LGIM applies a negative screen, excluding companies involved in the manufacture and sale of cluster munitions, antipersonnel landmines, and biological and chemical weapons from all our active equity and fixed income funds.
The decision to exclude these companies was taken due to three principal reasons:
- Firstly, we want to help our clients meet their regulatory obligations; in certain jurisdictions it is illegal to invest in the debt and equity of these companies.
- Secondly, in many more jurisdictions it is illegal to use these weapons; therefore as a responsible investor we do not want to be financing them.
- Thirdly, the market for such weapons is very limited and involvement in it brings reputational risk. We therefore believe it makes business and investment sense for companies to reconsider their involvement.
Our exclusion list was developed with a third-party service provider. Public, private and state-owned companies are excluded on the following basis:
- The company is involved in the core weapons system, or components/services of the core weapons system, considered tailor-made and essential for lethal use
- The company is involved in the production, maintenance/service, or R&D of the core weapons system
Please see our Controversial Weapons policy for more information: http://documentlibrary.lgim.com/documentlibrary/literature.html?cid=64550&lib=55458