Avoiding climate catastrophe has to be our greatest global priority
At Legal & General, our success depends on the sustainability of the societies we rely on, and today, that means using inclusive capitalism to create a decarbonised economy, fairer societies and more responsible business.
On 14 July 2019 the world’s northernmost weather station, at Alert in Canada, just 842km from the North Pole, recorded a temperature of 21•C, 15 degrees higher than the normal average for July.
To limit the warming of our climate to 1.5`C we have 360 months to get to net zero.
Even though our society is living through a global pandemic, we must still work to push down emissions.
As Nigel Wilson, Group CEO wrote: “Avoiding climate catastrophe is our greatest global priority. The debate about whether higher concentrations of greenhouse gases cause global warming is long over. The science is clear and we can see the change with our own eyes. The focus now should be on what we do about it.”
This year Legal & General formally adopted ‘addressing climate change’, as one of our six strategic growth drivers.
We see the multi-trillion investment required in the coming decades as an opportunity, not just a cost.
Our net zero commitment entails investing in clean, green and cheap energy supplies, building back better so our cities are environmentally, socially and economically positive, leading with a commitment to make all our homes operationally net zero by 2030 and addressing issues like housing retrofit.
We see the multi-trillion investment required in the coming decades as an opportunity, not just a cost.
Legal & General also has a strong record in supporting the development of clean energies that can help to meet environmental targets.
We have invested in renewable wind and solar power generation and in innovative technologies to control, manage and store energy.
Our investments include a joint venture with NTR Plc., an Irish renewable energy company, and leading solar and wind generation investor focused on Ireland and the UK, and Oxford PV.
In 2019 Legal & General took a c.13% stake in Pod Point, one of the UK’s largest electric vehicle charge point operators, to support its growth plans and strategy.
In February 2020, Pod Point was acquired by EDF Energy and Legal & General increased its stake from 13% to 23%, creating value for shareholders and forming a landmark partnership with EDF.
Fighting the climate crisis will require trillions of dollars of new investment and the corporate sector must play its proper part and commit to taking action today.
International leadership and collaboration is crucial to the success of decarbonisation; Legal & General is at the heart of the COP26 programme in 2021, with Michelle Scrimgeour (LGIM’s Chief Executive) co-chairing COP26 Business Leaders alongside The Secretary of State for Business, Energy and Industrial Strategy, Rt Hon Alok Sharma MP.
Legal & General is also calling on governments and other stakeholders to create a baseline of ambitious policies upon which businesses can build sustainable strategies.
Fighting the climate crisis will require trillions of dollars of new investment and the corporate sector must play its proper part and commit to taking action today.
LGIM’s Climate Pledge now includes publicly available traffic light ratings for around 1,000 companies - representing 60% of the greenhouse gas emissions from listed companies - a tenfold increase in analysis and coverage, with voting and investment sanctions applied to ‘laggard’ companies.
Our environment, our societies and strong governance of public companies are not ‘nice to haves’, they are all fundamental to a shared, sustainable and progressive way of life.
Over time, LGIM intends to ‘ratchet up’ the stringency of both its standards and sanctions.
ESG is not solely concerned with the natural environment; it is a three-legged stool supported by society and governance as well.
Our environment, our societies and strong governance of public companies are not ‘nice to haves’, they are all fundamental to a shared, sustainable and progressive way of life.
Earlier in October, LGIM’s Active Ownership team started a new engagement campaign that specifically engages FTSE 100 and S&P 500 companies that do not currently have ethnically diverse directors on the board.
From 2022, LGIM will vote against the chair of their nomination committee or the chair of their board if they fail to meet expectations on ethnic diversity.
This kind of long-term engagement is getting results: female representation on FTSE 350 boards is now 30%; 30% of FTSE 100 companies are now cutting executive pensions to align with their workforce; climate change is firmly on the agenda of Boards. Firms like Legal & General must keep working to improve these results”.
As a company coming to its 200th birthday, with ten million customers, £1.2 trillion of assets to manage, and a team of 7,000 working across the globe, we know that our success depends on the sustainability of the societies we rely on, and today, that means using Inclusive Capitalism to create a decarbonised economy, fairer societies and more responsible business.
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