ESG governance.


why is ethics ever more important to us

During 2012 we undertook a review of our Corporate responsibility governance structure and in line with a change of CEO to Nigel Wilson. We took a number of opinions to understand how we could improve the governance of Corporate responsibility and ethics within our business.

We know that companies are increasingly being judged and valued on their ability to:

  • constantly improve their standard of doing business wherever they operate
  • provide an insight into how they are preparing for the future of their marketplace
  • show how its leadership is grappling with the big societal issues.

We continue to look at how we can directly enable our strategy through proactive management of our environmental social and governance performance.

To help achieve this, we’ve developed five objectives defining our direction for the next three years. In the case of each of these objectives, our business areas will need help and support on the Responsible business agenda. The table below outlines how we are helping to improve their decision making processes.

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2012 – 2014 Strategic Objectives

How the responsible business agenda supports this

Brand and customer

Directly connecting with consumer issues and campaigns that matter in the markets in which we trade.

Organisational capability

Connecting employees to fringe markets through volunteering

UK growth

Through our campaign partners de-risk markets, to help decision makers in the business see markets differently.

Capital management

Reducing our Carbon reduction commitment tax exposure in the UK by being environmentally efficient.

Diversification

Increase overseas transparency, disclosure and interaction across the Group.

To do this we have made a few changes to the way that we govern and integrate responsible business practices into our decision making, and these are detailed below.

Critical review of ethics governance

With a number of interested parties (including BITC, LGIM’s Corporate governance team, CoSec and a number of conversations with other FTSE companies) we reviewed our current governance structure in the light of the lessons learned from recent corporate failures.

The result have been some changes to our governance structure.

 The following report to Group Board on an annual basis 

 

 

 

 
 
Legal & General CRE Policy Committee
(Committee of the Group Board)


Looks at ESG Materiality analysis based upon future strategy

Get inputs and insights from the Advisory Board on emerging ESG issues and opportunities to be considered

Sets “Fair Business” Principles

Sets Peer Ethics Review (Processes / products / markets) agenda annually

Attendees (Annually)

Chair: Nigel Wilson with Mark Gregory, John Pollock, Mark Zinkula, Philippa Scott, Geoffrey Timms, John Godfrey, Graham Precey, Andrea Blance and Wadham Downing
 
 

 

Legal & General CRE Delivery Committee

Defines and refines group-wide policies

Implements the targets set by the ESG Policy Board

Identifies emerging ESG during the year that contravene targets or suggest new ones

Delivers peer reviews as set by the ESG Policy Board

Current Attendees (Quarterly)
Chair: John Godfrey
Chris Last – Equalities
Nick Manns - Unite
Alex Wolny – Sustainable Procurement
Sacha Sadan – Corporate Governance
Elaine MacLean – GEC / GH&S
Bill Hughes – Sustainable Property
Sara Heald – Community
Graham Precey – Business Campaigns
Peter Graham – Equalities
Philippa Scott - Ethics

 

 

 

Setting ethical tone in the context of strategy

 

Shaping policy and delivery

We felt that the Ethics committee should be integrated with the Corporate social responsibility committee to heighten its importance in our governance structure.

We also felt that the executive Executive committee (Exco) should play more of an active role in setting the materiality and moral tone for our organisation.

We also felt that it was good governance practice to split the setting of the moral agenda within the Group with the delivery of the yearly ESG targets.

Revised membership of the GCRE committee

The Group board determines membership of this committee. To ensure compliance with the principles of good corporate governance, the membership of this committee is as follows:

  • Nigel Wilson – Group Chief Executive (Chairman)
  • John Godfrey – Director or Public Affairs (Deputy Chairman)
  • Sacha Sadan – Director of Corporate Governance, LGIM
  • Nick Manns – Unite National Officer
  • Elaine Maclean – Group HR Director – Chair of Group Health and Safety Committee
  • Bill Hughes – Managing Director, Legal & General Property – Chair of the Sustainable Property Committee
  • Sara Heald – UK Community Manager
  • Philippa Scott – Director of Risk and Compliance
  • Alex Wolny – Group procurement Director – Chair of Group Environment Committee
  • Graham Precey – Head of CSR and Board Member of Climatewise
  • Peter Graham – Head of Digital

Supporting committees

There are a number of sub committees that operate across the Group to support delivery against objectives. Each of these sub committees have public targets to deliver against:

  • Group Equalities and Diversity committee
  • Group Third Sector Investment committee
  • Sustainable Property committee
  • Group Health and Safety committee
  • Group Environment committee.

Interactions with the rest of our Group

There are a number of interactions that the GCRE committee has with the rest of the Group:

  • The Chairman of the committee will report to the board on any significant issues or corrective actions.
  • The committee's performance is presented to the Board on an annual basis giving our chairman and non-executive directors the chance to engage with our CSR programme at least once a year on a formal basis.
  • The committee is responsible for monitoring and delivering against public targets.
  • The committee are responsible for setting the guiding principles for our business and reporting back to the Chief Risk Officer (CRO) for any implications to the capital risk process.
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