Fund Size: £168.90

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:

The Future World Global Credit Fund is a high-conviction expression of LGIM’s long-term themes, seeking to invest in sustainable opportunities that will shape both the investment industry and society for years to come. The Future World funds aim to have a positive impact on society and create a powerful incentive for companies to change their behaviour. We believe our approach can create opportunities for our clients and help to safeguard them against future risks, with the potential for better long-term financial outcomes.

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

LGIM’s Climate Impact Pledge is a targeted engagement campaign we started in 2016 to address the systemic risk of climate change. Our programme initially focused on 80 companies, with divestment sanctions associated with a single fund. In 2020, it was expanded to around 1,000 companies, and as at the end of 2022, potential exclusions applied to over £157.6 billion of our assets. Towards the end of 2022, we substantially broadened the scope and strengthened the expectations of our dedicated climate engagement programme with the goal of accelerating progress towards net-zero greenhouse gas (GHG) emissions globally. We have expanded the scope in three main ways:

• Increased the number of ‘climate-critical’ sectors assessed and engaged with from 15 to 20
• We have significantly extended the number of companies covered by our data-driven assessment from around 1,000 to over 5,000, thereby capturing more of LGIM’s portfolio emissions
• We have increased the number of companies subject to direct engagement from 60 to over 100

Drawing on some 70 data points, leveraging LGIM’s proprietary climate modelling as well as third-party data, our company assessments (climate ratings) are focused on five key pillars. These are in alignment with recommendations from the Task Force on Climate-Related Financial Disclosures (TCFD) and are publicly available under a ‘traffic light’ system on our dedicated website; this enables companies to transparently verify progress and identify areas which need improvement. By linking our votes to specific data points aligned with our principles-based approach, we aim to exert our influence more consistently and widely across markets. We will follow this assessment with direct engagement with key selected companies whose actions have the potential to galvanise their sectors. We have selected 100+ companies for this in-depth engagement, combining the expertise of sector specialists from across LGIM’s investment teams and our Investment Stewardship team.

We publish details of our key expectations and ‘red lines’ for each sector, allowing companies to address gaps in strategy and disclosures. To help improve climate accountability across sectors, under our expanded policy in 2020 we announced that we would be voting against all companies globally that do not meet at least one – or, for companies in North America, Europe and Australasia, three – of the minimum standards for their relevant sector. Where companies have fallen short of our expectations due to a lack of response to our engagement requests and/or crossing one of our ‘red lines’ this leads to voting sanctions, and potentially disinvestment from relevant funds. By linking our votes to specific data points aligned with our principles-based approach, we aim to exert our influence more consistently and broadly across markets, with automatic alerts to companies at risk of being voted against by us.

Details of LGIM’s Climate Impact Pledge score can be accessed here. In our most recent report, we announced that we are keeping twelve companies on our sanction list from previous years and adding two more companies this year. We have removed one company from our sanction list and reinstated it in select funds. Details of LGIM’s Climate Impact Pledge score can be accessed here.

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 your interests in mind.

Net Zero Asset Managers Initiative: LGIM is a founding signatory of the Net Zero Asset Managers. “By signing up to the Net Zero Asset Managers Initiative, LGIM is committing – in partnership with and on behalf of our clients – to invest in alignment with the net-zero emissions framework by 2050 or sooner.”

Sustainable, Responsible &/or ESG Process:

Below we summarise the key ESG credentials of the strategy

 Higher ESG standards

We believe that well-managed companies are more likely to deliver sustainable long-term returns. Assessing companies on their management of environmental, social and governance (ESG) issues is an important element of risk management, and therefore part of investors’ fiduciary duty. In portfolio construction the portfolio managers favour companies that we believe will exhibit higher ESG standards over the long-term.

The Future World Protection List

The Future World Protection List has been specifically developed for our Future World fund range. Through this fund range, companies are incentivised to operate more sustainably allowing clients to go further in integrating ESG factors into their investment strategy. The list may also be used in other investment strategies as determined by LGIM. Companies are incorporated into the list if they fail to meet minimum standards of globally accepted business practices. Across the LGIM-designed Future World funds, securities issued by such companies will not be held or exposure to them will be significantly reduced.

The Future World Protection List includes companies which meet any of the following criteria:

Involvement in the manufacture and production of controversial weapons

Perennial violators of the United Nations Global Compact, an initiative to encourage businesses worldwide to adopt sustainable and socially responsible policies.

