Climate and nature glossary

Our A-Z glossary covers terms around climate change, biodiversity, regulatory instruments and sustainability goals contained within our Climate and nature report.


Anthropogenic greenhouse gas (GHG) emissions

Emissions of GHGs caused by human activities. These activities include the burning of fossil fuels, deforestation, land use and land use changes, livestock production, fertilisation, waste management and industrial processes.

Assets under management (AUM)

Funds that are managed by our fund managers on behalf of investors. AUM represents the total amount of money that investors have entrusted with our fund managers to invest across our investment products.



The variety and variability of life on earth. It helps us tackle climate change, protects us from natural disasters, and delivers us drinking water, oxygen, food and medicine.

Biodiversity net gain

Ensuring the natural environment on any piece of land where development takes place, is in a measurably better state after the development than it was before.

Bio-energy with carbon capture and storage (BECCS)

Applies to a facility where carbon dioxide capture and storage (CCS) technology is derived from any form of bioenergy or its metabolic by-products. Note that depending on the total emissions of the BECCS supply chain, carbon dioxide can be removed from the atmosphere.


Carbon capture and storage (CCS)

A process in which a relatively pure stream of carbon dioxide from industrial and energy-related sources is separated (captured), conditioned, compressed and transported to a storage location for long-term isolation from the atmosphere.

Carbon dioxide equivalent (CO₂e)

Carbon dioxide (CO₂) is the most significant contributor to global anthropogenic GHG emissions, which also include other gases like methane and nitrous oxide. CO₂e is the universal unit of measurement to indicate the global warming potential (GWP) of each GHG, expressed in terms of the GWP of one unit of carbon dioxide. It is used to evaluate different GHGs against a common basis. The equivalent warming of non- CO₂ GHG emissions are measured as tonnes of CO₂e.

Carbon emissions intensity

Carbon emissions intensity is the amount of emissions released per unit of another variable, such as CO₂e per £m. This enables a comparison of the emissions efficiency to be made between different sized operations.

Carbon footprint

Carbon footprint is the amount of emissions as a result of the associated activity.

Carbon offsetting

The process of financing schemes designed to either reduce or remove CO₂ in the atmosphere to compensate for carbon emissions that have occurred elsewhere.

Carbon price

A carbon price is a price applied to CO₂ and other GHG emissions in order to encourage emissions reductions.

Circular economy

An economic system in which the value of products, materials and other resources in the economy are maintained for as long as possible, enhancing their efficient use in production and consumption, thereby reducing the environmental impact of their use and minimising waste and the release of hazardous substances at all stages of their lifecycle. The circular economy aims to decouple economic activity from the consumption of finite resources.

Climate Impact Pledge (CIP)

The CIP is LGIM’s dedicated climate engagement programme. Through the CIP we are committed to helping companies step up on their commitment to net zero, build resilient strategies for this transformative transition period and succeed in the low-carbon world.

Climate pathways

Scenarios that describe pathways to particular climate outcomes.

Climate transition plan

Sets out how an organisation plans to transition to a low-carbon economy. It includes not only its climate commitments, but the roadmap (and associated risks) to achieving them. For a UK-based financial services company, the plan should align with guidance from Glasgow Financial Alliance for Net Zero and the UK Transition Plan Taskforce.

Commodity-driven deforestation

Expanding agriculture is responsible for most of the world’s tropical deforestation. When referring to commodity-driven deforestation, we are focused on agricultural commodities such as palm oil, soy, beef, pulp and paper.

COP 28

The 28th United Nations Conference of the Parties climate change conference, held in Dubai, United Arab Emirates in November 2023.


Ecoservices (or ecosystem services)

The many and varied, direct and indirect, benefits to humans provided by ecosystems.


A dynamic complex of plant, animal and microorganism communities and the non-living environment, interacting as a functional unit.

Energy system

The energy system describes the system for supplying energy services to end users, encompassing the production, conversion, delivery, and use of energy.

Ecoservices (or ecosystem services)

The many and varied, direct and indirect, benefits to humans provided by ecosystems.


A dynamic complex of plant, animal and microorganism communities and the non-living environment, interacting as a functional unit.

Energy system

The energy system describes the system for supplying energy services to end users, encompassing the production, conversion, delivery, and use of energy.


Greenhouse gas (GHG)

Any of the seven gases covered by the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard – carbon dioxide (CO₂), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6) and nitrogen trifluoride (NF3).


Implied temperature alignment

A forward-looking metric that attempts to convey the future trajectory of GHG emissions of a given portfolio in terms of its estimated temperature rise.

International Financial Reporting Standards (IFRS)

The IFRS is a not-for-profit, public interest organisation established to develop globally accepted accounting and sustainability disclosure standards.

