We consider, control and manage all relevant sustainability risks using various methods such as the LGT Sustainability Rating and have developed a sustainable framework for this purpose.
For our sustainability framework, we rely on the LGT ESG Cockpit, LGT's Exclusion Guidelines, the UNEP FI Principles for Responsible Banking, our commitment to net-zero emissions or the LGT Code of Conduct, among others.
Sustainability risks are environmental, social and governance-related (ESG) events or conditions that, if they occur, could have a material negative impact on a financial product or service, such as affecting the value of an investment or impacting a company's assets, financial and earnings situation as well as reputation.
Sustainability risks are environmental, social and governance (ESG) events or conditions that could potentially have a negative impact on the value of an investment.
At LGT Private Bank, we manage sustainability risks by applying exclusion policies and minimum ESG standards in our investment decision-making process based on the LGT Sustainability Rating. For further details, please refer to sustainable investing at LGT.
With our proprietary LGT ESG Cockpit, which sources raw data from different ESG data providers, we determine the LGT Sustainability Rating to assess the sustainability quality of companies, countries and supranational organizations as underlying of investment vehicles (equities, bonds, funds and ETFs). The LGT Sustainability Rating ranges from one to five stars, with one star indicating the lowest and five stars the highest sustainability quality. We believe a low sustainability quality of investment instruments indicates high sustainability risk, which could result in a negative impact on financial returns in the long term.
LGT Private Banking, as a financial market participant and financial advisor, considers Principal Adverse Sustainability Impacts Statement (PAI) of its investment decisions and investment advice on sustainability factors. The present statement is the consolidated principal adverse sustainability impacts statement of LGT Private Banking.
Description of principal adverse sustainability impacts
Principal adverse impacts on sustainability are understood as the impacts of investment decisions that result in negative effects on sustainability factors. Investment decisions and advice might cause, contribute to or be directly linked to effects on sustainability factors that are negative, material or likely to be material.
Integration of PAI at LGT Private Banking
Engagement policy summary
In line with an active engagement policy, LGT Private Banking also supports its clients (or third parties authorized by clients) in exercising their voting rights, e.g. by ordering admission cards to attend general meeting or by issuing deposit confirmations. Furthermore, as a custodian bank, LGT Private Banking provides its clients with information in connection with ordinary or extraordinary general meetings. This means that clients will receive fully automated invitations to the general meetings of listed companies domiciled in the EU/EEA whose shares are held in their custody account.
References to international standards
At LGT Private Banking, sustainability is an integral part of our culture and our values. With the Sustainability Strategy 2030 we aim to further integrate sustainability into all areas of our business and across our entire product range. With the commitment to the ten UN Global Compact Principles in the areas of human rights, labor, the environment and anti-corruption, LGT Private Banking has committed to a minimum standard with regard to ESG factors.
References to international standards
At LGT Private Banking, sustainability is an integral part of our culture and our values. With the Sustainability Strategy 2025 we aim to further integrate sustainability into all areas of our business and across our entire product range. With the commitment to the ten UN Global Compact Principles in the areas of human rights, labor, the environment and anti-corruption, LGT Private Banking has committed to a minimum standard with regard to ESG factors.
In addition, LGT Private Banking is a signatory to the UNEP FI's Principles for Responsible Banking, according to which we must measure the impact we have with our investments on the Sustainable Development Goals and the Paris Agreement. By developing methods to measure the impact of our activities, we will further mitigate material principal adverse impact on sustainability factors in our core business.
Climate change is one of the most pressing challenges we face today, and LGT Private Banking has therefore committed to become net-zero operationally by 2030.
The LGT Code of Conduct serves as a policy for all LGT employees and the Foundation Board members. It defines cornerstones for our common value system and our ethical and professional standards. The LGT Code of Conduct stipulates that we offer equal opportunities for employment and promotion irrespective of gender, age, religion, nationality, ethnic background, sexual orientation, marital and family status, physical abilities or other characteristics.
LGT Private Banking has developed internal strategies for the consideration of principal adverse impacts pursuant to Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector. This consideration is dependent on and is limited by the availability of the required information in the market. The required data quality and availability is not necessarily given for all assets within managed funds, mandates and investments of LGT Private Banking. This PAI statement is not applicable to cases in which portfolio management has been delegated to a third party or in which LGT is obliged to adhere to regulations or instructions that hinder it from adhering to this PAI statement (e.g. if client instructions contradict the PAI statement).
Sustainability is an integral part of our culture and our values at LGT. With the sustainability strategy 2030 we aim to further integrate sustainability into all areas of our business and across our entire product range. With our commitment to the ten Principles of the UN Global Compact in the areas of human rights, labor, environment and anti-corruption, LGT Private Banking has committed to a minimum standard with regard to all ESG factors. The Sustainability Board defines the strategic direction and guidelines for what we understand as sustainability.
LGT Private Banking manages sustainability risks using various methods. Examples include the LGT ESG Cockpit, exclusion policies, UNEP FI's Principles for Responsible Banking, our commitment to net-zero emissions and the LGT Code of Conduct.
The LGT Code of Conduct serves as a policy for all LGT employees. It defines cornerstones for our shared value system and our ethical and professional standards. For example, to mitigate social risks, the LGT Code of Conduct stipulates that we offer equal opportunities for employment and promotion irrespective of gender, age, religion, nationality, ethnic background, sexual orientation, marital and family status, physical abilities or other social/personal characteristics. It highlights our ambition to contribute to society and the environment, which includes taking sustainability criteria into account in our business activities and in our product range.
The LGT Group Remuneration Policy reflects the importance of the Code of Conduct, including the sustainability risks it seeks to mitigate, by stipulating that failures or breaches of the LGT Code of Conduct or internal directives and instructions can - among other things - result in a reduction of variable compensation.
Adherence to the LGT Code of Conduct is assessed at the annual conduct review meetings. During these meetings, input from the control functions (Risk, Compliance and Internal Audit) and Human Resources is discussed, and impacts on variable compensation are considered. The outcome of these conduct review meetings is reported to the Group Compensation Committee.
We believe that financial institutions play an important role in ensuring all human rights are respected. Investors can actively push companies to comply with international human rights law through research, education, dialogue, and divestments. Banks can do the same.
We at LGT commit to creating a favorable impact on society by pursuing opportunities to advance human rights aligned with the UN Sustainable Development Goals (SDGs). We also aim to mitigate or actively reduce risks related to human rights and avoid negative impacts.
Read our full Human Rights Statement
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