Among the many noteworthy statistics and insights gleaned from Legal & General Investment Management's (LGIM) newly published annual Active Ownership Report is its development last year of a SASB-guided, proprietary ESG materiality matrix that informs its E&S research and engagement, as illustrated here:
LGIM also has a proprietary ESG scoring system sourced from data providers HSBC, Sustainalytics, Refinitiv, and Trucost (most recently reported on here), which is illustrated via the integration into the report of select portfolio company LGIM ESG scores by major category (“E” | “S” | “G”) and topic.
Of 891 total engagements with 665 companies in 2020, 283 were in North America (followed by the UK at 275), with climate change being the #1 engagement topic (globally), followed by compensation, diversity, board composition, and strategy.
In North America specifically, LGIM voted at 656 companies and against management on at least one proposal at 96% of those (629 companies). Director-related "no" votes accounted for the majority of "against" votes, as shown here:
It further voted against 280 directors with combined chair/CEO roles and supported 42 shareholder proposals calling for an independent chair in the North America region. Looking at the US specifically, LGIM voted against five directors based on insufficient board gender diversity.
In September 2020, LGIM engaged 44 S&P 500 companies that lacked apparent ethnic diversity on the board, reportedly receiving responses from 41% of those companies. Of the 41% that responded, some companies agreed with LGIM’s analysis and some did not. LGIM reportedly advised those that disagreed with its analysis to contact ISS "to ensure that accurate data is captured and reported." As previously reported, beginning in 2022, it will vote against board chairs or Nom/Gov Committee chairs of companies without board ethnic diversity.
See LGIM's release and our prior reports: “LGIM Walks its Talk,” “LGIM Targets Board Leadership & Board and Workforce Diversity,” “LGIM Intensifies Climate Stewardship Activities,” and additional information & resources on our Institutional Investors page »LGIM.