Press releases
Legal & General Mastertrust ahead of schedule on net-zero goals with first TCFD Report
Report details progress on commitment to achieve net-zero across auto-enrolment default investment options by 2050.
10 Nov 2022
Legal & General has published its first Task Force on Climate-related Financial Disclosures (TCFD) Report for the Legal & General WorkSave Mastertrust, with positive progress made towards delivering net-zero alignment across the Mastertrust’s default funds by 2050.
The report outlines meaningful carbon footprint reduction across the Mastertrust’s standard auto-enrolment default funds. From 31 December 2019[1] to 31 December 2021, the Mastertrust’s Target Date Fund ‘growth phase’ reduced its carbon footprint by more than 50%, along with a 25% reduction across the Future World Multi-Asset Fund and a 23% reduction across the Multi-Asset Fund.
As at the end of 2021, the Target Date Fund ‘approaching retirement’ and ‘retirement’ phases achieved reductions in carbon footprint of 46% and 39% respectively. The Retirement Income Multi-Asset Fund (RIMA), which forms the end of the default drawdown lifestyle, achieved a 23% reduction.
In addition to these figures, the report outlines the further actions taken across the Legal & General Mastertrust to address the material financial risks posed by climate change and take advantage of opportunities in the climate transition, with progress including:
- The integration of climate risk and opportunity into the Mastertrust’s risk and governance framework to ensure the successful identification, assessment and management of climate risk and opportunity within LGIM’s investment decision making.
- The completion of a scenario analysis of popular strategies across three global warming scenarios:
- Limiting Global warming to 1.5 degrees C, reflecting an immediate, highly ambitious action to address climate change;
- Limiting Global Warming to well-below 2 degrees C, reflecting an immediate ambitious investment action;
- Limiting Global Warming to well-below 2 degrees C, but reflecting delayed and disorderly action with much more disruptive change.
- Identifying and reporting on four key climate metrics - total carbon emissions, carbon footprint, temperature alignment and climate engagement - noting any gaps in data coverage.
Taken together, these actions aim to deliver on the Board of Trustees’ roadmap for net-zero by 2050, which sets interim targets for the reduction of the carbon emissions intensity across the Mastertrust’s default funds.
This year’s TCFD report covers the reporting period from 1 October 2021 to 5 April 2022, reflecting the date at which the Occupational Pension Schemes Climate Change Governance Reporting Regulations 2021 introduced new reporting requirements in line with the TCFD recommendations to the Mastertrust’s year end. Going forward, the Trustees of the Mastertrust will publish this report annually, updating members on Mastertrust’s pathway to net-zero.
The L&G WorkSave Mastertrust is one of the largest authorised master trusts in the UK market, looking after the retirement savings of 1.64 million members.[2]
Dermot Courtier, Chair of the Legal & General WorkSave Mastertrust: "Climate change is one of the world’s most significant challenges and addressing it is a key responsibility for this generation. Scientific evidence indicates that we need to act now to reduce carbon emissions to avoid disastrous consequences for our environment, our society, and our economies.We consider that climate change represents a material financial risk to the Mastertrust as it has the potential to disrupt economic, financial, and social systems. The Trustees are committed to assessing these risks across the short, medium and long-term horizons, managing and monitoring them for the benefit of members – as well as embracing the investment opportunities that the climate transition represents."
[1] 31 December 2019 is the recommended baseline date according to the U.N.-Convened Net-Zero Asset Owner Alliance Inaugural 2025 Target Setting Protocol (p. 9).
[2] Figure as at 1 November 2022
Further information
Andrew Gates
Senior PR Manager
Legal & General Investment Management
T: +44 (0)20 3124 4363
Notes to editors
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 a third is international. We also provide powerful asset origination capabilities. Together, these 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. Through inclusive capitalism, we aim to build a better society by investing in long-term assets that benefit everyone.
*at 31 Dec 2022
Legal & General Investment Management
Legal & General Investment Management is one of Europe’s largest asset managers and a major global investor, with total assets under management of £1.29 trillion1. 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.
1Globally, we manage assets of £1.42 trillion or CHF 1.75 trillion as at 31 December 2021 (source: LGIM internal data as at 31 December 2021). The 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.
*at 11 Jan 2023
KEY RISKS
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In the European Economic Area, it is issued by LGIM Managers (Europe) Limited, authorised by the Central Bank of Ireland as a UCITS management company (pursuant to European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 (S.I. No. 352 of 2011), as amended) and as an alternative investment fund manager with "top up" permissions which enable the firm to carry out certain additional MiFID investment services (pursuant to the European Union (Alternative Investment Fund Managers) Regulations 2013 (S.I. No. 257 of 2013), as amended). Registered in Ireland with the Companies Registration Office (No. 609677). Registered Office: 70 Sir John Rogerson's Quay, Dublin, 2, Ireland. Regulated by the Central Bank of Ireland (No. C173733).
LGIM Managers (Europe) Limited operates a branch network in the European Economic Area, which is subject to supervision by the Central Bank of Ireland. In Italy, the branch office of LGIM Managers (Europe) Limited is subject to limited supervision by the Commissione Nazionale per le società e la Borsa ("CONSOB") and is registered with Banca d'Italia (no. 23978.0) with registered office at Piazza della Repubblica 3, 20121 Milan, (Companies' Register no. MI - 2557936). In Germany, the branch office of LGIM Managers (Europe) Limited is subject to limited supervision by the German Federal Financial Supervisory Authority ("BaFin"). In the Netherlands, the branch office of LGIM Managers (Europe) Limited is subject to limited supervision by the Dutch Authority for the Financial Markets ("AFM") and it is included in the register held by the AFM and registered with the trade register of the Chamber of Commerce under number 74481231.Details about the full extent of our relevant authorisations and permissions are available from us upon request. For further information on our products (including the product prospectuses), please visit our website.