An open letter to UK Government from LGIM’s Head of Sustainability, Head of LGIM Real Assets and CEO of Legal & General Capital
10 Jul 2020
COVID-19 has demonstrated the damage that natural disasters can inflict on economies. The world is currently on a trajectory of more than 2 degrees Celsius temperature rise, regarded as the limit of safety, beyond which the effect of warming on the climate becomes catastrophic and irreversible. Such a scenario would undoubtedly cause economic disruption and human suffering on a scale even greater than the novel Coronavirus pandemic.
Buildings account for over a third of overall UK greenhouse gas emissions today, with heating and hot water constituting 20%. The UK government, which has committed to meeting net-zero emissions by 2050, recently announced a multibillion pound building and infrastructure package to fuel the country’s recovery following the pandemic. This ambition is welcome, particularly the introduction of measures such as the retrofit voucher scheme and investments to improve the energy efficiency of public buildings. But the recovery must be achieved without locking in high-emitting and inefficient buildings for decades to come. As the recovery gets underway, it is crucial that the opportunity to build back better is not lost.
As an investor, house builder and landlord, Legal & General is taking action to play its part in addressing the challenge of reducing emissions from the built environment.
However, in order for private sector actors to meet their net-zero ambitions, the government must urgently clear some of the existing policy barriers, and introduce new regulation to provide a clear direction of travel for the industry. Including:
As the UK looks beyond Covid-19, it is faced with a deep economic recession coupled with a longstanding housing crisis. Whilst government may be focused on its ‘build, build, build’ agenda, it must not lose sight of how this – if not regulated appropriately – will have an irreversible impact on climate change.
Due to the pandemic, global greenhouse gas emissions have hit a sudden plateau, and the world now has unexpected opportunity to continue to bend the curve. The UK’s net-zero target must be placed at the heart of the recovery.
Kerrigan Proctor, CEO
Legal & General Capital
Bill Hughes, Head of LGIM Real Assets
LGIM Real Assets
Head of Sustainability & Responsible Investment Strategy
Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.2 trillion in total assets under management* of which 39% is international. We have a unique and highly synergistic business model, which continues to drive strong returns. Legal & General provides powerful asset origination and management capabilities directly to clients, which also underpin our leading retirement and protection solutions. We are a leading international player in Pension Risk Transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Our purpose is to improve the lives of our customers and create value for our shareholders. Through inclusive capitalism, we are investing in long-term assets, such as real estate and infrastructure, that can help build a better society for the future.
*as at HY 2023
Legal & General Investment Management
LGIM is one of Europe’s largest asset managers and a major global investor, with total assets under management of £1.16 trillion1 ($1.47tn, €1.35tn, CHF 1.31tn). We work with a wide range of global clients, including pension schemes, sovereign wealth funds, fund distributors and retail investors.
For more than 50 years, we have built our business through understanding what matters most to our clients and transforming this insight into valuable, accessible investment products and solutions. We provide investment expertise across the full spectrum of asset classes including fixed income, equities, commercial property, and cash. Our capabilities range from index-tracking and active strategies to liquidity management and liability-based risk management solutions.
1 Data as at 30 June 2023. Data combines assets under management by LGIM in the UK, LGIMA in the US and LGIM Asia in Hong Kong.
Assets under management include securities and derivatives positions
*as at HY 2023