London-based Legal & General Investment Management (LGIM) has launched two sustainable investment funds aimed at investors seeking to diversify across asset classes whilst incorporating environmental, social and governance (ESG) considerations.
The Future World Multi-Index Funds intend to offer long-term investment growth within two predetermined risk profiles. Through the funds, investors will receive exposure to a wide range of asset classes including equities, fixed income securities, money market instruments and alternatives such as property.
According to LGIM, the majority of each fund will be invested in assets that meet its Future World criteria, or have clearly defined ESG integration.
“We’re seeing increased demand from investors for portfolios which are aligned to their values and can generate capital growth and income within their preferred risk parameters,” said Emiel van den Heiligenberg, head of asset allocation.
The firm stated that sustainable investment offers investors “the chance to diversify away from risks to future returns such as poor company governance or excessive carbon emissions”.
Its Future World Protection List criteria excludes companies which it believes pose the greatest risk to future returns, such as controversial weapons manufacturers, coal manufacturers, and businesses not in line with the United Nation’s Global Compact, which encourages businesses worldwide to adopt sustainable and socially responsible policies.
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