tools (Bloomberg, MSCI ESG assessment, Sustainalytics assessments, etc.).

We also apply thresholds to filter out low ESG scoring companies from our investment universe - namely, we do not include any company with MSCI ESG rating below BB, nor any company with LGIM Active Score of less than 35, in our investable universe. Thus, all companies within the portfolio rate average or above average in terms of their ESG profile compared to sector peers.
We include securities with ESG profiles in-line with peers only when we believe there is potential (in terms of intent and capability) for them to eventually outperform peers (from an ESG profile perspective). Consequently, the companies we invest in falls into one of two buckets: ESG Successes or ESG Improvement. ESG Success includes high scoring companies (MSCI ESG rating of AA and above), with best in-class ESG metrics, and we engage with these companies to ensure their future trajectory trends towards remaining best-in-class.

ESG Improvement are currently medium scoring companies (MSCI ESG rating between A to BB ) where we believe they will improve to become above sector average (i.e. MSCI ESG rating of AA and above) in their ESG performance within our investment time horizon (3-5 years). We engage with these companies to push for improvements and to understand their roadmap towards a better ESG profile.

When considering the optimal weights for each investment in our portfolio, we aim for a balance of "ESG success" securities and "ESG improvement" securities to capture both the alpha from outperforming ESG stocks, and the alpha from the change in ESG profile for stocks with room for improvement.

For "ESG success" stocks, we consider the consistency of performance, and the likelihood of outperformance into the future, based on their current ESG strategy, risk frameworks and company culture.

For "ESG improvement" stocks, we consider our level of conviction in the potential for and the speed of change for the ESG issues we deem to be most material for the security. For both buckets of stocks, when determining the ESG profile of the company, we also take into consideration the products offered by the company and whether the products can help other companies address ESG challenges and UN SDGS, in conjunction with the ESG profile of the business practices of the companies.

Given our fund is constructed to consist of 1/ best-in-class "ESG success" securities whom we believe can maintain an above -sector-average ESG profile into the future, and 2/ "ESG improvement" that currently have a ESG profile in line with sector peers, but has a credible roadmap towards becoming an above-sector-average ESG performer, we believe we will be able to consistently beat the benchmark in terms of ESG performance.

Crucially, we monitor the progress and strategies of peer companies, to ensure our securities are evolving at a pace that can ensure sector outperformance. We also balance portfolio weights to ensure we will be able to deliver an overall ESG performance that exceeds that of the benchmark. The monitoring of Active View scores, MSCI ESG ratings and Sustainalytics ratings of our companies, their peers, and our benchmark is also a key part of our process.

In the case of unwelcome developments of ESG aspects in our investment, these will be considered with respect to their impact on the overall risk/return profile of the company. This may lead to a review of the position in the portfolio.

All Future World funds partake in LGIM’s Climate Impact Pledge detailed below;

LGIM’s Climate Impact Pledge: “To engage with the world’s largest companies that are required to adapt their business models and drive innovation in order to meet the global climate change goals. LGIM commits to encourage and accelerate the transition to a low-carbon economy for the long-term benefit of all companies and their investors.”
How it works: Through our research, we identify the largest companies that are critical to the shift to a low-carbon economy and rank them against criteria such as commitment to the low-carbon transition, board composition, strategy and transparency. We then engage with them to improve their ranking and help them strive to be the best in their sectors. LGIM has identified over 1000 companies with which we engage on the Climate Impact Pledge, but the number of companies – and the choice of sectors – may change over time, with input from the Fund’s advisory board. Companies that consistently fail to meet our minimum expectations will eventually be excluded from the fund, subject to a tracking error tolerance. Moreover, in all other LGIM funds that remain invested in those companies that have not met our criteria, we will vote against the chairman until we see satisfactory change. This approach is a powerful tool to drive better company behaviour and raise standards across the market.

All of LGIM’s funds incorporate our Investment Stewardship team’s approach to engaging with companies. The team ensures that the companies in which you’re invested are run with stakeholder interests in mind.

