LGIM launches new net zero global corporate bond fund

The Fund seeks to provide improved portfolio alignment through decarbonised objectives and ‘enhanced long term outcomes’ through ‘meaningful engagement’ with the companies in the portfolio

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Legal & General Investment Management (LGIM) has announced the launch of a new corporate fund aiming to deliver net zero carbon emissions and long term returns.

The L&G Net Zero Global Corporate Bond Fund, which is targeting institutional investors and wealth managers across the UK and Europe, also seeks to provide improved portfolio alignment through decarbonised objectives and “enhanced long term outcomes” through “meaningful engagement” with the companies in the portfolio.

Its ultimate goal is to achieve 1.5°C temperature alignment by 2030 and net zero emissions by 2050.

LGIM plans to engage companies and policymakers through its ‘Climate Impact Pledge’, a programme of engagement with the largest firms across the sectors identified as key to meeting the Paris climate targets.

The Fund’s investment is underpinned by LGIM’s Global Research & Engagement Groups (GREGs), which bring the firm’s equity, credit and investment stewardship teams together.

The GREGs aim to identify the ESG risks that threaten sustainability of returns and integrate them into the credit research process at the sector and issuer level, as well as into the firm’s engagement activities.

LGIM Head of Global Bond Strategies Matthew Rees said: “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.”