Legal & General Investment Management (LGIM) announced today the launch of the L&G Net Zero Global Corporate Bond Fund, an active strategy that aims to deliver net zero carbon emissions and improved ESG outcomes.
The fund, targeted at UK and European institutional investors and wealth managers, has the ambition to reach 1.5 C temperature alignment by 2030, and net zero emissions by 2050. It also aims to identify long-term financial alpha across a global credit universe and provide improved portfolio temperature alignment through decarbonization objectives.
According to LGIM, the fund adopts a progressive approach to reducing carbon emissions intensity, which includes measuring the climate risk embedded in the portfolio and its climate alignment, as well as drawing on the energy transition scenario insights of LGIM’s climate risk framework. LGIM will also engage with companies identified as key to meeting global climate goals.
Steven de Vries, Head of Wholesale (UK, Europe and Latin America) for LGIM, said:
“Investors are nowadays facing a large number of products offering climate and ESG outcomes. We believe that this fund is unique as it follows a clear pathway to net zero, guided by our proprietary climate framework, and benefits from our engagement with our invested companies and the work from GREGs on raising societal and governance standards.”
Additional ESG features of the fund include alignment of investments with LGIM’s “Future World Protection List” baseline exclusion, which features controversial weapons, UN Global Compact violation, and coal companies, as well as the use of the firm’s UN Sustainable Development Goals (SDGs) scoring process to assess the long-term sustainability of issuers.
Matthew Rees, Head of Global Bond Strategies at LGIM, said:
“In their search for yield, investors are looking to access a well-diversified global credit universe that will provide them with an array of opportunities. At the same time, they want to invest in portfolios that enable them to achieve net zero emissions in line with the Paris Alignment trajectory, as well as reach better ESG outcomes. This fund has been specifically designed to help investors achieve alpha generation, as well as positive climate and wider ESG objectives.”