Sustainable, Responsible &/or ESG Process:

We are looking to capture mispriced growth opportunities by integrating long term themes, ESG and fundamental, bottom-up analysis. The integration of the following factors into our investment process provides a number of differentiators and competitive advantages:


Long term thematic research provides exposure to sustainable investment themes, and a portfolio of companies that are positioned for the structural changes impacting their businesses. We conduct comprehensive analysis of industry, market structure, value chain, competitors and suppliers for each company. This enables us to understand the business model and assess the long-term growth opportunity. For each investment idea we build a deep-dive model with a target price at the outset. As part of our strict valuation discipline, this is constantly reviewed to ensure the portfolio stays up-to-date with our strongest conviction ideas.


Detailed fundamental company research should be expected of all equity fund managers, but in our view the comprehensive integration of ESG into the research process is a differentiator, allowing the investment team to assess the material risks and opportunities of what the company does and how it does it, set against the long term trends of the industry.


Extensive company engagement is another differentiator, aided by the unrivalled corporate access as the UKs largest asset manager. We adopt a proactive approach, focusing on where a company is heading, not where it has been. Combining proprietary ESG views and scores, we then look to engage with companies at multiple levels, from the Chairman and Non Executives, through to the CEO, CFO and company management. We engage to drive improvements to companies’ ESG trajectories. These engagements are conducted by the personnel across Equities, Fixed Income and Investment Stewardship. We collaborate extensively internally, and have a longstanding history of commitment to being stewards of the capital that we manage.


When considering the optimal weights for each investment in our portfolio, we aim for a balance of "ESG success" securities and "ESG improvement" securities to capture both the alpha from outperforming ESG stocks, and the alpha from the change in ESG profile for stocks with room for improvement.


For "ESG success" stocks, we consider the consistency of performance, and the likelihood of outperformance into the future, based on their current ESG strategy, risk frameworks and company culture.


For "ESG improvement" stocks, we consider our level of conviction in the potential for and the speed of change for the ESG issues we deem to be most material for the security. For both buckets of stocks, when determining the ESG profile of the company, we also take into consideration the products offered by the company and whether the products can help other companies address ESG challenges and UN SDGS, in conjunction with the ESG profile of the business practices of the companies.


Given our fund is constructed to consist of 1/ best-in-class "ESG success" securities whom we believe can maintain an above -sector-average ESG profile into the future, and 2/ "ESG improvement" that currently have a ESG profile in line with sector peers, but has a credible roadmap towards becoming an above-sector-average ESG performer, we believe we will be able to consistently beat the benchmark in terms of ESG performance.


Crucially, we monitor the progress and strategies of peer companies, to ensure our securities are evolving at a pace that can ensure sector outperformance. We also balance portfolio weights to ensure we will be able to deliver an overall ESG performance that exceeds that of the benchmark. The monitoring of Active View scores, MSCI ESG ratings and Sustainalytics ratings of our companies, their peers, and our benchmark is also a key part of our process.
In the case of unwelcome developments of ESG aspects in our investment, these will be considered with respect to their impact on the overall risk/return profile of the company. This may lead to a review of the position in the portfolio.


Once we have a list of potential investment ideas, we then rank them by the best risk/reward potential to come up with 30~40 best names globally. Positions are adjusted up/down according to risk, diversification, % upside and liquidity. The fund is benchmark and sector agnostic, with a high conviction approach. Further, by adopting a global approach, this enables us to manage a diversified fund and offer diversification to investors.

Our sell discipline is a key element of our portfolio construction, with sell decisions triggered by:

  • Investment working as per plan: Divest when there is 0% upside on the weighted average scenario or <20% on the hypothesis scenario
  • Investment not working as per plan: Increased risk of the stock pricing per its downside scenario, based on new events/news, deteriorating ESG or other fundamental change.
  • Better investment opportunity: A security with a better risk/reward presents itself.
  • Dealing with underperformance: Relative underperformance should be driven by stock selection versus an unintended skew to a currency or sector.


The investment team are supported in their research by a proprietary ESG tool that we have developed called the LGIM Active ESG View. This pools ESG data from a number of providers and provides a holistic view of a company. This means the starting point for further fundamental analysis is consistent. The tool draws on a wide range of indicators, across multiple service providers and it involves our internal teams leveraging their sector expertise, in-depth knowledge of company dynamics and the corporate access we enjoy due to our scale.


