Fund Name | SRI Style | Product | Region | Asset Type | Launch Date | |
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L&G Future World Global Equity Focus Fund | Sustainability Tilt | SICAV/Offshore* | Global | Equity | 13/07/2018 | |
Fund Size: £69.15m Total screened & themed / SRI assets: £332200.00 Total Responsible Ownership assets: £1195690.00 Total assets under management: £1195690.00 As at: 31/12/22 Contact: fundsales@lgim.com |
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OverviewThe 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.
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FiltersFund informationSustainabilityEnvironmental 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 & EnergyNuclear 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 RightsHuman rights policy Responsible supply chain policy or theme Social / EmploymentSocial policy Health & wellbeing policies or theme Favours companies with strong social policies Ethical Values Led ExclusionsArmaments manufacturers avoided Governance & ManagementGovernance policy UN sanctions exclusion Encourage higher ESG standards through stewardship activity Fund GovernanceESG integration strategy Asset Size & MetricsOver 50% large cap companies Invests in small, mid and large cap companies How The Fund WorksBalances 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 MethodologiesAims 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 & AccreditationsSFDR Article 9 fund / product (EU) Intended Clients & Product OptionsAvailable via an ISA (OEIC only) Fund management company informationAbout The BusinessESG / SRI engagement (AFM company wide) Responsible ownership / stewardship policy or strategy (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) ResourcesIn-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 & AffiliationsPRI 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 AccreditationsPRI A+ rated (AFM company wide) Engagement ApproachRegularly 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 ExclusionsReview(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 TransitionEncourage 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 TransparencyPublish 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) |
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PolicyIn 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. 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.” 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. |
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ProcessWe 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:
Our sell discipline is a key element of our portfolio construction, with sell decisions triggered by:
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Resources, Affiliations & Corporate StrategiesAs 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
Responsible Investing Strategy team
Climate Solutions team
Distribution
Real Assets
Product Development and Strategy
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.
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
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.
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LiteratureLGIM UK Disclaimer and important legal notice The information contained in this document (the ‘Information’) has been prepared by Legal & General Investment Management Limited, Legal and General Assurance (Pensions Management) Limited, LGIM Real Assets (Operator) Limited, Legal & General (Unit Trust Managers) Limited and/or their affiliates (‘Legal & General’, ‘we’ or ‘us’). Such Information is the property and/or confidential information of Legal & General and may not be disclosed by you to any other person without the prior written consent of Legal & General. No party shall have any right of action against Legal & General in relation to the accuracy or completeness of the Information, or any other written or oral information made available in connection with this publication. Any investment advice that we provide to you is based solely on the limited initial information which you have provided to us. No part of this or any other document or presentation provided by us shall be deemed to constitute ‘proper advice’ for the purposes of the Pensions Act 1995 (as amended). Any limited initial advice given relating to professional services will be further discussed and negotiated in order to agree formal investment guidelines which will form part of written contractual terms between the parties. Past performance is no guarantee of future results. The value of an investment and any income taken from it is not guaranteed and can go down as well as up, you may not get back the amount you originally invested. The Information has been produced for use by a professional investor and their advisors only. It should not be distributed without our permission. The risks associated with each fund or investment strategy are set out in this publication, the relevant prospectus or investment management agreement (as applicable) and these should be read and understood before making any investment decisions. A copy of the relevant documentation can be obtained from your Client Relationship Manager. Confidentiality and limitations Unless otherwise agreed by Legal & General in writing, the Information in this document (a) is for information purposes only and we are not soliciting any action based on it, and (b) is not a recommendation to buy or sell securities or pursue a particular investment strategy; and (c) is not investment, legal, regulatory or tax advice. Any trading or investment decisions taken by you should be based on your own analysis and judgment (and/or that of your professional advisors) and not in reliance on us or the Information. To the fullest extent permitted by law, we exclude all representations, warranties, conditions, undertakings and all other terms of any kind, implied by statute or common law, with respect to the Information including (without limitation) any representations as to the quality, suitability, accuracy or completeness of the Information. Any projections, estimates or forecasts included in the Information (a) shall not constitute a guarantee of future events, (b) may not consider or reflect all possible future events or conditions relevant to you (for example, market disruption events); and (c) may be based on assumptions or simplifications that may not be relevant to you. The Information is provided ‘as is' and 'as available’. To the fullest extent permitted by law, Legal & General accepts no liability to you or any other recipient of the Information for any loss, damage or cost arising from, or in connection with, any use or reliance on the Information. Without limiting the generality of the foregoing, Legal & General does not accept any liability for any indirect, special or consequential loss howsoever caused and on any theory or liability, whether in contract or tort (including negligence) or otherwise, even if Legal & General has been advised of the possibility of such loss. Third party data Where this document contains third party data ('Third Party Data’), we cannot guarantee the accuracy, completeness or reliability of such Third Party Data and accept no responsibility or liability whatsoever in respect of such Third Party Data. Publication, amendments and updates We are under no obligation to update or amend the Information or correct any errors in the Information following the date it was delivered to you. Legal & General reserves the right to update this document and/or the Information at any time and without notice. Although the Information contained in this document is believed to be correct as at the time of printing or publication, no assurance can be given to you that this document is complete or accurate in the light of information that may become available after its publication. The Information may not take into account any relevant events, facts or conditions that have occurred after the publication or printing of this document. Telephone recording As required under applicable laws Legal & General will record all telephone and electronic communications and conversations with you that result or may result in the undertaking of transactions in financial instruments on your behalf. Such records will be kept for a period of five years (or up to seven years upon request from the Financial Conduct Authority (or such successor from time to time)) and will be provided to you upon request. Legal & General Investment Management Limited. Registered in England and Wales No. 02091894. Registered Office: One Coleman Street, London, EC2R 5AA. Authorised and regulated by the Financial Conduct Authority, No. 119272. Legal and General Assurance (Pensions Management) Limited. Registered in England and Wales No. 01006112. Registered Office: One Coleman Street, London, EC2R 5AA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, No. 202202. LGIM Real Assets (Operator) Limited. Registered in England and Wales, No. 05522016. Registered Office: One Coleman Street, London, EC2R 5AA. Authorised and regulated by the Financial Conduct Authority, No. 447041.Please note that while LGIM Real Assets (Operator) Limited is regulated by the Financial Conduct Authority, we may conduct certain activities that are unregulated. Legal & General (Unit Trust Managers) Limited. Registered in England and Wales No. 01009418. Registered Office: One Coleman Street, London, EC2R 5AA. Authorised and regulated by the Financial Conduct Authority, No. 119273. .
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;
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/
Last amended: 25/01/24 11:33 |
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