Pure coal miners – companies solely involved in the extraction of coal

The methodology will be formally reviewed on an annual basis by the LGIM Corporate Governance team. Any changes to the methodology will be subject to a formal overview and approval by senior management.

Controversial weapons – have an indiscriminate and disproportional humanitarian impact on civilian population, the effects of which can be felt long after military conflicts have ended and often result in multi-generational humanitarian suffering. These include anti-personnel landmines, cluster munitions, biological, chemical and nuclear weapons.

UN Global Compact (UNGC) – is a set of globally agreed standards on human rights, labour, environment and corruption which was created for the purpose of encouraging businesses worldwide to adopt environmentally and socially responsible policies. Companies whose activities breach such principles present increased investment risks due to lax governance and management of their own operations, which can lead to grave reputational damage and potential future liabilities.

Pure coal companies – the use and extraction of coal produces significantly high levels of greenhouse gas (GHG) emissions, contributing to the accelerated warming of the planet. Pure coal companies present heightened investment risks due to the increasing regulatory pressure to limit GHG emissions globally, combined with technological advances such as renewables, which can reduce demand for coal.

Climate aware

The fund aims to produce a return derived from capital growth and income by investing in fixed and floating-rate securities. The fund aims to deliver this objective while decarbonising the portfolio over time, targeting a 50% reduction in weighted average carbon intensity by 2030, compared to a December 2019 baseline level.

In portfolio construction the portfolio managers favour issuers within their sectors that have the potential to demonstrate lower carbon intensity over the long term. The fund’s objective overall is to have a lower carbon footprint than the monitoring index, that it will exhibit a preference for issuers generating revenue from green sources and will seek to avoid companies with a high exposure to potentially stranded coal and oil assets.

Our Future World Global Credit Fund follows a Buy and Maintain investment approach expressing long-term ESG themes. In our Buy and Maintain funds, our philosophy is that value can best be added/preserved through an understanding of the macroeconomic environment in order to identify and position portfolios to benefit from medium- and longer-term investment themes. Our resulting investment style can be described as macro-thematic, in that we utilise the work of our in-house economists and strategists to establish long-term themes which provide guidance for sector allocation and bottom-up stock-selection by our team of credit researchers.

Fundamental credit analysis is central to the strategy. We have 27 credit analysts based in two locations, London and Chicago, providing the team with greater capacity to cover the global market and seek out the best ideas. Our credit research team consists of experienced career analysts who are industry specialists. Having a local presence enables our analysts to meet regularly with the companies that they monitor and provides the team with greater capacity to cover the global market in order to seek out the best ideas.

Regular communication is the key for our analysts particularly when analysts are covering sectors for two locations. Dialogue among team members is continuous and our investment process is supported by a well-defined and regular meeting cycle. Daily meetings take place in both London and Chicago, with team members dialling in via conference calls. Other forms of communication include InteractiveBroker chats and Bloomberg Research Publisher.

Our Buy and Maintain investment process has two distinct parts – the buy process which determines initial portfolio construction and the maintain process which covers portfolio monitoring, decisions about when to sell securities and when to hold them, plus how to replace the value of bonds that have been sold.

Buy process

The buy process, in a similar way to LGIM’s active benchmarked credit portfolios, uses the top-down thematic and bottom-up issuer-selection approach described in the following pages. The portfolio manager is able to leverage the shared resource of the credit analysts, strategists, economist and other research functions. The outputs of the credit research process are used heavily during the initial investment phase and in the investment of new cash flows in the portfolio. These outputs are used to screen the investment universe and in the final stages of the portfolio construction process we emphasise themes/issuers where we see the most value and have the highest conviction.

In Buy and Maintain portfolios, we buy with an expectation to hold to maturity and therefore:

emphasise long-term visibility of sector/issuer fundamentals

look for a strong and stable management team where we have confidence in their abilities

look for alignment of shareholder, bondholder and management interests

ensure that there are minimal risks that could cause step-changes in valuation

identify structural features (e.g. asset backing) that provide downside protection in periods of lower liquidity.

Maintain process

Although it is our intention to hold securities to maturity, we will sell if we become concerned about severe downside risk in a specific security, sector or region. The key decision here is when to sell and when to hold. We will endeavour to replace the duration and spread from sales. In order to recoup the value lost in these situations and to improve the portfolio, we will engage in other trades, including relative value trades (e.g. cross currency) to help achieve this. Additionally, we will incorporate the latest credit strategy and bottom-up views as we reinvest the proceeds of sales or other cash flows that may arise and can be reinvested. In this way we are able to preserve the credit income earned.