The tool incorporates granular quantitative and qualitative inputs to reflect a full picture of the ESG risks and opportunities embedded within each company. This tool covers 4,500 companies across circa 65 sectors and sub sectors, individually weighted to capture material ESG factors. It is important that as a group we collectively leverage the expertise from across the investment teams and Corporate Governance in order to assess a company’s ESG risks, but also to enable us to identify investment opportunities drawing upon data but also taking a dynamic and forward looking view based on company meetings that we have had.


At a company and fund level, we also have an ESG rating, business involvement screening look through and portfolio overview across MSCI Fund Sustainability, Morningstar and Sustainalytics. Internal research is supplemented by qualitative research from academic and NGO research as well as sell-side broker reports. We have looked to adopt the SASB materiality mapping in conjunction with the SDG framework. We believe the two co-align as part of our assessment of individual company investment risk and potential opportunity for positive change.


In addition, we are members of multiple industry-wide associations and networks which promote and encourage strong ESG practices and responsible investing standards. Our involvement with these organisations highlights how we promote collaborative engagement.

Resources, Affiliations & Corporate Strategies

As of May 2023, there are a total of 88 LGIM employees with roles dedicated to ESG, some of which are outlined in more detail below.

 

Investment Stewardship team

  • As Head of Investment Stewardship and Responsible Investment Integration, Michael Marks’ role spans all functions within LGIM from investment stewardship, distribution and investment teams to operational functions such as data and technology; embedding ESG across the firm in all areas and ensuring that focus is maintained on delivering the capabilities required by all stakeholders.
  • The team is responsible for developing and carrying out LGIM’s investment stewardship and active ownership activities. The team comprises subject matter experts in all facets of ESG and is organised in a matrix of thematic and sector coverage.
  • There are 251 people in our global Investment Stewardship team, led by Michael Marks. The team includes those located in the US and Japan, led by John Hoeppner and Trista Chen respectively.
  • Trista joined LGIM in February 2023 as the Head of Investment Stewardship Asia (ex Japan) based in Singapore. This role is a key step in expanding LGIM’s presence in Asia, both strengthening and intensifying LGIM’s Investment Stewardship activities in the region as well as being a spokesperson for LGIM on ESG matters; thereby supporting and enhancing the awareness of LGIM’s brand.
  • Alexander Burr, ESG Policy Lead, continues to lead and progress LGIM’s ESG policy engagement globally.

 

Responsible Investing Strategy team

  • Amelia Tan joined LGIM at the start of 2022 as the Head of Responsible Investing Strategy for Investments. This role ensures that LGIM stays at the cutting edge of innovation within responsible investing and creates a coordinated approach across public asset classes, which is embedded throughout our funds and portfolios.
  • The Responsible Investing Strategy team, comprised of three colleagues, works with investment teams to integrate responsible investing insights into investment process across asset classes and investment styles. Additionally, the team also looks to innovate on responsible investing products and solutions, with the focus on positioning and ensuring that we are market-leading, credible and consistent.

 

Climate Solutions team

  • Nick Stansbury, Head of Climate Solutions, leads our energy transition approach and is one of our most prominent spokespeople on this topic.
  • The Climate Solutions team, which has a total of five team members, have created a bespoke, detailed and investor-focused model to facilitate construction of fully independent energy scenarios. The framework uses in excess of 10 million data variables to model the energy system. The model, LGIM’s Destination@Risk, is now helping to inform our long-term investment decisions and develop dynamic pathways for the energy system.

 

Distribution

  • Laura Brown, Head of Client and Sustainability Solutions, has overall responsibility for Client and Sustainability Solutions at LGIM bringing together our investment capabilities to design solutions to meet investment and sustainability objectives for a wide range of clients. Laura works closely with two further colleagues who are dedicated to ESG and supporting clients’ in meeting their sustainability and responsible investing objectives.

 

Real Assets

  • LGIM’s Real Assets team has a team of seven dedicated ESG experts working across the range of private credit and real estate strategies that we manage. This team is led Shuen Chan.

 

Product Development and Strategy

  • Rachel Ahlquist is focused on developing and shaping the strategic direction of the pooled product range with respect to Responsible Investment features. This includes specific focus on product launch or amendment work with more advanced ESG features.

