Portfolio decarbonisation Reducing your carbon footprint

Portfolio composition is the targeted selection of investments that aim to achieve both financial returns and a significant reduction in greenhouse gas emissions through portfolio optimisation.

• Investing in leading companies and innovators: We invest in companies that are taking an active role in reducing greenhouse gases and developing innovative technologies to reduce emissions. These include companies in renewable energy, energy efficient technologies and sustainable mobility whose processes and technologies minimise their carbon footprint.
• Climate risk integration: In line with the investor preferences we exclude investments which carry exceptionally high sustainability risks. 
• Promoting sustainable business models: We look for companies with scalable and sustainable business models that are both financially successful and contribute to an environmental or social objective. These companies are often leaders in their sector and set new standards for sustainable business.

Stewardship involves actively encouraging companies to adopt more sustainable business models through engagement, voting, and public policy advocacy. 

Stewardship practices include:

• Engagement: We engage with companies (directly and via third party engagement provider) on a regular basis through meetings, letters, and roadshows. With regards to climate change, LGT speaks to companies about their carbon reduction strategies, setting measurable climate targets, and allocating money to climate solutions in their businesses.
• Proxy voting: As a partial owner of the listed companies in which we invest on behalf of our clients, LGT has the opportunity to vote at shareholder meetings on management's plans and proposals on social and environmental issues, including climate change. LGT can vote for or against a company's climate change plans to show support for the direction of travel or to push for greater ambition..

Public policy advocacy: As financial regulation tightens, investors are increasingly subject to new reporting requirements and practices implemented by policymakers. It is in LGT’s interest, and the interest of its clients, to work together with policymakers, network groups and membership organisations to ensure that policies are designed and implemented to improve market practices on sustainability.

Additionally, we are proud participants in collaborative engagement initiatives like Climate 100+ and the IIGCC’s Net Zero Engagement Initiative to Net Zero Banking Alliance to amplify our influence on companies through one combined ask with our peers.

Climate solutions involve investments in projects and technologies to remove or sequester CO2. These fall into two main categories:

• Nature-based solutions: These cost-effective approaches are inspired by nature and provide environmental, social, and economic benefits. They include protecting, managing, and restoring ecosystems and agricultural land, reversing biodiversity loss, improving water accessibility and quality, and addressing the impacts of climate change. By building resilient ecosystems and improving livelihoods, these solutions help create stronger, more sustainable communities.
• Technology-based solutions: Innovations like Direct Air Capture and Storage (DACS) and Bioenergy with Carbon Capture and Storage (BECCS) remove CO2 from the atmosphere for permanent storage, though they require significant investment.

Combining nature- and technology-based approaches maximizes climate protection efforts, contributing to a resilient, sustainable global economy.

By purchasing and retiring verified carbon credits, investors support projects that reduce or remove GHG emissions, such as reforestation, renewable energy or carbon sequestration. Integrating carbon credits can be an effective way to address residual unavoidable emissions during the transition to a low-carbon economy.

• Using carbon credits to address emissions: We purchase carbon credits from voluntary markets and regulated schemes to address the emissions from our business activities and operations, supporting projects like renewable energy and carbon capture and storage (CCS).
• Carbon credits in our products: By acquiring carbon credits, we back projects that remove, avoid, or reduce CO2, adding a positive climate contribution to our products.