Tackling the climate crisis

Climate and nature: transitioning to a greener future

In 2023, we saw average temperatures reach 1.45°C above pre-industrial levels, making it one of the hottest years on record. The UN Environment Programme forecasts the current trajectory of global warming to be well above the target agreed in Paris and such an outcome would be devastating for ecosystems and hugely disruptive for economies

Legal & General has a duty to help prevent the worst outcomes from climate change: this is fundamental to good risk management on behalf of our customers, clients and shareholders.

There were many highlights in 2023, including: the launch of our Climate transition plan which received 97% approval from shareholders in May; reducing our investment portfolio greenhouse gas emissions intensity by 9% year-on-year; and, we launched our new Clean Power (Europe) Fund alongside our partners NTR, raising €390 million and aiming to invest in Europe’s decarbonisation and energy security.

We also recognised that the Group’s impact on nature is intrinsically linked to climate change, and poses some similar risks and opportunities, as capital is reallocated towards nature-positive outcomes. Our approach to nature will build on our existing climate strategy and, as a result, we’ve renamed our ‘Climate’ report the ‘Climate and nature’ report.


Reduction in investment portfolio economic greenhouse gas emission intensity from our 2019 base year


Environment-specific engagements as an asset manager promoting the net zero transition (approximate figures)


Reduction in our operational footprint (scope 1 and 2 (location)) from our 2021 base year

Developing our approach to nature

Reducing greenhouse gas emissions is a major area of focus for us, but action on climate change must be pursued alongside efforts to halt environmental degradation. We understand there are material interdependencies between climate change and the natural environment as we recognised in our Climate transition plan.

Our work on climate change is currently more developed than our nature-related disclosures, which we are continuing to develop, however there are still many examples of how we are now considering our nature-related impacts and dependencies. In May 2023, our investment business, LGIM, became the cornerstone investor in the largest debt-for-nature swap to date for the Government of Ecuador. In return for restructuring its debt at lower repayment rates, the Ecuadorian government will direct savings of USD 450 million to marine conservation around the Galapagos Islands, which are home to more than 3,000 species, 20% of which are not found anywhere else on Earth.

We are integrating nature into our climate strategy via our three pillar approach:



We are incorporating climate considerations into the way we invest £92.5 billion of proprietary assets. We aim to reduce the intensity of our financed emissions while directing investments towards the climate transition. In 2023, we took action to reduce the greenhouse gas emissions of our investments, achieving a 30% reduction (from a 2019 base year), keeping us ahead of our 2025 interim target.

We continued to invest in early stage and growth equity companies, such as Cambridge Electric Cement, who are pioneering the decarbonisation of cement. We also disclosed our exposure around deforestation and highly nature-dependent sectors, as we develop our knowledge of our impacts and dependencies on nature.


We are using our influence as an asset manager with £1.2 trillion of assets under management (AUM) to promote a 1.5°C net zero transition. As the largest investment manager in the UK, we use our scale to contribute to the transition to a low-carbon and nature-positive economy, through our engagement and through the products we offer.

LGIM engages with governments, companies and policymakers to promote the transition. Through its Climate Impact Pledge, it assess 5,000 companies across 20 climate critical sectors, engaging with those that need to improve their climate performance and, in extreme cases, disinvesting from them if they don’t meet our standards.


The way we operate our business and the businesses we control is critical to the success of our climate strategy. From the offices our people use and the way they travel to work, to the assets we manage and the homes we build, our activities build and shape our carbon footprint and present both challenges and opportunities.

Our housebuilder CALA, for example, has rolled out the use of hydrotreated vegetable oil to all its sites as an alternative to diesel in its construction vehicles and on-site generators. CALA also completed its first concept for a net zero home, using a timber frame, low-carbon bricks, triple glazing and enhanced insulation.

In 2023, our scope 1 and 2 emissions (those related to our operations rather than the activities of the occupiers of our buildings) decreased by 8% (29% from our 2021 base year), due to both energy efficiency measures and changes in our underlying businesses.

The future

We remain committed to our long-term goal of achieving net zero and we are pleased with the progress we made in 2023, but there is still a great deal to be done. We are well placed to support the decarbonisation of the economy and have set ourselves challenging short- and long-term goals.



  • Net zero asset portfolio in line with a 1.5 degree ‘Paris’ objective, from a 2019 base year
  • Net zero greenhouse gas emissions intensity across all our AUM
  • Net zero operational carbon footprint

Dependencies and outlook

Our portfolio transition will be dependent on investee entities delivering on their decarbonisation targets and the availability of attractive assets for investing in the transition, alongside delivery of government policy actions.

The world is not currently on a pathway that will limit global warming to 1.5°C, which increases the risk of us not achieving our commitments.

The lack of reliable, accurate, verifiable, consistent climate and nature-related data continues to make it challenging to accurately disclose and assess opportunities and risks.