Investment portfolio carbon footprint

The investment portfolio carbon footprint related to the funded GHG emissions from an investment portfolio.

Investment portfolio emission intensity

The investment portfolio emission intensity is calculated by weighting the normalised emissions (tonnes of CO₂e emissions per £m normaliser entity value) by the size of our investment and summing up for all the holdings in our investment portfolio.

International Sustainability Standards Board (ISSB)

The ISSB, set up by the IFRS, is responsible for developing standards that will result in a high-quality, comprehensive global baseline of sustainability disclosures focussed on the needs of investors and the financial markets.



Legal & General America Ltd.


Legal & General Assurance Society Ltd.


Legal & General Capital division.


Legal & General Investment Management division.

LGIM Destination@Risk

Our proprietary LGIM Destination@Risk toolkit measures the climate risk embedded in investors’ portfolios and their climate alignment.


Legal & General Retirement Institutional division.

Location-based scope 2 emissions

A location-based method reflects the average emissions intensity of grids on which energy consumption occurs (using mostly grid-average emission factor data).


Market-based scope 2 emissions

A market-based method reflects emissions from directly purchased electricity using supplier specific emissions factors such as renewable energy backed by Renewable Guarantees of Origin certificates.


Natural capital

The stock of renewable and non-renewable natural resources such as plants, animals, air, water, soils and mineral that combine to yield a flow of benefits to people.

Nature-based solutions

Solutions which are actions to protect, sustainably manage and restore natural and modified ecosystems that address societal changes effectively benefiting people and nature.

Nature risk

Nature-related risks are the potential threats posed to L&G that arise from its and wider society’s dependencies and impacts on nature. Beyond climate change, these also include our use of natural resources, our management of water and waste, pollution and our impact on biodiversity.

Net zero

Achieving an overall balance between anthropogenic carbon emissions produced and carbon emissions removed from the atmosphere.

Net Zero Asset Managers Initiative (NZAMi)

Launched in December 2020, an international group of asset managers committed to supporting the goal of net zero GHG emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5°C ; and to supporting investing aligned with net zero emissions by 2050 or sooner.

Net Zero Asset Owner Alliance (NZAOA)

Launched in 2019 to drive industry best-practice amongst institutional investors with the goal of meeting 1.5°C ‘Paris’ agreement.


Operational carbon footprint

The emissions from the operations we directly control, such as: the energy in our occupied offices, the energy from our landlord activities in Real Assets and our housing businesses, as well as the construction of new homes.


‘Paris’ agreement

The Paris Agreement was an agreement within the United Nations Framework Convention on Climate Change effective 4 November 2016. The objective is to limit the increase in average global temperatures to below 2°C, preferably to 1.5°C, compared to pre-industrial levels.

Physical risks

The risks from climate change that arise as a result of more frequent and severe weather events and longer-term shifts in climate.


Legal & General (Portfolio Management Services) Limited. The administrator of the WorkSave Pension and the Legal & General Personal Pension.

Proprietary assets

Proprietary assets are the total investments to which shareholders are directly exposed, minus derivative assets, loans, and cash and cash equivalents.



Legal & General Retail division covers the savings, protection, mortgage and retirement needs of our retail policyholders and workplace members.

Retail Savings

A part of our Retail division and the business area that provides product management and governance support for our retail policyholders in ISA and individual pension products.


Science-based targets (SBTs)

GHG reduction targets that are aligned with what the latest climate science deems necessary to meet the scientific consensus on the scale of reductions needed.

Science Based Targets initiative (SBTi)

The Science Based Targets initiative is a partnership between the Carbon Disclosure Project (CDP), the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF) and works to promote best practice in emissions reductions and net zero targets in line with climate science.

Scope 1 emissions

Direct GHG emissions occurring from sources owned or controlled by the company.

Scope 2 emissions

Indirect GHG emissions from consumption of purchased electricity, heat or steam.

Scope 3 emissions

Indirect emissions not covered in scope 2 that occur in the value chain of the reporting company, including both upstream and downstream emissions. These emissions are a consequence of the activities of the company but occur from sources not owned or controlled by the company.


The responsible oversight of capital that we allocate on behalf of our clients in order to generate sustainable benefits for the economy, the environment and society. It involves engaging with the companies we invest, as well as regulators and policymakers to help tackle systemic issues.



Task Force on Climate-Related Financial Disclosures (TCFD). The Financial Stability Board established the TCFD to develop recommendations for more effective climate-related disclosures.


Tonnes of carbon dioxide equivalent (CO₂e).

Transition risks

The risks from climate change that arise from the process of adjustment towards a low-carbon economy.


Workplace Savings

A part of our Retail division, and the business area that provides product management and governance support for workplace members.