Disclaimer: Views in this blog do not promote, and are not directly connected to any Legal & General Investment Management (LGIM) product or service. Views are from a range of LGIM investment professionals and do not necessarily reflect the views of LGIM. For investment professionals only.

Responsible investing in an age of uncertainty

Active ownership means striving to create sustainable value for our clients.

 

Last year will doubtless remain etched in our memories, for both the sudden darkness it cast over us and the enduring light of human resilience it kindled. I am deeply proud of LGIM’s response to the manifold challenges that emerged, or were intensified, and with which we are still contending.

In our tenth annual Active Ownership report, published today, we outline the decisive action we took on behalf of our clients across a range of environmental, social and governance (ESG) issues, with a particular focus on the near-term dangers posed by COVID-19 and the longer-term threat of climate change.

Throughout the report, you will see examples of where we were successful – often in collaboration with our industry peers – in raising standards at individual companies and across entire markets. You will also read about where more needs to be done.

In addition, we detail how we have exercised voting rights on key issues from diversity to income inequality, and enhanced our framework for responsible investing to strengthen long-term returns for clients.

We welcome the growing regulatory focus on ESG themes. As a result, for the first time, the report is aimed at meeting the requirements of the UK Stewardship Code and also responds to the Task Force on Climate-related Financial Disclosures (TCFD).

A better future

The pandemic has disrupted our lives in numerous and profound ways; it has also underscored the importance of tackling looming threats – like that of a climate catastrophe – before it is too late. But we were already living in a period of flux even before COVID-19, due to dramatic shifts in technology, politics, demography and the environment.

We believe asset managers have a crucial role to play in tackling the challenges presented by this era of uncertainty, many of which have been heightened by the coronavirus. Participating in forums like the COP26 Business Leaders Group, ahead of the pivotal climate conference in Glasgow later this year, has emphasised to me the necessity of action – and the obstacles to it.

Indeed, through our active engagement with companies, we seek to effect positive change in the businesses in which we invest and for society as a whole, in line with L&G Group’s vision of inclusive capitalism. In doing so, we are fulfilling our very purpose at LGIM: to create a better future through responsible investing.

As I look back on an extraordinary year, I am truly grateful to our Investment Stewardship team, alongside colleagues across LGIM, for the determination and passion they have demonstrated on behalf of our clients and the communities in which they live.

Our 2020 Active Ownership report contains further detail on our approach to responsible investing and additional case studies.

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