    • 2.1°C investment portfolio rating for listed bonds and equities by the end of 20261
    • Reduce our portfolio greenhouse gas emissions intensity by 50%2
    • Phase out investment in coal and oil sands and run off high carbon assets3
    • 70% of eligible AUM to be managed in alignment with net zero4
    • 42% reduction in our absolute scope 1 and 2 greenhouse gas emissions5
    • Our core occupied offices (scope 1 and 2) and business travel to operate at net zero carbon emissions6
    • All new homes will be capable of operating at net zero carbon

      1. On an ‘enterprise value including cash’ emissions-weighted temperature score, covering portfolio scopes 1 and 2.
      2. From a 2019 base year.
      3. Investment with more than 5% revenue exposure by 2030.
      4. Excludes sovereigns and derivative securities until such time as agreed methodologies exist.
      5. To account for the impact of the pandemic our 2021 base year includes estimated emissions data from our Real Assets portfolio based on 2019 data. All other base year emissions are from 2021.
      6. Applies to occupied offices where we actively control the management of utilities.

      Our operational targets and commitments

      We also disclosed our performance against six wider areas of environmental performance.

      Strategic commitment

      We will reduce our energy use in line with our journey to net zero and source energy from renewable sources.


      By 2025, we will purchase 100% of directly procured electricity group-wide from renewable sources.

      We will reduce absolute scope 1 and 2 greenhouse gas emissions by 42% by 2030 from a 2021 base year.

      From 2030, our occupied offices (scope 1 and 2), where we actively control the management of utilities, will operate with net zero carbon emissions.

      Progress in 2023

      Our scope 1 and 2 emissions fell by 29% from our 2021 base year for our science-based target1.

      Our occupied offices generated 2,906 tCO2e.

      We procured 82% of our electricity from renewable sources.

      1. To account for the impact of the pandemic, our 2021 base year includes estimated emissions data from our Real Assets portfolio based on 2019 data. All other base year emissions are from 2021.

      Strategic commitment

      We will use hybrid working practices and technology to actively reduce the business miles we travel in line with our commitment to net zero.


      From 2030, our group-wide business travel will generate net zero greenhouse gas emissions.

      Progress in 2023

      Business travel generated 7,631 tCO2e

      We introduced new controls in our travel booking policy to enable employees to make informed carbon choices when booking travel. We will continue to seek ways to reduce the carbon associated with how we travel for business purposes. We expect our absolute emissions from business travel to increase in 2024, however, as we grow our business.

      Strategic commitment

      We will protect the natural resources we use through the implementation of sustainable procurement principles throughout our supply chain.


      By the end of 2023, we will set a scope 3, category 1 (purchased goods and services) science-based target, aligned with our net zero ambition. This applies to occupied offices where we actively control the management of utilities.

      Progress in 2023

      We set our science-based target for purchased goods and services.

      We engaged with the top 30 suppliers from our supply chain to better understand their carbon footprints and how we can work together to improve efficiencies.

      Strategic commitment

      We will protect and minimise the use of water resources in the spaces we create and occupy.


      From 2022, new Legal & General Capital (LGC) housing developments submitted for outline planning permission will target 110 litres of water per person per day (lpppd), moving to 105 lpppd by 2023, in areas of water stress.

      By 2030, our core occupied offices where we actively control the management of utilities will consume a maximum of 22 lpppd in line with the Real Estate Environmental Benchmark.

      Zero water pollution incidents.

      Progress in 2023

      Zero water pollution incidents reported.

      Our occupied offices where we actively control the management of utilities achieved 33 lpppd (2022: 36 lpppd). Inspired Villages Group exceeded its targets, achieving 100 lpppd. CALA significantly improved its results, achieving 109 lpppd, meeting local planning requirements. CALA has improved the design of new homes and is testing more water-efficient appliances in its Eco Home project aiming to learn lessons to apply across all projects in future.

      Strategic commitment

      We aim to minimise and design out waste through the careful implementation of the principles of the circular economy.


      By 2025, we will divert 100% of waste from landfill in all offices and LGC development projects where we are responsible for waste management.

      By 2025, we will reduce overall waste volumes per core occupied office by 20% from a 2019 base year in offices where we actively control the management of utilities.

      Progress in 2023

      99% of waste diverted from landfill.

       Occupied offices’ waste reduced by 61% from the 2019 base year.

      Strategic commitment

      We are committed to creating diverse and valuable natural spaces and achieving overall net biodiversity gains. We are also committed to understanding and positively shaping the biodiversity impacts of the investments we make.


      In 2023, we will develop our biodiversity strategy, focusing on impacts and opportunities on development sites within our housing and real assets business.

       By 2025, we will report on milestones to reduce agricultural commodity-driven deforestation related to our investments and increase our investment in nature-based solutions. This will be with a focus on palm oil, soy, beef, pulp and paper.

      Progress in 2023

      Our strategic approach to nature and biodiversity was approved by our Group Environmental Committee.

      We have extended the scope of our reporting to include nature and will continue to shape our approach to nature-related risks and opportunities in the coming year.