Legal and General Group

The financial institution performs well in various areas, particularly governance, stewardship, carbon footprint tracking and target-setting. On governance, decision-making and oversight for the sustainability strategy are assigned to the highest governance body, with performance criteria for senior executive remuneration linked to specific sustainability targets. Implementation responsibility is also delegated to various functions, teams, or committees within the institution.

With regards to stewardship, it has a comprehensive stewardship policy that supports environmental transitions and social best practices in line with its sustainability strategy. Not only does the stewardship policy cover client and other stakeholder engagement as well as advocacy and partnerships, but it also includes criteria for what is considered a successful stewardship result, escalation routes if unsuccessful and defines when escalations should happen. The institution also transparently identifies and priorities key sectors, clients and investees to engage with on climate issues and nature-related impacts, as well as sectors and areas associated with the highest impact on nature stemming from its provision of products, services and capital. Additionally, it engages in partnerships to influence and support sectors, clients and investees to act on their nature-related impacts. All its stewardship activities and the associated outcomes are published in an engagement report as well.

As for carbon emissions, it monitors its Scope 1-2 emissions, emissions resulting from its associated financing activities (Scope 3 Category 15) and other Scope 3 categories. Further, it has set interim targets for latest 2030 aligned with a 1.5C trajectory, of which it is progressing against. Notably, it has also established a transition plan covering its own operations, supply chain and portfolio.

Regarding human rights, the financial institution has a publicly available policy statement committing it to respect human rights. Furthermore, it discloses a list of the trade associations of which it is a member. As for its financing activities, it transparently discloses the amount and/or share (in monetary terms) of products, services and capital provided to women-owned businesses.

Areas where Legal and General Group has scope for improvement include enhancing its disclosure around its processes for designing an impact materiality strategy, targets and plans, fossil fuel financing, financing activities and risk assessment processes associated with the ILO Fundamental Rights at work. For instance, while it identifies material sustainability impacts across its value chain, it could further detail its process and how objective criteria and/or supportable evidence were considered for the identification and prioritization of impacts. It could also specify if impact targets are covered under its third-party assurance and verification processes.

As for fossil fuels, Legal and General Group discloses some information regarding the amount and/or share (in monetary terms) of its provision of products, services and capital linked to fossil fuel sectors, it could also show that the scope is not limited to certain fuels. It could also extend its time-bound strategy to phase out the provision of products, services and capital to existing fossil fuel projects and clients and investees across the fossil fuel value chain, which lack a well-defined strategy aligned with a 1.5°C trajectory to cover all fossil fuels. As for its financing activities, it is recommended that Legal and General Group discloses the breakdown of clients and/or beneficiaries by income group, as well as its processes for avoiding divestment from low-income and lower-middle countries as unintended consequences of its sustainability strategies and targets.

Finally, it has an opportunity to strengthen its commitment to respect the ILO’s fundamental rights at work by formalising its commitments in a policy document. It is also recommended that Legal and General Group discloses its risk assessment process includes risks associated with the ILO fundamental rights at work for those impacted by its provision of products, services and capital, its process for mitigating such risks when identified, as well as provide an example of the specific conclusions reached and actions taken or to be taken on at least one of its salient human rights issues of it’s the products, services and capital it offers as a result of assessment processes in at least one of its activities in the last three years.

This scorecard refers to information in English which was publicly available by July 15 2024. AuM and Total assets are stated in USD for comparability and have been calculated based on reported local currency values multiplied by applicable IMF currency converter values.