In the face of looming challenges such as climate change, ageing populations and technological disruption, LGIM believes a different approach to managing capital is required – where responsible investing considerations are placed alongside the traditional metrics of risk and return.
As a result, LGIM seeks to continually assess and engage with companies on ESG criteria. This activity is crucial to identify firms that will survive and thrive amid an acceleration in long-term investment themes such as adapting to the energy transition.
During 2021, LGIM’s Global Research and Engagement Groups (GREGs) continued to devote significant time and resource to tackling emerging ESG issues across a range of sectors. In doing so, they form a crucial input for LGIM portfolio management and the evolution of engagement topics.
This pooling of talent creates a positive feedback loop between LGIM’s investment teams and investment stewardship activities, further boosting ESG integration across LGIM’s index, active and real asset strategies.
Themes covered by the GREGs last year included the race to net zero; the obesity crisis and its impact on healthcare and consumer industries; and banks’ social responsibilities.
Key risk: The value of an investment and any income taken from it is not guaranteed and can go down as well as up, you may not get back the amount you originally invested.