Legal & General Investment Management (LGIM) has collaborated with The National Trust to help charities, institutions and investors meet fossil fuel divestment commitments.

Following Christian Aid’s stance on banking and decision to move away from Barclays, the new solution will seek to exclude any companies with a carbon reserve intensity above zero per cent.

The Legal & General Future World ESG Developed Fossil Fuel Exclusions Index Fund will launch with significant initial seed funding and is open to UK investors including charities and endowments, platforms and wealth managers.

The Fund seeks to offer investors UK and global equities exposure while incorporating ESG tilts to LGIM-designed indices. The tilting mechanism aims to reduce exposure to companies associated with poor ESG practices and provides greater exposure to those that are better positioned from an ESG perspective. This approach combines LGIM’s positive engagement with an explicit fossil fuel exclusion for investors where fossil fuels are a red line.

The LGIM-designed ESG indices require companies to meet certain minimum global criteria to be included within index construction. The Fund adopts a strict exclusion policy relating to direct investments that are deemed incompatible with ESG criteria for this strategy. In practice, it seeks to exclude any companies with a carbon reserve intensity above zero per cent which includes fossil fuel companies in the energy, mining and utilities sectors.

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