LGIM unveils tilted climate transition tracker fund

Legal and General Investment Management has launched a passive equity fund that aims to provide exposure to the opportunities arising from the low-carbon energy transition for defined benefit and defined contribution investors.

The FTSE TPI Global (ex Fossil Fuels) Equity Index Fund is based on FTSE Russell’s FTSE Global Equity Index Series and excludes fossil fuels, tobacco, weapons and UN Global Compact violators.

The fund constituents are adjusted based on their fossil fuel reserves, carbon emissions and green revenues, as well as on the Transition Pathway Initiative (TPI) analysis of how the world’s largest and most carbon intensive public companies are managing the climate transition.

The aim of this index fund is to provide “sophisticated and diversified exposure” to companies that are more aligned to the Paris Agreement, while going beyond a narrow focus on carbon emissions and fossil fuels.

The fund has received an initial investment from the Atos UK Pension Schemes and will also be offered as an investment option on the PensionBee platform.

Mark Johnson, Head of Institutional Clients at LGIM, said: “This fund serves to meet the needs of investors who are looking to reduce or remove their portfolios’ exposure to companies lagging on climate factors as well as other social considerations,” he added.