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LGIM Highlights Climate, Biodiversity Engagements, Targets Systemic Risks

Legal & General Investment Management’s (LGIM) new ‘Active Ownership’ report has outlined its climate and biodiversity engagement focus in 2022, with the UK asset manager prioritising six themes in 2023. The report revealed that LGIM voted at over 15,750 meetings and cast more than 171,000 votes last year on issues including climate change, biodiversity, health, board diversity and living wages for workers. The asset manager also supported shareholder proposals related to antimicrobial resistance. LGIM engaged with eight companies with a lack of board-level ethnic diversity and voted against one company. LGIM voted against 70 FTSE 100 and S&P 500 companies for having all-male executive committees. “As long-term stewards of our clients’ capital, it is our responsibility to engage with investee companies on critical issues and drive a corporate agenda that facilitates sustainable markets and economic prosperity,” said Michelle Scrimgeour, CEO of LGIM. In 2023, LGIM will prioritise engagement on six themes: people, nature, health, technology, governance and climate. Last year, it voted on 99 climate-related shareholder proposals and identified 80 companies as subject to potential voting sanctions for not meeting its minimum standards under the Climate Impact Pledge. Over 100 companies were identified as subject to voting sanctions for failing to have a deforestation policy or programme in place. Michael Marks, Head of Investment Stewardship at LGIM, said: “We are fast approaching the point of no return when it comes to climate change, and the window to prevent significant and irreparable damage to the planet is rapidly diminishing.” In 2023, LGIM will broaden its engagement to smaller companies to ensure ethnic diversity at board level, engaging with laggards within the FTSE. Voting sanctions will be applied again in 2023 if diversity at board-level is not improved.

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