Any information that is market sensitive is withheld andour structure ensures that conflicts of interest between corporate governance and fund management teams are managed. More information on our conflicts of interest policy is shown below:
Sharing information with internal investment managers
LGIM’s corporate governance and investment teams regularly exchange information and specific company insights regularly in the following ways:
- Weekly: Corporate Governance team member joins the Active Fixed Income morning meeting and feeds back relevant engagement insights to the team. CG team member also emails the investment teams with any relevant insights from the weekly Corporate Governance team meeting, in which current engagements are discussed.
- Bi-weekly: Cross-team meeting held between active equities, active fixed income and corporate governance.
- Monthly: Updates from LGIM’s thematic working groups (energy, technology, demographics) shared at the weekly and bi-weekly meeting. Monthly index and corporate governance joint meeting.
- Ad-hoc: Company and sector specific relevant information is shared on an ad-hoc basis between investment teams and Corporate Governance teams, via an internal sharing portal on Bloomberg, or by email.
We share all key outcomes of our engagement meetings with our investment teams using the various processes described above.
Note that we are willing to share any meeting information with our investment teams as long as it is not market sensitive information.
Sharing information with external investment managers
We regularly collaborate with external investment managers on an ad-hoc basis where we think exchange of information would be mutually beneficial. Information shared with external investment managers is left at the discretion of members of the corporate governance team, without disclosing any market sensitive information.
Use of information shared by the corporate governance team
The corporate governance teams works actively with all investment teams at LGIM. Investment decision-makers adopt a different approach to the use of information gained by the corporate governance team in engagement meetings and depending on the asset class of their investments.
Investment decisions are made on company fundamentals, growth momentum and valuations relative to comparable companies. While portfolio managers are ultimately responsible for decisions made regarding the portfolios, they draw on information and insights from other teams, including the LGIM-in-house macro team, the corporate governance team and the Global Trading Team.
While the fund manager of the portfolio is ultimately responsible for all investment decisions made, including ESG factors, the fund manager makes his or her decisions by taking into consideration the views of the credit analysts and the wider fixed income team. The integration of ESG factors is done during fundamental analysis.
In the case of the Future World Fund, ESG factors helped construct the underlying index (carbon reserves and green revenues), to which the Climate Impact Pledge was added as a company engagement (and divestment) overlay.
The corporate governance team are working actively with the index investment teams on new solutions to further integrate ESG into index products