Investor Commitments.


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We commit

Governed by

2011 Proposed External Targets

Performance Commentary and Forecast of Position as at 31/12/2011

RAG Status

To promote responsible ESG (Environmental, Social and Governance) business practices in the companies in which we invest to create long term value for investors.

Group CSR Committee

Company engagement – Engage 200 companies on Environmental, Social and Governance issues (at least 20% of which to include topics on Environment and or Social areas).

LGIM Performed 238 engagements (against a target of 200) of which over 30% covered E and or S topics (82) against a target of 20%.

Achieved

We commit to promote the sustainable management of our investment property portfolio, whatever our mandate, in the belief that enhanced investor returns will be delivered.

Sustainable Property Investment Committee

Energy Efficiency – Continue to seek reductions in energy use focusing on those properties which use most energy and therefore where most impact can be made. About 20 properties account for 80% of energy consumed where a further reduction of 3% below 2010 levels will be our target.

For the top 20 properties where the most is spend on gas and electricity, Q4 shows an 11% reduction in CO2, a saving a total of 1518 Tonnes of CO2 compared to 2010. In general CO2 reductions are due to better management, the introduction of energy efficient technologies and better weather.

Achieved

Waste management – We will seek to eliminate waste direct to landfill wherever LGP is responsible for waste management, targeting the 10 largest waste producing sites to reduce the proportion of waste to landfill by 20% below 2010 levels.

Overall waste has decreased from 2,952 tonnes to 2,650 tonnes, a reduction of 10%. Waste sent direct to Landfill without pre-treatment has been reduced from 788 tonnes to 299 tones, which is a reduction of -62%, which is significantly over the 20% reduction target L&G set.

Achieved

Leadership – Demonstrate leadership in the property industry, advancing the debate and by continuing to contribute to standard setting. Specifically to Chair a leading sustainability organisation and to publish, or present at seminars, four thought leadership papers.

During the year Bill Hughes has been the Chairman of the Green Property Alliance and he has made contributions to a book and to articles on Sustainability in Property. LGP has also commissioned research on the Green expectations of property occupiers and continues to contribute to publications from the better Buildings Partnership

Achieved

Climate change risks – Sustainability will be considered as part of the due diligence undertaken when evaluating the purchase of all new investment property assets. Over 3 years review all assets for climate change risks and develop asset specific strategies.

A sustainability report continues to be a key requirement of the Property Investment Committee when considering any purchase. Asset specific strategies are being prepared to meet the 3 year target. A number of Energy Audits have been commission to consider the investment requirements to further reduce energy use.

Achieved

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