Legal & General Investment Management (LGIM) has launched the L&G Net Zero Global Corporate Bond Fund, targeting institutional investors and wealth managers across the UK and Europe.
With a goal of reaching net zero emissions by 2050, the Fund seeks to identify long-term financial alpha across a widely diversified global credit universe. It also seeks to improve portfolio temperature alignment through decarbonization objectives and improve long-term results through engagement with the companies in the portfolio.
The Fund adopts a progressive strategy to reducing carbon emissions intensity, known as the fund’s “pathway” to net zero, by measuring the climate risk embedded in the portfolio and its climate alignment. Co-managers Matthew Rees and Enda Mulry are in charge of the Fund.
The Fund also relies on LGIM’s size and influence to influence businesses and policymakers through its “Climate Impact Pledge”, a programme of engagement with the biggest businesses across the sectors recognised as essential to achieving the ambitious Paris Climate Agreement targets.
The Global Research & Engagement Groups (GREGs) of LGIM, which bring the company’s equity, credit, and investment stewardship teams together, serve as the foundation for the Fund’s investment process. The GREGs seek to identify ESG risks that pose a threat to the sustainability of returns and include them into the sectoral and issuer-level credit research process as well as the firm’s engagement initiatives.
Legal & General Investment Management (LGIM) head of global bond strategies Matthew Rees says: “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.”
Legal & General Investment Management (LGIM) head of global fixed income distribution Toby Orpin says: “We are very pleased to bring this investment proposition to the market, which combines our active fixed income expertise and our leadership on Climate and Responsible Investing.
“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.”
