Active Ownership
How we engaged globally to deliver positive change in 2023
Active ownership: aiming to deliver real-world outcomes
Our Active Ownership report details how our Investment Stewardship and Investment teams exercised voting rights across our entire book and engaged with companies, policymakers and other stakeholders with an aim to deliver positive change on topics including deforestation, income inequality, human rights and artificial intelligence.
Listen to the podcast
Read the blog
Watch the video
For LGIM, active ownership means engaging with companies, industry peers and policymakers to tackle systemic issues and create sustainable value for our clients. In doing so, we seek to realise Legal & General Group’s (Legal & General) vision of the benefits of economic growth being shared as broadly as possible.
We recognise that change is a journey that is typically delivered in steps, not leaps. We believe that constructive engagement with companies and policymakers is the best way to deliver this long-term, systemic change. Indeed, we celebrate those that take action to improve ESG outcomes.
But those that do not engage, or take heed of our drive for minimum standards, will find that we will use the range of stewardship tools to influence a better ESG outcome. These include voting against specific resolutions at these companies or, as a last resort, withholding investment while continuing to engage. That’s because we believe divestment is a blunt and often ineffective tool, which can result in investors overlooking the problem they are trying to solve.
2023 highlights
E – engaging for change on climate
We continued to hold directors to account for their management of climate risk: more than 340 companies were identified as subject to potential voting sanctions for not meeting our minimum standards, two companies were excluded from select funds and one was reinstated.
Our Climate Impact Pledge covers 5,000+ companies across 20 ‘climate-critical’ sectors. More than 100 companies are now subject to deep engagement; these are companies we believe can be ‘dial-movers’ on climate action in their sectors, given their size and potential to galvanise action.
In 2023, we updated our Deforestation Policy and engaged with over 160 companies on the topic. This was the first year we applied specific deforestation vote sanctions. We were also involved in multiple engagements with the UK’s key water companies, their major shareholders and industry regulators.
S – shining a spotlight on social issues
We placed 243 votes on social issues globally.
In 2023, we completed our expanded engagement campaign on ethnic diversity.
We started a focused engagement campaign with a clear escalation strategy to get 15 global food retailers to reduce income inequality within their operations and supply chains.
In December 2023, we published our first Human Rights Policy.
G – guiding companies towards good governance
Globally, we opposed 52% of all pay-related proposals in 2023 due to the companies not meeting our minimum standards for fair and appropriate long-term performance-based pay.
In 2023, we applied 265 votes against US companies with dual-class share structures.
We published our expectations of companies on AI under our Digitisation ‘super theme’, engaging with the four largest US tech firms which are building AI systems as products.
Key documents
Active ownership
How we engaged globally to deliver positive change in 2023
Past annual reports
Quarterly Impact Reports: A summary of our stewardship actions and impact.
Get in touch
Get in touch
If you would like any further information please complete the contact us form.
1. Data as at 31 December 2023. This comprised 2,021 engagements in the environmental category, 354 in social, 561 in governance and 123 in other areas.
2. Data as at 31 December 2023. L&G across all assets under management. Voting data in the Voting statistics by region section of the report represents all votes cast by L&G in each fund in line with our Corporate Governance & Responsible Investment Policy in the 12-month period to 31 December 2023.
Key risks
The value of any investment and any income taken from it is not guaranteed and can go down as well as up, and investors may get back less than the amount originally invested. The risks associated with each fund or investment strategy should be read and understood before making any investment decisions. Further information on the risks of investing is available from L&G's Fund Centres.
While L&G has integrated Environmental, Social, and Governance (ESG) considerations into its investment decision-making and stewardship practices, this does not guarantee the achievement of responsible investing goals within funds that do not include specific ESG goals within their objectives.