15 Mar 2019
Taking action to limit climate change
Climate change is a vitally important concern for Legal & General and we know that in the future it can have a devastating impact on our customers, employees and shareholders. However, we believe that we all have a narrow window of opportunity to take action to halt the worrying predicted rise in global temperatures.
The science behind climate change is well developed and the link between greenhouse gas emissions and increasing temperatures is clear and generally accepted. The global average temperature has already risen by 1°C since the pre-industrial era and is expected to continue to increase over this century.
According to the Intergovernmental Panel on Climate Change (IPCC) even 2°C of warming above pre-industrial levels would mean catastrophic flooding, drought and associated mass-migration, food scarcity and large scale loss of biodiversity and overall worsening living conditions.
We strongly support the aim of the Paris Agreement of limiting global temperatures to well below 2°C above pre-industrial levels. That means supporting the transition to a low-carbon economy, which has been one of our strategic priorities since 2017.
Legal & General can make a difference to climate change because of our scale and influence. Legal & General Investment Management are one of Europe’s biggest investment management companies with stakes in companies across the globe and in every sector. LGIM have the ability to change the decisions made by the Boards of the companies we invest, taking a strong position on integrating climate strategy into its investment process and product range across all assets and clients.
Legal & General group are also a major investor, looking after assets which fund the pensions of over one million people as well as managing our own shareholder funds. In running our businesses we need to ensure that our own carbon footprint reduces in size and that all our businesses operate in a sustainable way.
Because LGIM are signatories to the Task force on Carbon related Financial Disclosures we have published two reports describing our activities on managing climate change.
You can download these reports from this page on our corporate social responsibility site, but please don’t print them.
Our reports describe how climate change can affect our businesses, For example, weather-related damages can increase future insurance claims as well as reducing the valuations of our investment portfolios, especially property.
However our reports describe how we can also help people to move to a lifestyle with lower levels of carbon consumption. We have set a target to develop low carbon, energy efficient homes in our housing businesses. We’ve included solar PV, solar thermal, air source heating and shower save into the construction of 462 of our CALA Homes properties. This approach builds in energy demand reduction to the lifetime of the buildings, delivering long term carbon reductions and homes that are cheaper to run.
The report describes how we also invest in renewable energy, especially wind power. In many markets onshore wind is the lowest cost way to generate renewable power and we own a 25% share in NTR Asset Management Europe, a clean energy asset manager. We have also invested in much offshore wind farm projects, providing enough power to service over 2 million homes.
Read the full report via the link below