How we engaged globally to deliver positive change in 2023
Active ownership: aiming to deliver real-world outcomes
Our Active Ownership report details how our Investment Stewardship and Investment teams exercised voting rights across our entire book and engaged with companies, policymakers and other stakeholders with an aim to deliver positive change on topics including deforestation, income inequality, human rights and artificial intelligence.
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What is active ownership?
Responsible investing at LGIM
We see responsible investing as the incorporation of ESG considerations into investment decisions, alongside engagement with companies, regulators and policymakers, that aims to generate sustainable outcomes.
We are a ‘universal owner’ on behalf of our clients, holding a slice of the global economy. As a result, we believe:
01
Responsible investing is essential...
…in seeking to improve long-term returns, unearth potential opportunities and aims to mitigate risks by fostering sustainable markets and economies
02
When we allocate capital…
…we conduct extensive research into potential environmental and societal outcomes across our Active and Real Assets investment strategies and, as directed by customers, many of our Index strategies
03
ESG factors are financially material...
…albeit not all to the same degree. And patience is required, because the time horizons of ESG outcomes and investment returns are not always aligned
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1. Data as at 31 December 2023. This comprised 2,021 engagements in the environmental category, 354 in social, 561 in governance and 123 in other areas.
2. Data as at 31 December 2023. LGIM across all assets under management. Voting data in the Voting statistics by region section of the report represents all votes cast by LGIM in each fund in line with our Corporate Governance & Responsible Investment Policy in the 12-month period to 31 December 2023.
*Source: As at 30 June 2024. AUM in responsible investment strategies represents only the AUM from funds or client mandates that feature a deliberate and positive expression of ESG criteria, in the fund documentation for pooled fund structures or in a client’s Investment Management Agreement. LGIM’s total AUM (on the basis of client direct investments and excluding any double count from fund of fund holdings, and including the value of securities and derivatives positions) at this date was CHF1.275 trillion, meaning responsible investment strategies represented approximately 33% of the total.
Key risks
The value of any investment and any income taken from it is not guaranteed and can go down as well as up, and investors may get back less than the amount originally invested. The risks associated with each fund or investment strategy should be read and understood before making any investment decisions. Further information on the risks of investing is available from LGIM’s Fund Centres.
While LGIM has integrated Environmental, Social, and Governance (ESG) considerations into its investment decision-making and stewardship practices, this does not guarantee the achievement of responsible investing goals within funds that do not include specific ESG goals within their objectives.