Climate change remains top priority at LGIM as it piles pressure on boards
Legal & General Investment Management (LGIM) increased its company engagements last year amid the pandemic and the looming threat of climate change, it said today.
The asset manager’s Active Ownership report published today reveals engagements jumped 21 per cent and LGIM opposed the election of more than 4,700 company directors.
There was a significant increase in climate change related engagements, up 63 per cent year-on-year to 407.
LGIM launched a new climate risk framework which it said helps to “quantify the physical and transitional risks” within portfolios.
“There is a pressing need to build climate resilience in the financial system, a process already underway at LGIM, not least through our net zero targets. ESG must be integrated and impact considered alongside the traditional metrics of risk and return,” chief investment officer Sonja Laud.
“Our framework for responsible investing is based on stewardship with impact and active research across our different asset classes. This enables early identification of potential risks that threaten sustainability of returns.”
The investment manager also pushed forward with diversity issues, opposing 55 directors in the UK over what it considered low levels of board diversity.
LGIM voted against 10 Japanese companies including Olympus, Central Japan Railway and Kubota for failing to have a woman on the board.
“ There is a growing acceptance that more diverse organisations make better strategic decisions, show superior growth and innovations, and exhibit lower risk,” Sacha Sadan, director of investment stewardship said. “We are already seeing the positive results of our engagement on ethnic diversity at a board level and we hope to look back at 2020 as the start of a step change on this issue.”