Credit research is key

While the credit analysis process is similar for all credit strategies at LGIM, for Buy and Maintain portfolios there is a larger emphasis placed on credit quality over technicals (e.g., market liquidity) given the longer expected investment time horizon. In general, for our Buy and Maintain portfolios, we prefer to invest in strong cash flow generating companies within fixed-asset heavy, high barrier-to-entry industries. For example, industry leaders in the utility sector, in particular water companies are generally preferred over companies within technology risk or other ‘asset-light’ industries.

We have a Green/Amber/Red Buy and Maintain ‘universe recommendations’ which is a long-term view on a company’s credit quality. To summarise, the Buy and Maintain ‘universe recommendations’ include:

Stable/Improving (green): The Referenced Credit demonstrates the characteristics to provide stable or improving credit quality characteristics over the life of the investment. Threats of a credit rating downgrade are minimal (i.e., less than 30%) given the information available at the time of analyst review. The company, sector, and management team are supportive of stable credit quality over the next five years. There is no near-term catalyst that would likely cause a rating downgrade during this period.

Caution (amber): The Referenced Credit demonstrates characteristics that are appropriate for Buy and Maintain investment, but has characteristics that require closer monitoring. There is a meaningful (i.e. greater than 30%) likelihood of credit deterioration that would result in a rating downgrade of at least one notch, but remain investment grade.

Avoid (red): The Referenced Credit has risk of severe credit quality deterioration or demonstrates a business model that the analyst deems to be unsupportive of a long-term investment. The severity of the expected credit deterioration is defined as a greater than 50% probability of: (i) a credit rating downgrade to High Yield or (ii) a greater-than-one-notch credit rating downgrade.

There are certain companies and/or sectors that have a business model or structure that is not conducive to long-term investment. For example, a company with an excellent balance sheet, but who operates in a sector with very low barriers to entry, low pricing power, or a meaningful threat of substitutes. In addition, the analyst may believe that management is poor or incentivised to act in a manner that will meaningfully increase the risk of credit deterioration.

Given the long-term investment horizon of the strategy, sectors that we typically avoid are:

Deeply subordinated financials (T1, UT2 and contingent capital bank and insurance securities) – these can be highly volatile securities, with less certain cash-flows and hence are less suited to a liability aware Buy and Maintain approach and, as such, are more suitable to an actively traded mandate as oppose to a buy and maintain approach.

Technology sector – technology industries are rapidly changing and as such longer dated securities in particular are more suitable for an actively traded mandate as opposed to a buy and maintain approach.

High yield – companies in this universe typically operate with higher business risk and/or financial risk than investment grade peers. As such there is usually greater sensitivity to the business cycle, refinancing costs and any change in industry dynamics, with the implication that visibility on fundamentals tends to be more short-term in nature. These securities also typically contain call options which make cash flows uncertain and combined with the non-negligible probability of default mean that these do not make reliable matching assets for pension liabilities. As such we do not typically purchase sub investment grade securities as we do not believe this is consistent with what we call a liability aware approach. We do however typically permit ourselves to hold bonds that are downgraded to sub-investment grade up to a maximum of 10% in order that we are able to mitigate losses from being a forced seller in the event that an issuer held is downgraded.

We do not exclude BBB- securities because of the flexibility we typically have to continue holding in the event of downgrade to sub-investment grade. In addition we believe that we have the capability to find attractively priced stable or improving credits in this category.

Risk management

Risk management is an essential part of the strategy. Risk is managed at the stock, sector and overall market level. We consider all positions in terms of position size and credit beta (or duration times spread) and this is embedded into our portfolio management platform. The portfolio is constructed to have balanced sector exposure on a portfolio value and DTS basis, and to have multiple sources of risk and return. Stock-specific risk is screened by our team of credit analysts.

A summary of our main portfolio management risk controls for the strategy is provided below:

• Years-to-maturity guideline range.
• Issuer and sector size positions are measured using both DTS (duration times spread) and PV (portfolio value %).
• Credit quality evolution is monitored and tracked using WARF (weighted average rating factor).
• Portfolio volatility is monitored and tracked using VaR.
• Collateral management for non GBP hedging instruments i.e. FX forwards and interest rate swaps is modelled and monitored using a VaR.

