Legal & General : Social impact report 2023

Investing in a sustainable future

Legal & General Group Plc | Social impact report 2023

		Long-term		Better communities in
Introduction		financial wellbeing		which to live and work

Contents

Welcome to our 2023 Social impact report

At Legal & General, 11,500 people are working together to realise our purpose: to improve the lives of our customers, build a better society for the long term and create value for our shareholders. Here's how.

Engaging customers and
employees with our impact	Responsible role model

In this report

Introduction

A business guided by social purpose A more sustainable world

Our approach to sustainability Governance of sustainability

Our impacts, risks and opportunities assessment

Long-term financial wellbeing

Younger people

Working-age people

Older people

Better communities

in which to live and work

Place-based social impact

City regeneration

Housing

Tackling health inequality

Engaging customers and employees with our impact

Our responsibility to our customers

Customers' wellbeing

Playing our part in the community

Diversity and inclusion

Appendix

1

Responsible role model

2	Our culture	36
3	Understanding our people	37
4	Developing our people	38
6	Looking after our people	39
7	Engaging with others	44
	Influencing through responsible
	investment management	46
10	Our supply chain	47
Protecting human rights	48
13
Business ethics	49
15
When things go wrong	50

Diversity and inclusion

20	Diversity and inclusion strategy	53
Greater diversity	55
22	A more inclusive culture	57
24	Involving our people in inclusion	58
26	People data	60
	Our pay gaps	64

Appendix

29 Independent limited assurance summary

71

30

32

Reporting on our progress

Annual report and	Climate and nature	Modern slavery	Social impact report
accounts 2023	report 2023	statement 2023	- Basis of preparation

Legal & General Group Plc 2023 Social impact report

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A business guided by social purpose

At Legal & General a sense of responsibility, commercial opportunity and motivated people combine. These ingredients enable us to keep creating value for society and our shareholders."

When I joined Legal & General in January 2024,

I knew I'd be part of a business that is guided by a clear social purpose. Doing the right thing, by using capital to solve society's long-term challenges and create value for shareholders, is at the heart of our culture and shapes our decision making.

Over the last decade, Legal & General has leaned into some of the major social challenges of our lifetimes. We have used our investment capacity to drive practical change, our convening power to develop partnerships and our experience to inform policy, across issues as varied as the ageing population, under-investment in the real economy and infrastructure and the challenge of climate change.

As a major global investor, pension fund manager and provider of financial and protection services, much of what we do has inherent social value.

We deploy our scale, financial strength and expertise to deliver impact across these areas.

As a provider of financial services meeting the needs of c.14 million customers through our Retail division, we're there for people throughout life, especially at difficult times.

We meet the needs of ageing populations to live happier and longer retirements. We design and deliver our products and build relationships with civil society to meet people's changing needs, aiming to exceed their expectations. Today, we are adapting our offer and support to recognise the shifting demands and responsibilities of our customers as they plan for their financial futures. Chapters Two and Four of this report describe how we are doing this.

Secondly, we meet our obligations to tomorrow's retirees - in the UK, US and Canada - and the people we insure by creating assets that are socially useful today and will hold their value in tomorrow's economy. From affordable housing to urban regeneration projects to science parks, we're investing to provide people with better places to live and businesses with the infrastructure they need to create jobs for tomorrow's economy. We are mindful of leaving the communities where we invest better off for our presence. Chapter Three outlines our progress in 2023.

Thirdly, we're trusted to manage £1.2 trillion of assets for clients all over the world, through equity and debt in publicly traded companies and sovereigns, real estate and other financial instruments. We take seriously our responsibility to manage this wealth in ways that promote market stability and enable the necessary environmental and social conditions to generate sustainable returns for our clients. We use our influence to improve market practices and to advocate for the better governance of firms around the globe. Chapters Four and Five outline how we seek to influence others, while ensuring we maintain the highest standards in how we do business.

