Tracking ESG progress

Tracking ESG progress

We expect the companies we invest in to adopt ambitious sustainability strategies, treat their employees and suppliers fairly, and implement the robust checks and balances to drive long-term success. Therefore, we have developed proprietary tools to assess ESG performance, which help drive our engagement with companies, and influence our voting and investment decisions.

Our approach draws on decades of stewardship activities to promote best practices, combined with long-term thematic research and the remarkable growth in ESG data in recent years. Our scoring also brings transparency to our assessments – this helps companies identify and tackle gaps in their strategies and their disclosures, thereby contributing to better market outcomes.

Climate Impact Score

Under LGIM’s Climate Impact Pledge, we have focused our engagement on ‘climate-critical’ sectors which we believe are key to meeting the world’s net-zero emissions challenge. We assess the strength of companies’ climate ambitions and their strategic shift, encouraging them to step up, whilst systematically holding companies accountable through voting sanctions and capital allocation.

We do this by using quantitative and qualitative measures. Drawing on independent data providers and our proprietary climate modelling, we have mapped circa 1,000 companies globally in ‘climate-critical’ sectors against key indicators and assessed them under a ‘traffic light’ system. Companies are thus able to verify their progress directly, whilst also encouraging improvements in the accuracy and availability of climate data in the market. We have also produced guidance around net zero challenges and opportunities in each sector.

Open the LGIM Climate Impact Scoring Tool