 

ESG Programme

The LGIM ESG Programme has been running since 2020 and is aligned to LGIM purpose to create a better future through responsible investing. The ESG Programme has been deemed firm critical and necessary to transform the firm capabilities to meet client, industry and regulatory needs around responsible investing. Delivery in 2023 is focussed on strategically meeting mandatory regulatory obligations, and to further enhance and extend usage of ESG data sets and leverage central data mastering capabilities.

  • During 2022 LGIM had three explicit projects undertaking ESG related work covering ESG exclusions, regulatory change, and data and reporting. The STOM (Strategic Target Operating Model) programme also will have impact across LGIM wide ESG capabilities, with its delivery starting in H2 2023.
  • In 2023 all ESG project activity outside of STOM has been combined into a single programme with a priority focus to deliver the mandatory regulatory items first.
  • In H1 2023 the programme remains focussed on deliverables for SFDR and TCFD regulation, given the Level 2 requirements of SFDR came in to force as of 1 January 2023. Significant project work is also underway to centralise data in the LGIM Data Marketplace and leverage the mastering capability for products, accounts, and securities.

 

Roles substantially contributing to our responsible investing capabilities

As of May 2023, we also have a further 70 colleagues across Investments whose roles have very substantial contribution to our responsible investing capabilities and whose objectives reflect this although their responsibilities are broader than solely ESG.

Investments

  • Sonja Laud is Chief Investment Officer (CIO) at LGIM. She leads the firm’s investment team which spans trading as well as solutions, active fixed income, index, active equity, annuities and multi-asset businesses. Her remit covers all aspects of Investments from research analysis to portfolio construction, with a focus on leading LGIM’s responsible investment strategy.
  • LGIM’s investment teams are responsible for integrating sustainability into portfolio outcomes. The below outlines the teams involved with the management of sustainable investment strategies.
  • The Index team – has been managing FTSE4Good indices for nearly 20 years and were the chosen manager to collaborate with the Environment Agency and MSCI to launch a Low Carbon tracker in 2015. We were a pioneer in launching our ESG (Future World Fund range) and have run ESG factor strategies since 2017 and Climate Strategies since 2021. The team is headed by Howie Li, Global Head of Index and ETF with over 17 years industry experience and 4 years at LGIM.
  • The Active Strategies team – has been managing ESG (Future World) strategies since 2018 across Equities and Fixed Income. Most recently a Global Credit SDG aligned strategy and Net Zero strategy have been launched. The team is managed by Colin Reedie, Global Head of Active Strategies with over 35 years industry experience and 16 years at LGIM.
  • The Multi-Asset team – has been managing ESG (Future World) strategies since 2017. The team is managed by Emil van den Heiligenberg, Head of Asset Allocation with over 26 years industry experience and nine years at LGIM.
  • The Solutions Strategies team – has been managing ESG (Future World) Buy and Maintain fixed income strategies since 2018. Most recently the team has had considerable success in launching climate aligned and SDG aligned investment grade credit portfolios for segregated clients. These strategies are now being launched in pooled fund format. The team is managed by Will Riley, Head of Solutions with over 22 years industry experience and three years at LGIM.
  • The Real Assets team – launched a Sustainable Property Fund in 2021 with a net-zero alignment objective. The team is managed by Bill Hughes, Head of Real Assets with over 33 years industry experience and 15 years at LGIM.

 

Global Research and Engagement Groups

Our Global Research and Engagement Groups (GREGs) bring together colleagues from across LGIM to identify the challenges and opportunities that will determine the resiliency of sectors and the companies within them. The output from the group strengthens and streamlines the firm’s engagement activities across investments and stewardship, to enable us to collectively set goals and targets at a company level with one voice, whilst supporting and guiding our investment decisions across the capital structure. As of May 2023, there are over 80 participants which includes members of our investment teams primarily along with representation from Investment Stewardship, who overlap on these groups.

 

Memberships and associations

We are members of multiple industry-wide associations and networks which promote and encourage strong ESG practices and responsible investing standards. Our involvement with the organisations summarised below highlights how we promote collaborative engagement.

