LGIM tightens climate engagement

Legal and General Investment Management has made a fresh climate pledge that could see it divest from companies that do not meet its standards. Climate ratings for over 1,000 companies in key sectors will be publicly available under a “traffic light” system on LGIM’s website.

Companies identified as falling short of LGIM’s minimum standards – for instance, lacking comprehensive disclosure of emissions or key sustainability certifications – will be subject to a vote against, and potential divestment from, select funds.

In light of the improvements in the availability of climate data and analytics and recognition that achieving net-zero carbon emissions globally by 2050 is the safest path to meet the goals of the Paris Agreement on climate change, LGIM said it was strengthening its climate impact pledge through expanded coverage and focused company and policy engagement around the net zero challenge.

Michelle Scrimgeour, chief executive at LGIM and member of UK Government’s COP26 Business Leaders Group, commented: “As governments around the world are set to announce new and ambitious climate policies ahead of next year’s COP26 conference, investors must also step up. Through our engagement programme renewed to align with the net zero challenge, we want to help steer companies and our clients towards success in a low-carbon world.”