Active ownership: Global engagement to deliver positive change

Over the course of 2021, the pandemic continued to highlight critical environmental, social and governance (ESG) challenges. But other issues were also at the forefront of our thinking, not least the danger of a climate catastrophe and the risks posed by geopolitical crises.

Indeed, the recent conflict in Ukraine underscores the need for investors to take a stand, alongside governments and companies. Russia’s invasion of Ukraine contravened almost every ESG metric. That’s why we reduced our clients’ exposure to Russian securities wherever possible.

This is not a matter of putting principle before profit. It is putting responsibility before reticence, sustainability before silence.

In our 11th annual Active Ownership report, published today, we outline the decisive action we took across a broad range of ESG issues – from healthcare, to income inequality, to climate change.

The report is our second response to requirements under the UK Stewardship Code. It provides what we believe to be a full and fair representation of our stewardship activities and outcomes, complementing our quarterly ESG reports.

Raising standards

I’m immensely proud of LGIM’s achievements as a responsible investor, which I believe demonstrate real leadership on behalf of our clients.

In the report, you’ll see how we exercised voting rights across our entire book and engaged with companies, policymakers and other stakeholders to deliver positive change; for example, our new commitment to tackle deforestation.

You’ll also read about where we were successful in raising standards at individual companies and across markets – and where more work needs to be done.

Our Active Ownership report rightly shines a spotlight on the activity of our Investment Stewardship and Investments teams. But the desire to improve ESG outcomes is deeply held across our entire business, regardless of function: our very purpose at LGIM is to create a better future through responsible investing.

In my own role, I’ve been privileged to demonstrate our commitment to this mission, through my co-chairing of the COP26 Business Leaders Group, membership of the CEO Principals Group of the Glasgow Financial Alliance for Net Zero and involvement in other forums on sustainability issues. That urgent collaboration with our industry peers continues apace.

This work would not be possible without the dedication and passion shown by those whose achievements are documented in the report.

Indeed, looking back on a challenging but also highly productive year, I’m grateful to everyone at LGIM for helping us to take meaningful action on the issues that matter most to our clients, our employees and our communities.