  • 30% Club (2010): Campaign group taking action to increase gender diversity on UK company boards and senior management teams.
  • 30% Club Investor Group Japan (2019): Group of investors taking action to coordinate the investment community's approach to gender diversity on Japan company boards and senior management teams. Meetings are held in Tokyo on a monthly basis. Member of the Best practices working group and Progress tracking working group.
  • 30% Club UK France Investor Group (2020): Group of investors taking action to coordinate the investment community's approach to gender diversity on French company boards and senior management teams. Group was launched in 2020.
  • 30% Club UK Investor Group (2011): Group of investors taking action to coordinate the investment community's approach to gender diversity on UK company boards and senior management teams. Meetings are held in London on a quarterly basis. Chaired Group from 2017-2020.
  • 30% Coalition (2017): Committed to the goal of women, including women of colour, holding 30% of board seats across US public companies
  • Access for Medicine (2020): The Access to Medicine Foundation stimulates and guides pharmaceutical companies to do more for the people living in low- and middle-income countries without adequate access to medicine. Pharma companies are scored in the Access to Medicine Index. ATMF also score companies on their efforts within antimicrobial resistance (AMR) via the AMR Benchmark.
  • Aldersgate Group (2012): An alliance of leaders from business, politics and civil society that drives action for a sustainable economy. L&G/LGIM use this forum to engage with UK and EU policy-makers – e.g. they were instrumental in securing the net zero legislation in the UK.
  • Alliance for Financing a Just Transition (London School of Economics)(2020): Investors and financial institutions joined forces with universities and trade unions to create the FJTA and translate the growing commitment to a just transition across the financial sector into real world impact. Group was launched in 2020.
  • Asian Corporate Governance Association (ACGA)(2012): The ACGA is dedicated to working with financial regulators, stock exchanges, institutional investors and companies to develop and implement better corporate governance practices across 12 markets in Asia.
  • Assogestioni (2015): Representative association of Italian Investment management industry. We are a foreign member of the association.
  • British Council of Offices ESG committee (2001): ESG committee within the BCO, which aims to research, develop and communicate best practice in all aspects of the office sector.
  • British Property Federation (2001): BPF is a membership organisation representing companies involved in property ownership and investment, work with Government and regulatory bodies to help the growth and development of the real estate industry.
  • Building Better Partnership (BBP) (2019): Collaboration of 35 of the UK’s leading commercial property owners who are working together to improve the sustainability of existing commercial building stock.
  • CDP (formerly Carbon Disclosure Project): LGIM is a part of the CDP Investor Program. We also use data points from CDP as part of our company engagement and analysis.
  • Climate Action 100+ (2017): We take part in the ‘world’s biggest single-issue engagement initiative’, focused on the largest corporate emitters of greenhouse gas emissions.
  • Climate Bonds Initiative (2015): LGIM is a signatory of the Paris Green Bonds Statement, committing to support the development of green bonds as part of climate finance solutions.
  • Coalition for Climate Resilient Investment (CCRI) (2020): CCRI is a United Nations Climate Action Summit and COP26 flagship initiative, which represents the commitment of the global private financial industry, in partnership with key private and public institutions, to foster the more efficient integration of physical climate risks in investment decision-making.
  • Corporate Governance Forum (1999): The UK Corporate Governance Forum is a group of UK/EU investors where members can raise UK corporate governance issues. Membership is by invite. Meetings monthly and phone calls bi-weekly.
  • Corporate Reporting and Auditing Group (From 2020, CRAG was formally adopted as an IA sub-committee): Investor Group influencing regulators, standard setters, companies and auditors on corporate reporting, accounting & auditing matters. Shapes the positioning of the IA and PLSA.
  • COP26: Business Leaders Group (2021): LGIM’s CEO, Michelle Scrimgeour, is the co-chair of the UK government’s COP26 Business Leaders Group,an important forum focused on creating business and sector breakthroughs in how we deliver net zero.
  • Council of Institutional Investors (CII) (2011): The CII is an association of pension funds, investors and other foundations and is a leading voice in the US for good corporate governance and strong shareowner rights. We attend the conference every year and have been involved in several collaborative initiatives led by the CII on various ESG topics.
