Fund Size: £400.00m

Total screened & themed / SRI assets: £500.00

Total Responsible Ownership assets: £16900.00

Total assets under management: £16900.00

As at: 30/11/20

Overview

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Fund information

Policy

The UN Sustainable Development Goals (SDGs) are a framework which defines the major challenges we face as a global community. The 17 goals are wide ranging and ambitious and are defined further in the 169 sub-goals. Whilst the portfolios do not aim to achieve the UN Sustainable Development Goals, many of the funds do align the companies they invest in with the SDGs. We have mapped a number of the goals across our Sustainable Investment Pillars which outline a number of sustainable investment opportunities and trends seen in the portfolios. All funds held in the Sustainable Portfolios align to one or more of our Sustainable Investment Pillars. Two of the pillars are environmental and two are social. The mapping to these pillars help our clients understand the thematic exposure in the portfolios, and to better understand the companies and the impact those companies are having.

We aim to invest in companies that have a clear intention to have a positive effect on some or all of the UN Sustainable Development Goals and to measure and report on the performance and progress of the underlying investments against our sustainable pillars:

• Healthcare and societal well-being
• Education and training
• Resources and the circular economy
• Climate and environmental action

Process

For us, sustainability has to be more than just a label. We demonstrate this in the approach we take to running our own business, and through the Sustainable Model Portfolios we run at LGT Vestra, where we strive to identify similar businesses. In order to do this, we implement a best-in-class approach to sustainable investing, to allocate capital to businesses that are driving real change. It is important to point out that we recognise that no business is perfect and neither is any portfolio. Just as we are, all companies are on a journey.

In order to identify these companies and investment opportunities, we have designed a robust and holistic framework for sustainability analysis. Our sustainable investing framework assesses the sustainability of an investment from three key perspectives: intentionality, integration and impact.

Our sustainable investing framework assesses the sustainability of an investment from three key perspectives: intentionality, integration and impact.

Intentionality: this is assessed through deep-dive analysis of a fund manager's commitment to the sustainable allocation of capital

• Commitment to sustainability by the investment house (e.g. UN PRI signatory status, industry engagement, net-zero ambitions)
• Qualitative assessment of the investment mandate (conducted through face-to-face meetings with the investment team), to ensure the motive behind the fund reflects the mandate
• Quantitative analysis using ESG data is undertaken to ensure the underlying holdings align with the fund's stated mission and philosophy

Whilst the focus of our analysis is on assessing the sustainability of the investment, we also ensure that the funds avoid investing in sectors including thermal coal, tobacco, alcohol and controversial weapons.

Integration: this is assessed through understanding the ESG profile of the underlying companies

• We want to understand the ESG practices of underlying businesses
• We want to understand how this ESG information is integrated within the fund's investment process, including at asset allocation level
• We want to ensure that the fund is deliberately allocating capital to businesses that have high levels of operation (or good ESG scores)

Impact: we assess this through the impact data produced by the fund, and through our own impact assessment

• For the funds that measure the impact generated by the strategy, we assess the methodology and calculation of this impact. Metrics include water, energy, renewable energy production and access to healthcare
• For every fund we assess the carbon intensity of the underlying holdings (scope 1 + 2, and score 3), versus the benchmark

Resources, Affiliations & Corporate Strategies

The Sustainability Board chaired by H.S.H. Prince Max von und zu Liechtenstein, CEO LGT, defines the strategic direction and guidelines for sustainability. LGT Group’s entire senior management and other areas of the business are represented on the Sustainability Board. The Sustainability board and our think tank feed into the sustainability foundation board. We have individual sustainable committees for each of the business areas (private banking, asset management, impact/philanthropy, operations and HR). We have a dedicated team working on operation sustainability as well as dedicated sustainable investing teams. 

LGT's unique ownership structure is linked to a long-term and holistic approach to doing business. LGT adopted a sustainable mindset early on and long-term thinking and acting have always been a key trait.

LGT's Sustainability Strategy 2025

LGT has been working for many years now to further strengthen our business' commitment to sustainability. In 2018, LGT introduced the Sustainability Strategy 2025, which sets out our company's binding goals to be reached by 2025 across all business areas. The core tenets of the strategy are sustainable investing, sustainable business operations and sustainable thinking.

Sustainable business operations: LGT's 2025 environmental targets

In order to ensure progress is made in reducing our negative impact on the environment, the measures we have undertaken are linked to ambitious targets set out in our Sustainability Strategy 2025. To achieve these targets, we are reducing energy consumption, purchasing renewable energy and offsetting unavoidable CO2 emissions. We use advancements in technology to optimize our operations in an environmentally sustainable manner. In our London office we purchase 100 percent renewable energy, in Liechtenstein, we purchase 100 percent renewable energy and approx. 8-10 percent of total electrical energy consumption is produced through our own photovoltaic installations. In a number of LGT's offices, clients and employees can charge their electric cars in garage parking charging points.

LGT Venture Philanthropy Foundation

Each year, a minimum of ten percent of LGT Group dividends are allocated to philanthropic activities. The LGT Venture Philanthropy Foundation (LGT VP) was founded in 2007 with the aim of improving the quality of life of disadvantaged people, contributing to healthy ecosystems, and building resilient, inclusive, and prosperous communities. LGT VP deploys philanthropic capital to organisations with effective, innovative, and scalable solutions to social and environmental challenges. The foundation primarily supports organisations based in emerging markets, focusing on high-impact sectors, including education, health, and environment. This financial assistance really helps the organisations, but just as important are the transfer of knowledge and access to networks that the foundation facilitates.

Our industry engagement

LGT collaborates with other organisations globally across the following initiatives on the topic of sustainability, including:

• Carbon Disclosure Project
• The Montreal Carbon Pledge
• Climate 100+
• Task Force on Climate-related Financial Disclosures (TCFD)
• UN Global Compact
• UN PRI
• World Economic Forum

The Group is also a member of the World Economic Forum Alliance of CEO Climate Leaders. In this context, our Group CEO signed the open letter from 50 CEOs who preside companies with a total of USD 1.3 trillion in revenues in 2017. This letter was released ahead of the 24th Conference of the Parties to the UN Framework Convention on Climate Change (UNFCCC) in November 2018.

LGT has been a participant of the UN Global Compact (UN GC) since December 2012, through which we have signed up to the UN GC Ten Principles with respect to human rights, labour, environment and anti-corruption.

Literature

• LGT Website
• LGT Sustainable Portfolio Service
• Sustainable Investing

Last amended: 31/01/24 06:57