Our success is underpinned by the leadership and commitment of our 11,500 people. We have a duty to them to create a culture where mental and physical wellbeing matters, where diverse views and experiences are valued and where everyone can succeed with equitable access to opportunity. You can read more about our approach in Chapters Five and Six.

At Legal & General a sense of responsibility, commercial opportunity and motivated people combine. These ingredients enable us to keep creating value for society and our shareholders.

I'd like to extend thanks to my predecessor,

Sir Nigel Wilson, who helped to make the pursuit

of social impact a fundamental driver of our business and our culture. This was an important part of what drew me, and many others, to join the business. I look forward to working with our teams to build on our record and continue to deepen our impact in years to come.

António Simões

Chief Executive Officer

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A more sustainable world

Legal & General's purpose is to improve the lives of our customers, build a better society for the long term and create value for our shareholders. In doing so, we seek to build a better future and a more sustainable world.

Our place in the world

Our role in the global economy goes straight to the heart of our purpose. It manifests in the ways we do business: the investments we make, the ways in which we seek to influence other actors in the economy and how we operate. We invest pensioners' money, insurance premiums and our clients' wealth in useful ways, matching capital with investment opportunities and creating assets with long-term value.

While we're well-placed to generate social and economic good through the work we do, we're not immune to the great challenges of our time. In fact, we see the secular issues that the world faces as being a source of commercial opportunity.

Turbulence over the past five years, driven by the Covid-19 pandemic and subsequently by geopolitical instability and significant inflation, don't detract from the challenges facing the global economy. In fact, they've exacerbated many of their effects. Therefore, our long-term strategic response, which is set out in the chart on the right and over the page, remains focused on six major challenges and has not changed in the face of specific short-term shocks.

Our businesses

We have four core businesses which work together to enable us to deliver on our purpose, which is to improve the lives of our customers, build a better society for the long term and create value for

our shareholders.

Institutional retirement. We provide institutional pension risk transfer solutions, guaranteeing the retirement income for corporate pension scheme members.

Capital investment. We use some of our customers' pension assets, as well as the group's shareholder capital, to make long-terminvestments in assets such as clean energy, housing and alternative finance.

Investment management. We are one of the world's largest asset managers and a major global investor.

Retail. We are a leading provider of UK retail retirement and protection solutions and US brokerage term life insurance.

Our people at the heart of purpose

Most importantly, our purpose informs not only what we do, but how we do it.

This is where our 11,500 people come in. They help us realise our purpose in many ways: in their everyday roles as investment, retirement and insurance specialists, or as expert housebuilders, or in a range of professional support roles; and in the things they do to protect and nurture our culture and serve the communities in which we operate.

Our commercial success depends on our people, which is one of the reasons why much of this report is given over to describing the ways we seek to understand and support our people as we engage them in creating a better society and creating value for our shareholders.

A culture of ambition and integrity

Ours is an ambitious vision and we seek to build a culture which supports this ambition, where employees act in a straightforward, collaborative and purposeful way and where leadership is agile, ambitious and authentic.

This cannot work unless we also have a culture of integrity. That is why we take our responsibility

as an employer and as a participant in labour markets through our value chain, extremely seriously.

We insist on very high standards of business and personal integrity from our people, our suppliers and those doing business with us. This is because we believe that we can only deliver on our ambitions if we have the right foundations for success in place. That includes a commitment to observing the spirit and letter of law and regulation, as well as creating an inclusive environment in which diverse kinds of people can succeed and use their varied experiences to help solve some of the biggest issues facing society.

Purpose and opportunity coming together

We see our social and environmental impact as going beyond simple adherence to the requirements

of environmental, social and governance (ESG) considerations. It is also a source of commercial potential. The transition to net zero, the housing crisis and the need to invest in healthcare and other infrastructure all present opportunities for the long-term investment of capital against our future pension liabilities.