  • Diversity Project (2016): The Diversity Project is a cross-company initiative championing a more inclusive culture within the Savings and Investment profession.
  • European Association for Investors in Non-Listed Real Estate Vehicles (INREV) (2015): Platform for sharing knowledge on the non-listed (unlisted) real estate industry, to improve transparency, professionalism and best practices across the sector.
  • FAIRR Initiative: LGIM is a member of the FAIRR Initiative, an investor group focused on ESG risks, such as climate change and antibiotics resistance, associated with the livestock industry.
  • Finance for biodiversity pledge (2021): As a signatory, by 2024 at the latest we commit to: Collaborating and knowledge sharing; Engaging with companies; Assessing impact; Setting targets; Reporting publicly
  • Glasgow Financial Alliance for Net Zero (2021): The Glasgow Financial Alliance for Net Zero (GFANZ) brings together existing and new net-zero finance initiatives in one sector-wide coalition, GFANZ provides a forum for leading financial institutions to accelerate the transition to a net-zero global economy. LGIM’s CEO, Michelle Scrimgeour, represents L&G on the CEO Principals Group.
  • Global Real Estate Sustainability Benchmark (GRESB) (2012): GRESB is an investor-led initiative to provide ESG data on real asset investments to investors, lenders, managers and the wider industry. GRESB Assessments provide a consistent framework to measure ESG performance based on self-reported data that is validated, scored and peer benchmarked.
  • Green Finance Institute – Coalition for the Energy Efficiency of Buildings (2019): Made up of more than 200 individual members from the finance, property and energy sectors, and across policy, academia and non-profit organisations, the CEEB’s remit is to develop the market for financing a net-zero carbon and climate-resilient built environment in the UK. Established by the Green Finance Institute as its flagship coalition in December 2019.
  • Harvard Institutional Investor Forum (2019): The Harvard Institutional Investor Forum aims at contributing to discourse, policy making and education with respect to institutional investors and issues of interest to them
  • Hong Kong Technical Group on Sustainable Finance (2020): The TEG is a body that aims to improve sustainable finance regulation in the Hong Kong market, under the aegis of the local financial regulator.
  • Human Capital Management Coalition (2011): HCMC is a cooperative effort to further elevate human capital management as a critical component in company performance. The Coalition engages companies and other market participants with the aim of understanding and improving how human capital management contributes to the creation of long-term shareholder value.
  • Institutional Investor Group on Climate Change (IIGCC) (2011): The IIGCC is a forum for collaboration on climate change for European investors. We participate in both the Policy and Solutions working groups. We also have contributed to the strategic direction of the organisation as our Head of Sustainability and Responsible Investment, Meryam Omi, was appointed to the board in early 2016.  In 2018, LGIM co-authored the IIGCC Guide to Addressing Climate Risks and Opportunities in the Investment Process. This report shares practical tips and examples of good practice so that trustees of asset owner organisations are better equipped to adapt their investment processes not only to underpin more resilient investment portfolios, but to also steer capital in support of the attainment of the goals of the Paris Agreement.
  • Interfaith Center on Corporate Responsibility (ICCR): A coalition of 300 global institutional investors. Members represent faith-based organizations, socially responsible asset management companies, unions, foundations, and other responsible investors working alongside a global network of NGO and business partners. The SDGs and the UN Guiding Principles on Business and Human Rights provide the frameworks for the ICCR corporate engagements. The Investor Alliance for Human Rights was launched by ICCR in 2018. Via the ICCR between 200-300 shareholders resolutions are filed per year. We’re members since 2020. ICCR was founded in 1971, filing its first shareholder resolution at GM requesting that the company withdraw its business from South Africa until such time as apartheid was abolished.
  • International Corporate Governance Network (ICGN) (2011): The ICGN is an investor-led organisation which aims to promote better standards of corporate governance and stewardship worldwide.
