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Legal & General Investment Management (Holdings)

PRI reporting framework 2018

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Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, and how they consider ESG factors and real economy impact.

Our overall responsible investment strategy is based on:

  • Engagement+voting
  • Integration
  • Product development

Our approach to each is determined primarily by the principal of financial materiality. In addition, we consider the values ofclients in integration of ESG into segregated mandates and the development of new products.

We believe that well governed companies that manage all stakeholders, including the environment, are more likely to deliver sustainable long-term returns. We view the consideration of ESG issues as part of risk management, and therefore part of fiduciary duty.

We recognise that companies are intrinsically linked to the economies (and societies) in which they operate and therefore believe that investors have a responsibility to the market as a whole. This belief affects our engagement and voting activity and how we consider both bottom-up and top-down ESG factors.

Framing LGIM's responsible investment and corporate governance commitment is a five-year strategy, and annual goals. Below we outline the three overarching goals of this strategy:

1. Contributions to shifting to a low carbon economy

2. Contributions to making society more resilient with our financial solutions

3. Contributions to creating new investments for the future economy

Our 12-month strategy is reviewed annually, with progress meetings on a six-monthly basis.

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

Our governance and responsible investment policies are based on well-established corporate governance principles, supplemented by the team's expertise and experience.  Our Global Corporate Governance & Responsible Investment policy summarises the overall principles we expect companies to adhere to from an ESG perspective worldwide.  The policy sets out our broad principles on board structure, shareholder rights, remuneration, sustainability including climate change, audit and risk management.  These policies are continually evolving and reviewed regularly to reflect the changing corporate landscape and regional differences. 

Our Global Corporate Governance & Responsible Investment policy is supplemented by region-specific expectations for major developed markets (UK, North America, and Japan) which set out local contexts to the way companies should be governed. 

Supplementing these policies we also have a separate climate change policy, and new separate policy documents providing more detail on LGIM’s approach to engagement, voting and the integration of ESG. 

The Global Corporate Governance & Responsible Investment policy and the additional supplementary policies are approved by the LGIM Board Corporate Governance Committee. Policies are reviewed annually and updated when required.   

Our policies form the starting point for our engagement, voting, integration and product development strategies.  This includes company engagement, as well as forming the basis for engaging with governments, regulators and stakeholders. 

In applying the policies to current and future products, these may differ in application within the individual funds, reflecting the wide range of mandates, asset classes and strategies we offer and manage.  


SG 02. Publicly available RI policy or guidance documents

New selection options have been added to this indicator. Please review your prefilled responses carefully.

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

URL/Attachment

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02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Indicate if your organisation’s investment principles, and overall investment strategy is publicly available

02.4. Additional information [Optional].

Our governance and responsible investment policies are based on well-established corporate governance principles, supplemented by the team's expertise and experience.  Our Global Corporate Governance & Responsible Investment policy summarises the overall principles we expect companies to adhere to from an ESG perspective worldwide.  The policy sets out our broad principles on board structure, shareholder rights, remuneration, sustainability including climate change, audit and risk management.  These policies are continually evolving and reviewed regularly to reflect the changing corporate landscape and regional differences. 

Our Global Corporate Governance & Responsible Investment policy is supplemented by region-specific expectations for major developed markets (UK, North America, and Japan) which set out local contexts to the way companies should be governed. 

Supplementing these policies we also have a separate climate change policy, and new separate policy documents providing more detail on LGIM’s approach to engagement and voting and integrating ESG.  

The Global Corporate Governance & Responsible Investment policy and the additional supplementary policies are approved by the LGIM Board Corporate Governance Committee. Policies are reviewed annually and updated when required.   

Our policies for the starting point for our engagement, voting, integration and product development strategies.  This includes company engagement, as well as forming the basis for engaging with governments, regulators and stakeholders. 

In applying the policies to current and future products, these may differ in application within the individual funds, reflecting the wide range of mandates, asset classes and strategies we offer and manage.  


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

There are a number of potential conflicts of interest inherent in the corporate governance activity at LGIM.  The policy on conflicts of interest is available on our website.

http://documentlibrary.lgim.com/documentlibrary/literature.html?cid=12616&lib=55458

https://www.legalandgeneral.com/_resources/pdfs/investments/conflicts-of-interest.pdf

 

03.3. Additional information. [Optional]

Our policy outlines the procedures in place to prevent, identify, and report conflicts of interest between:

  • LGIM and our clients
  • One client and another
  • Internally between teams at LGIM
  • LGIM and L&G Group plc as the parent company

Such procedures include: annual reviews; reviews of new business activity; training and a culture of treating clients fairly which is embedded into business objectives and employees' personal objectives. 

There are internal procedures established for: cross-trading; order priority; trade allocation; order management and execution; personal account dealing; gifts and benefits in kind. 

There is also a specific conflicts of interest policy in place for the corporate governance team's activities.  The Director of Corporate Governance reports directly to the CEO, and the activities of the Corporate Governance team are also monitored by two independent non-executive directors.


SG 04. Identifying incidents occurring within portfolios (Private)


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