The fund excludes fossil fuels, tobacco, weapons and UN Global Compact violators. It provides sophisticated and diversified exposure to the opportunities arising from the low-carbon energy transition
17 Dec 2020
Legal & General Investment Management (LGIM) has launched a tilted climate transition index equity fund for DB and DC investors.
The FTSE TPI Global (ex Fossil Fuels) Equity Index Fund is based on FTSE Russell’s FTSE Global Equity Index Series. The fund tracks a range of global and diversified securities, weighted according to the risks and opportunities arising from the global transition to a low carbon economy.
The fund constituents are adjusted based on their fossil fuel reserves, carbon emissions and green revenues, as well as on the Transition Pathway Initiative (TPI) analysis of how the world’s largest and most carbon intensive public companies are managing the climate transition. Additionally, the fund excludes fossil fuel, tobacco, controversial weapons and UN Global Compact violators.
The aim of this index fund is to provide sophisticated and diversified exposure to companies that are more aligned to the Paris Agreement and the benefits of the climate transition, while going beyond a narrow focus on carbon emissions and fossil fuel.
The fund has received an initial investment from the Atos UK Pension Schemes and will also be offered as an investment option on the PensionBee platform.
Mark Johnson, Head of Institutional Clients at LGIM: "With the advent of new pensions regulation, demand for index-based solutions that capture the climate transition and the goals of the UN Paris Agreement is set to increase. This fund serves to meet the needs of investors who are looking to reduce or remove their portfolios’ exposure to companies lagging on climate factors as well as other social considerations.
LGIM continues to take its investment stewardship responsibilities seriously and hold companies to account on their progress towards net zero, through our Climate Impact Pledge engagement which leverages TPI data. We engage with the companies we are invested in, to influence and change company and market behaviours with the aim to achieve positive societal impact and long-term value for our investors.
The launch of this fund follows LGIM signing up to the Net Zero Asset Managers initiative. This is part of our commitment to accelerate our work with clients to analyse climate risks and opportunities to help them set and meet decarbonisation goals for their portfolios."
Tegs Harding, trustee of the Atos UK Pension Schemes: "We are pleased to be partnering with Redington and LGIM through the launch of this fund. We are excited for the opportunity to be one of the first investors in the fund. This represents an important step in our ambition to move towards a net zero target by 2035, which is fully aligned with the sponsor’s own net zero ambition. As trustee it is our job to manage the material financial risks in the scheme and there is no doubt that climate change will have a material impact on the portfolio if don’t make changes today. Moving the schemes equities to this fund results in a material reduction in the carbon impact of the schemes holdings on day one but importantly also has a focus on engagement activity which will continue to drive improvements in the way in which companies operate in the future."
Clare Reilly, Chief Engagement Officer at PensionBee: "We are proud that the voices, determination and commitments of our customers have led to the launch of this new fund. If we are truly to engage people with their pensions we need to listen to their voices and offer them investment products that reflect their needs and sentiments. We are pleased to partner today with LGIM to have made that happen with fossil fuel free investing."
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
Past performance is not a guide to the future. 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. For illustrative purposes only. Reference to a particular security is on a historical basis and does not mean that the security is currently held or will be held within an LGIM portfolio. The above information does not constitute a recommendation to buy or sell any security. Views expressed are of LGIM as at 3 January 2023.
IMPORTANT LEGAL NOTICE
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.