Our commercial strategy

Ageing demographics

Globalisation of asset markets

Investing in

the real economy

Welfare reforms

Technological innovation

Addressing climate change

  Please see our 2023 Annual report and accounts for further information.

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Our approach to sustainability

Our purpose means that we see the sustainability agenda as central to what we're trying to achieve commercially.

While this report focuses on our business's social impact, it's important to note that this agenda forms part of our broader approach to running our business in a sustainable and responsible way. This wider sustainability strategy, right, includes our response to climate change and other environmental issues.

Our purpose

Our purpose is to improve the lives of our customers, build a better society for the long term and create value for our shareholders.

Our commercial context and business strategy

1

2

3

4

5

6

Ageing

Globalisation of

Welfare

Technological

Investing in

Addressing

demographics

asset markets

reforms

innovation

the real economy

climate change

Developing our thinking Climate and nature

Our sustainability focus areas

Although climate change remains our most material sustainability issue, we understand there are material interdependencies between climate change and the natural environment. Over the last year, we have continued to develop our approach to nature within our business. We have sought to understand our business' impacts and dependencies on nature.

For more information on our developing approach to nature, please see our Climate and nature report.

Modern slavery

In 2023, we continued to develop our response to the risks of modern slavery in our operation and supply chain. We have taken steps to strengthen our governance, undertaken due diligence across our business and set key performance indicators for our work in this area.

Full details of the actions taken in 2023 can be found in our Modern slavery statement.

We'll promote long-term financial wellbeing

1 3 4

We'll promote people's long-term and lifelong financial security by providing good value, simple, inclusive, accessible products and education for more people.

See pages 8 to 17

We'll create better communities in which to live and work

1 2 3 5

We'll build better communities by delivering socially and environmentally positive housing and workplaces at scale.

We'll create long-term economic prosperity by engaging thoughtfully with communities to meet their needs.

See pages 18 to 26

We'll invest in game changing environmental solutions

2 4 6

We'll play our part in tackling the climate and biodiversity crises by investing in leading-edge environmental technology and solutions. We'll continue delivering low-carbon energy and environmentally beneficial infrastructure and housing, while reducing environmental harm.

See our Climate and nature report

We'll engage our customers and employees with our impact

1 2 3 4 5 6

We'll make sure our customers and employees know that,

by being part of Legal & General, they have a positive social and environmental impact. We'll meet demand for positive social and environmental impacts by placing these at the centre of how we do business and design more

of our products.

See pages 27 to 33

Supporting our work in these four areas is our commitment to run our business in a responsible way.

This includes supporting mental and physical health and wellbeing, promoting diversity and inclusion (D&I) and enabling social mobility - both in our own business and in how we influence and interact with others. See pages 34 to 69.

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Our approach to sustainability

continued

Reporting our progress

Our sustainability-related disclosures are across several reports. We recommend that readers who want to understand our approach to the whole range of sustainability issues read the publications together, but the summaries below are designed to help navigate them.

Annual report and accounts 2023

Our Annual report and accounts outlines our approach to sustainable business, comments on how our commercial activities have contributed to positive environmental and social outcomes and describes our high-quality governance.

Climate and nature report 2023

This report, prepared in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), describes our climate and environment strategy, scenario planning, risk management, metrics and governance. During 2023, we have developed our approach to the issue of nature and biodiversity loss. The climate and nature report is the first step on our journey in consideration of the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations, which we intend to adopt more widely in our reporting in the future.

Social impact report 2023

The present document, our Social impact report, describes the commercial and not-for-profit actions we've taken towards the areas of focus set out on page 4. It includes information on our approach to business ethics. It also includes people-related disclosures: workforce data; information on diversity and inclusion; gender and ethnicity pay gap information; and information on engagement and collective representation.

Modern slavery statement 2023

The Modern slavery statement describes the steps we have taken to identify the risks, and remediate any instances, of modern slavery and human rights violations. It covers our strategy, risk processes, governance and key performance indicators relating to this issue in our operation and supply chain.

