We employ external fund managers to manage the majority of our investments. To ensure that external managers are fulfilling our fiduciary duty, we integrate responsible investment parameters into the selection, appointment and monitoring processes including:
• Selection – When looking to appoint new external fund managers, we assess their approach to Responsible Investment (RI) to ensure that they incorporate ESG risks into their systematic investment decision making process.
• Appointment – ESG reporting requirements are included in new investment management agreements with external fund managers.
• Monitoring – We monitor our investment portfolios to measure ESG and carbon performance and to ensure that our managers are adhering to the LGS SRI Policy. LGS monitors compliance of the Restriction Lists (negative screening) through our custodian, JPM. LGS developed proprietary methodology to monitor managers and portfolios across all asset classes. This ratings system refers to ESG integration which we correlate with investment return over time.
in 2020, LGS will consider the measurement of impact within investments cycling through each asset class in line with Investment Committee Reviews.