Big business needs to change. Here’s how we’re making that happen.

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Personal Investing

22 April 2020

2019 was a huge year for our work on changing companies for the better. Here’s a quick look at the decisive action we’re taking on behalf of customers to tackle issues as diverse as climate change and income inequality.

We are living through a period of change with few precedents in living memory. While some of the rapid technological, social and environmental shifts underway are clearly positive, others pose real challenges. And we believe that our industry has a responsibility to do much more to address them.

Our work on this is turning Legal & General Group’s vision of inclusive capitalism – where the benefits of economic growth are broadly shared – into a reality. That means working with companies, and at times putting pressure on them, to better serve their employees, society and you, their investors.

“From climate protesters in the streets to controversial executive pensions in the boardroom, 2019 has shown that our areas of focus remain more relevant than ever. We will continue to take decisive action on the issues that matter to our clients and society” Sacha Sadan, Director of Investment Stewardship

Here are some of the key areas where we focused our efforts throughout 2019:

Climate change

  • LGIM supported more shareholder votes on climate change than any of the world’s 20 largest investment managers[1]
  • We published our second annual ranking of climate leaders and those which are failing to tackle the climate emergency. We named and shamed 11 companies that have not demonstrated sufficient action, including ExxonMobil
  • Through a strategic partnership with a leading consultancy, we constructed a model to look at scenarios for how the energy and climate system may evolve over the next 30 years – and what that would mean for your investments

Diversity

  • We worked to improve gender diversity at 19 Japanese companies
  • 51 of the 72 US companies we targeted for engagement over the past three years have now appointed at least one woman to their board
  • We did not support the re-election of over 190 directors at companies globally due to concerns over board diversity

Income inequality

  • We opposed 35% of pay packages for board directors and executives for being unfair compared to the rest of their employees
  • In 2020, we’ll take action against companies where the pensions of newly appointed executive directors to the board are not aligned with those of their workforce
  • From executive pay to the Living Wage, we will continue to look for ways to address this major societal issue as investors

This work all forms part of our approach to the responsible investment of your savings. By helping companies avoid the major risks that come with an issue like climate change, they have a better chance of being successful in the long term and delivering a positive return on your investment.

We also look for the investment opportunities through our analysis of environmental, social and governance factors (ESG). Click here to find out more about ESG and sustainable investing

Remember, the value of your investments can go down as well as up and you may get back less than you originally invested.

[1] Source: ShareAction – Voting Matters (2019).

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Please remember the value of your investment and any income from it may fall as well as rise and is not guaranteed. You may get back less than you invest.

Please note the information, data and any references in this article were accurate at the time of writing. Please check the date of the content if you’re looking for up to date investment commentary or tax-year related information.

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