At LGT, our stewardship activity revolves around four key themes: Climate Change, Fairer Societies, Nature & Biodiversity and Strong & Robust Governance. These key priorities guide us in identifying the risks companies face and highlight areas where we as investors can drive meaningful change. These themes also reflect the values that we seek to champion, and which set us apart – long-term thinking, responsible business practices and respect for both people and the planet.
At LGT, we target our stewardship efforts towards sectors with significant climate impacts and opportunities, such as mining, energy and industrials. Critical minerals like copper, nickel and lithium are essential for low-carbon technologies such as electric vehicles, batteries and renewable energy infrastructure. Our engagement helps us understand how companies are navigating the complex task of scaling greater access to these crucial minerals while simultaneously minimising environmental, social and governance (ESG) risks. We assess the companies we engage with against science- and research-based transition pathways, including emission reduction targets, capital allocation and social responsibility.
A core element of LGT’s stewardship strategy, engagement enables constructive dialogue with investee companies, fund managers and other stakeholders. Through these dialogues, we aim to address material ESG risks and opportunities and strengthen governance, thereby supporting sustainable long-term value creation for our clients. These interactions are conducted both proactively, to address emerging opportunities, and reactively, to mitigate risks and improve practices.
Using proxy voting is another crucial component of our stewardship approach, reinforcing our engagement by clearly signalling our expectations on climate issues to companies. Whilst we assess each proposal and company on a case-by-case basis, we often look for a set of baseline climate expectations, including:
LGT exercises voting rights to hold companies accountable on material ESG issues, guided by our stewardship priorities and independent analysis. Stewardship isn’t about ticking boxes. It’s about using our influence as investors to push for real progress on the issues that shape long-term performance and support sustainable outcomes.
One recent example is our stewardship efforts with BHP, one of the world’s largest mining companies and critical supplier of minerals essential for the global energy transition. Recognising BHP’s significant role in decarbonisation efforts, we have engaged with the company to encourage continued progress in its climate transition strategy.
BHP has made commendable progress, particularly in enhancing disclosures around Scope 3 emissions related to steel production - one of their largest emission sources.1 However, important areas of concern persist, notably around the lack of detailed short-term emissions targets across Scopes 1, 2 and 3 and medium-term targets not fully aligned with a rigorous 1.5°C pathway.2 A 1.5°C pathway means setting targets that align with the global goal of limiting warming to no more than 1.5°C – something climate scientists agree is critical to avoiding the most severe climate impacts.3 For companies, this requires near-term emission cuts backed by clear strategies, not just distant net-zero pledges.
Our decision to vote against BHP’s Climate Transition Action Plan (CTAP) was an informed and considered step. It reflected our broader commitment to driving accountability and advocating for more ambitious climate targets — rooted in analysis, long-term thinking, and a desire to see businesses succeed in a changing world.
Our engagement with BHP is one of several featured in our 2024 Stewardship Report, which outlines how we work with companies to address risks, protect long-term value and encourage continuous improvement.
As the report highlights, our approach to stewardship is both proactive and reactive. We engage with companies to address issues before they escalate, and we respond swiftly when risks emerge. In an increasingly complex world shaped by geopolitical uncertainty, climate change and social challenges, the role of investors in supporting responsible corporate behaviour has never been more important.
Discover more about our stewardship activities and their impact by reading our full Stewardship Report.
[1] Scope 3 emissions refers to indirect emissions produced by a company relating to its supply chains and goods and services. In the case of BHP, this could refer to emissions from steelmakers who use BHP’s iron ore, the shipping of its products and the emissions from suppliers and contractors.
[2] Scope 1 and 2 emissions refers to direct emissions from a company relating to its operations. For BHP, this could include those produced from the fuel burned by mining trucks and onsite processing (Scope 1) or from electricity used to power mines and facilities (Scope 2).
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