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LGIM targets ESG property fund at DC schemes

LGIM sustainable property fundLegal & General Investment Management (LGIM) has launched a sustainable property fund in response to “growing demand from DC schemes to align with members’ ESG values”.

The LGIM Sustainable DC Property Fund reshapes an existing property portfolio to include responsible investing as a core target. ESG objectives include a net zero operational carbon target by 2030. 

LGIM also said the fund has already taken actions to deliver measurable progress on ESG with a focus on explicitly reducing operational energy consumption. It has also commissioned an estimate of social value created by the fund in order to measure future social impact. 

This is already influencing occupier engagement and occupiers are also being screened based on ESG exclusion criteria.

Michael Barrie, director of fund management for LGIM Real Assets, said: “Real estate is central in the transition to net zero as buildings play a major role in supporting a low-carbon economy and society. The demand for real assets is growing, three quarters of our recent major investment consultant conversations in DC distribution have emphasised demand for them.

“We believe that protecting and enhancing real assets against the effects of climate change will create long-term value and performance.”

Veronica Humble, head of DC investments for LGIM, said internal research showed that DC members “care deeply” about ensuring that their pensions are invested in a responsible manner.

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