LGIM introduces sustainable dividend exchange-traded funds on our platform.
In a significant move towards sustainable investing, Legal & General Investment Management (LGIM) has announced the launch of two new index funds: the L&G Quality Equity Dividends ESG Exclusions Europe ex-UK UCITS ETF and the L&G Quality Equity Dividends ESG Exclusions Asia Pacific ex-Japan UCITS ETF.
These funds, which come with a focus on environmental, social, and governance (ESG) factors, are part of LGIM's commitment to investing in companies that align with sustainability objectives consistent with the EU Sustainable Finance Disclosure Regulation (SFDR) Article 9 classification.
The European fund, L&G Quality Equity Dividends ESG Exclusions Europe ex-UK UCITS ETF, focuses on European equities excluding the United Kingdom, while the Asia-Pacific focused fund, L&G Quality Equity Dividends ESG Exclusions Asia Pacific ex-Japan UCITS ETF, targets the Asia-Pacific region. Both funds have been classified under Article 8 of the EU's Sustainable Finance Disclosure Regulation (SFDR).
Howie Li, LGIM's ETF head, commented on the selection process for the ETFs, stating that the funds offer a strong proposition for investors seeking quality yields. The selection process includes a rigorous series of quantitative screenings for quality metrics and dividend characteristics.
The funds employ filters for quality, dividends, and sustainability in their investment strategies. Regarding dividends, the ETFs focus on companies that consistently and preferably increase their payouts. In terms of sustainability, all companies that pose high risks are excluded.
The ESG approach for these funds incorporates specific criteria focusing on financially material environmental, social, and governance factors. Environmental criteria address climate transition risks, sustainable resource use, and environmental impact aligned with long-term sustainability objectives. Social criteria emphasise issues such as diversity, equity, inclusion, and responsible employment practices. Governance criteria include oversight of business ethics, cybersecurity, product governance, and transparency measures, with 30% of executive bonuses linked to ESG performance indicators.
While specific quantitative criteria for the equity dividend funds are not fully detailed, their ESG methodology focuses on screening companies on ESG risks and opportunities, prioritising those with positive ESG impact aligned with sustainable development goals, monitoring corporate governance and executive incentives tied to ESG outcomes, and engaging with companies to improve ESG practices and transparency.
It is worth noting that publicly available, fund-specific ESG screening metrics for these funds are not explicitly itemized in the search results. For exact ESG criteria details, LGIM's official fund documentation or prospectuses would provide the most precise source.
These new funds mark a significant step forward in LGIM's commitment to sustainable investing, offering investors a chance to support companies that prioritise ESG factors while seeking quality yields.
Other funds from Legal & General Investment Management (LGIM), such as the L&G Quality Equity Dividends ESG Exclusions Technology UCITS ETF, might also be focused on investing in technology companies that align with sustainability objectives, given the broad scope of LGIM's commitment to sustainable investing.
Investors seeking a diverse portfolio that balances technology investments with an emphasis on ESG factors could consider investigating the L&G Quality Equity Dividends ESG Exclusions Technology UCITS ETF, as it may follow a similar ESG approach to the existing funds launched by LGIM.