  • Investment Association (IA) (2014): The IA provides a structure for LGIM to discuss corporate governance policy and push for collective engagement alongside a number of UK investment managers. LGIM is involved within the organisation at board level; LGIM’s CEO sits on the board of directors, while members of LGIM’s Investment Stewardship team sit on the IA’s corporate governance and remuneration committees, as well as the Sustainability and Responsible Investment Committee.
  • Investor Forum (2015): LGIM is a founding member of the Investor Forum, and our Director of Investment Stewardship sits on its board. Membership of the Investor Forum facilitates collaborative engagement with other members and ensures investors speak with one powerful voice.
  • IOPA (Investors for Opioid and Pharmaceutical Accountability) (2018 – as observers. 2019 as members): IOPA came together out of escalating concerns that opioid company business risks can both threaten shareholder value and have profound long-term implications for the economy and society
  • ISG (Investor Stewardship Group) (2017): The ISG brings all types of investors together to establish a framework of basic standards of investment stewardship and corporate governance for U.S. institutional investor and boardroom conduct
  • Japan Climate Leaders’ Partnership (JCLP) (2021): JCLP is a coalition of 178 Japanese companies (as of May 2021). Its goal is to achieve net-zero in Japan by 2050 through activities and voices from business. Activities include: Capturing Important Updates, Taking Actions through Collaboration, Policy Engagement
  • Japan Stewardship Initiative (2020): Founded in Nov 2019, JSI aims to seek industry-wide solutions through discussions and information sharing among asset owners, asset managers and relevant parties on practical challenges in stewardship activities. (Secretariat: Japan Exchange Group, Inc. and ICJ, Inc.)
  • Japan TCFD Consortium: The consortium aims to undertake projects to promote information disclosure based on the TCFD recommendations; projects pertaining to the use of information disclosed in accordance with the TCFD recommendations; and raising awareness of TCFD in Japan.
  • Net Zero Asset Manager Initiative (Founding Signatory since 2020): At the end of 2020, we were one of the founding signatories of the Net Zero Asset Managers Initiative (NZAMI) and committed to being one of those leading our industry to support the transition to reach net-zero greenhouse gas emissions by 2050 or sooner across all assets under management. LGIM sits on the Advisory Committee and is actively involved in the initiative’s Stewardship Working Group.
  • One Planet Asset Manager Initiative (2020): An initiative under the aegis of President Macron, aimed to advance the understanding of climate risk and opportunities within long-term investment portfolios. The asset managers will be supporting six of the world’s largest sovereign wealth funds (Abu Dhabi, Kuwait, Qatar, Saudi Arabia, New Zealand, Norway) to build climate considerations into their decision-making.
  • SASB Standards Advisory Board (SAB) (2020): The SASB SAB provides feedback to the SASB Staff and Standards Board regarding the implementation and use of the standards, and emerging topics and metrics worthy of future consideration.
  • Sustainability Accounting Standards Board (SASB) (2019): LGIMA sits on the Investment Advisory Group of SASB, intending to promote ‘consistent, comparable and reliable disclosure of material and decision-useful ESG information’
  • Sustainability Reporting Standard for Social Housing: Development of a new voluntary ESG disclosure framework in the UK social housing sector.
  • Taskforce on Climate-related Financial Disclosures (TCFD) (2015): LGIM has been a promoter of the Taskforce on Climate-related Financial Disclosures (TCFD), and has publicly encouraged investee companies to report in line with the TCFD recommendations. LGIM has recently published its own TCFD-aligned publication as an asset manager as has the parent company Legal & General as an asset owner.
  • Taskforce on Nature-related Financial Disclosures (TNFD) (2021): LGIM joined the TNFD Observer Group as a member this year, and our primary contribution at this stage is to provide feedback on the output of the working groups, so as to help support the preparatory phase of the TNFD.
  • The United Nations Principles for Responsible Investment (PRI) (2010): An international network of investors promoting responsible investment. LGIM are involved with a number of their workstreams.
  • Transition Pathway Initiative (2017): Research funding partner on asset-owner led initiative which assesses companies' preparedness for the transition to a low carbon economy.
  • UK Green Building Council (UKGBC) (2010): UKGBC is part of the World Green Building Council (WorldGBC) network, a global network of over 70 national Green Building Councils.
  • UNEP Finance Initiative: LGIM participated in the joint project from UNEP FI and the PRI on corporate tax, culminating in the launchof a report entitled Engagement Guidance On Corporate Tax Responsibility

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