In addition to the above, on a weekly basis our Independent Risk team produce a summary for the portfolio manager detailing historical scenario style stress tests for scenarios such as the October 2008 credit crunch, April 2010 Greek crisis, June 2013 QE tapering announcement etc
 .

 Integration of ESG factors in LGIM’s active fixed income strategies

In our Active Fixed Income strategies, ESG is one of the many risk factors considered in our investment process. We believe that if companies fail to meet minimum standards on ESG, it can undermine the customer franchise and competitive position of corporate borrowers and expose them to heightened regulatory and litigation risks; this may severely impair their ability to fund themselves in the debt or equity markets.

Our investment framework has therefore been designed with several objectives in mind:

• assessing a company’s ESG risks: we see unmanaged ESG factors as posing potential risks and opportunities, which can have a material impact on the performance of investments
• identifying the winners of the future – the companies to which investors will allocate ever-larger amounts of capital.

ESG factors are integrated into the investment process using a dual top-down and bottom-up approach. Once we have identified a long-term theme the next stage is to pinpoint the companies that are best placed to benefit or most likely to lose out from it within the value chain. This is supported by our fundamental bottom-up research, which includes ESG assessment and company engagement. This helps us to understand key drivers impacting the company and most importantly how much of the change has been priced in to the market.

Top-down: Long term themes

The long-term thematic groups were established to undertake top-down research and analysis of macro-economic issues, many of which relate to macro-level ESG issues. The groups consist of investment professionals from credit, equity, real assets and multi-asset teams and representatives from the Corporate Governance team.

The companies in which we invest stand to benefit from or are driving the long-term thematic shifts changing our world. As structural shifts in demographics, energy, technology and politics transform society, it is more important than ever for investors to understand the structural changes shaping the world in which we live. Our starting point is forming a clear and connected view of the world.

In addition, analysing the connections between these themes, through a combined research effort across asset classes, can provide valuable and often unique insights into how companies are adapting to a changing world, ultimately leading to investment ideas.

Bottom-up: ESG integration using systematic and scalable tools

Our experienced credit research team undertakes comprehensive bottom up analysis into companies, incorporating the long-term views, fundamental sector and company analysis, and material ESG factors, alongside a strict valuation discipline.

To support this process we have developed systematic and scalable tools and processes to identify, assess and appropriately integrate relevant ESG factors across asset classes and investment strategies. These are detailed below.

Active engagement

Our direct engagement with companies helps us identify ESG risks and opportunities. Ongoing dialogue with companies is a fundamental aspect of LGIM’s approach to responsible investment. Investment teams and the Corporate Governance team regularly meet companies together, when appropriate. Importantly, outcomes from these engagements are fed back into our Active View tool.

ESG tools
 To support this process, we have developed systematic and scalable tools and processes to identify, assess and appropriately integrate relevant ESG factors across asset classes and investment strategies.

Here we focus on:

The ESG Score – used to drive the engagement framework for our Corporate Governance team and used throughout the business. The ESG Score follows a rules-based methodology to score companies against ESG metrics. We have identified 28 ESG indicators – a relatively limited set – which we believe to be most significant and material for long-term investors.

The ESG Active View – used as an essential component of the research and portfolio management process for our active equity and fixed income teams.

The tool goes further than the LGIM ESG Score, incorporating additional granular quantitative and qualitative inputs and assessments in order to reflect a full picture of the ESG risks and opportunities embedded within each company.

We believe that incorporating a qualitative element is essential in order to fully capture the ESG risks and opportunities embedded within each company. Where our internal analysis and engagement has led to additional ESG insights– either on an individual data point or an overall factor – we feed that back into the ESG tool and it is captured in our overall ESG Active View.

When we combine these considerations we are able to apply a status ranging from ‘very strong’ through to ‘very weak’ for each company. The degree to which this ESG View drives bond and equity selection will depend on the fund design.

For our active fixed income strategies, the ESG Active View is fully integrated into how we fundamentally assess a company. The ESG Active View provides an overview of how the company is managing potential, sector-specific ESG risks and opportunities, so that these can be considered alongside all other components of investment analysis. Where there is clear materiality between ESG factors and financial performance, the analyst may consider these directly as part of the financial analysis (for example, incorporating the impact of regulatory fines on cash flows).

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

Dialshifter

Literature

• Fund overview & literature (including factsheet)
• LGIM’s Future World Protection List: Methodology
• Prospectus