Read the trustees` climate change policies and how they plan to manage climate-related investment risks and opportunities that impact your pension plan. LGR and LGIM strive to efficiently process available ESG data to identify, measure and manage key risk factors for our investments and integrate these assessments into the investment process. We measure and mitigate the ESG risks in our portfolio, both at the individual and portfolio levels. We believe our investments should have good governance structures, make a positive contribution to society and minimise negative impacts on wider stakeholders. After years of relative obscurity, the investment value of measuring a company`s response to social problems is increasingly recognized. We advocate for an investment-led recovery with a greener approach to the built environment and efforts to grow climate-friendly businesses. At the same time, we need to manage risk and ensure the resilience of our business and investments. We are using our influence as a major investor to lead the transition to a low-carbon economy. This includes supporting the goal of climate neutrality by 2050, in line with global efforts to limit warming to 1.5°C. We are also engaged in the Target-Based Science Initiative (SBTi).
ESG considerations are now part of Legal & General`s investment policy, which is supported by the fiduciaries. Visit the Hub to learn more about Legal & General`s ESG policies. ⁽²⁾ LGIM, as of December 31, 2021. Assets under management in responsible investment strategies represent only assets under management in client funds or mandates that consciously and positively express ESG criteria, in the fund`s documentation for mutual fund structures or in a client`s investment management agreement. For LGIM, active ownership means working with companies, industry peers and policymakers to solve systemic issues and create sustainable value for our customers. In our 11th annual Active Ownership Report, we outline the key actions we have taken on a wide range of ESG issues, from healthcare to income inequality to climate change. In this way, we transform Legal & General Group`s vision of inclusive capitalism – in which the benefits of economic growth are widely shared – into reality. It is undeniable that investors are generally slow to identify value through a social lens, although LGIM focuses on a variety of social issues, ranging from ethnic and gender diversity to the importance of workers` well-being issues such as income inequality, living wages, and human capital management.1 However, The challenge now probably now lies in companies. Improve investors` perception of their strength in these areas.
This is partly due to a lack of convergence on important S-factors and the need for companies to provide meaningful data on S-topics they deem important to their business. From the perspective of regulatory standards, there is growing optimism that negotiations on a proposed EU social taxonomy, which will rely heavily on internationally agreed values and standards and principles, can serve as a framework for governments, policymakers, businesses and investors. It is important to note that three social goals are proposed that will have a direct positive impact on three main groups: employees, customers and communities. Our sustainability policy describes how we integrate sustainability risks into the investment decision-making process and take into account the significant negative impact of our investments on sustainability factors. Our investment stewardship team works with companies with LGIM`s investment teams to address risks and opportunities specific to the business and the broader market. The team exercises our voting rights globally and holds companies accountable. At the same time, the team works with regulators, policy makers and our colleagues to address systemic issues. At LGIM, we believe that environmental, social and governance (ESG) factors – such as climate change, social inequality and executive compensation – are financially important. We therefore understand responsible investing as the integration of ESG considerations into investment decisions. Active ownership means working with companies, policymakers and other investors to create sustainable value.
You can find out how we achieved this in 2021 in our annual report. This type of conscientious investment has three components: However, we believe that this complexity should not stand in the way of progress. From an investment perspective, a company`s workforce should be considered a key factor in a successful growth strategy. Improving employee culture and well-being often goes hand in hand with increased productivity and operational efficiency, which can help negotiate prices and increase sales through customer interactions, which in turn increases margins. Watch Legal & General`s video on ESG considerations and how they can influence your pension funds` investment strategy. We have developed a sustainability strategy by understanding the complexity of vulnerability trends. We work with «essential friends» from a research and development perspective to provide new products, services and sustainable investments at all stages of a customer`s life. In the second part of this blog, we will explore how different sectors are responding to the growing awareness of «S» themes and the potential investment opportunities we see. A wide range of responsible investment strategies across all asset classes Our Active Ownership Report describes how our investment management and investment teams have exercised voting across our portfolio and worked with companies, policymakers and other stakeholders to drive positive change on issues such as net-zero issuance.
ethnic and gender diversity. Our investment stewardship team works with companies to address risks and opportunities specific to the business and the broader market. The team does this in collaboration with LGIM`s investment teams as part of our global research and engagement platform. First and foremost, trustees have a duty to help protect members` future retirement income. Therefore, given ethical factors, trustees must ensure that their investment strategy for the master trust is not based solely on this.