Social impact report

- Basis of preparation

Certain data in the Social impact report has been subject to independent limited assurance by Deloitte. The Basis of preparation sets out the criteria under which the assurance has taken place.

All publications available on our website: group.legalandgeneral.com

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Governance of sustainability

Accountability for building a sustainable business is shared by teams across our business, supported by governance led by the Group Board.

Roles and responsibilities

Our commercial strategy and business plans, which includes oversight of our six growth drivers (see page 3) and therefore the strategic direction for sustainability, are set by the Group Management Committee (GMC). The GMC is a formal committee of the Group CEO, António Simões. Its purpose is to support the CEO in the discharge of those things within his authority as delegated to him by the Group Board, in particular in relation to group-wide strategic and material matters.

Oversight for the delivery of the sustainability strategy is the responsibility of the Group Sustainability team. Delivery of specific objectives relating to sustainability is the responsibility

of various teams throughout the business.

Governance of sustainability matters

The overall accountability for the long-term strategy of the Group, including its contribution to wider society, sits with the Group Board, but the governance of specific sustainability themes sits with other bodies.

Governing our response to climate change The issue of climate change is central to our risk management and growth agendas and therefore we have separate, complementary governance in place for this specific issue. Please see our Climate and nature report for full details of how we manage this.

Our Board, led by Chair Sir John Kingman, is responsible for the overall leadership of the Group; it is charged with setting the Group's values and standards. The role of the Board is to promote the long-term sustainable success of the company, whilst simultaneously generating value for shareholders and contributing to wider society.

The Group Chief Risk Officer is responsible for ensuring we understand, identify, measure, monitor, manage and report risks in line with the risk appetite parameters set by the Group Board. The Group Chief Financial Officer, who is also a Board member,

is responsible for supporting the Group CEO in establishing group-wide financial and strategic objectives.

The Global Diversity and Inclusion Council is accountable for governance of our D&I activities.

It provides regular updates to the Board through the Nominations and Corporate Governance Committee, comprises senior leaders from across our business divisions and is chaired by the CEO of Legal & General Capital, Laura Mason.

The Group Health and Safety Committee assumed accountability for the governance of modern slavery and human rights matters during 2023. It is a sub-committeeof the Executive Risk Committee which in turn reports to the GMC.

Remuneration

Following the addition of an ESG measure to executive directors' annual bonus performance

Group Risk Committee

Executive Risk Committee

Legal & General Plc Board

Group CEO

Group Management

Committee

Group Nominations and

Corporate Governance

Committee

Global Diversity and

Inclusion Council

While our sustainability strategy (see page 4) was not formally reviewed by the Board in 2023, work was undertaken to prepare for an update in the first quarter of 2024 through the Group Environment Committee. Please see page 7 for more information.

More information on the Group's Executive and Board Governance Framework can be found in the Annual report and accounts.

conditions in 2021, we have continued to apply such conditions to executive reward. Performance against 'strategic objectives' determines 30% of executive directors' bonus opportunity. 'Strategic objectives' covers a range of sustainability-related matters, including customer, culture and ESG. Environmental performance measures are aligned with the commitments made in our Climate and nature report.

Health and Safety

Committee

(also has responsibility for

modern slavery and human rights)

Group governance bodies Group management bodies

Bodies with accountability for an area of social sustainability Formal reporting line

Regular provision of information and reporting

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Our impacts, risks and opportunities assessment

During 2023, we undertook a review of our sustainability impacts, risks and opportunities

to ascertain the most material topics for the Group and to assess the fitness of our various strategies to respond to them.

We considered that nine topics were of a 'high to very high' relevance to us, both because they have a high degree of impact on us and because we have a high potential to impact how these issues unfold.

They are:

• climate change mitigation
• biodiversity and ecosystem loss
• transparency of reporting
• accessible and affordable housing
• financial inclusion
• infrastructure and real estate
• health and wellbeing
• corporate culture
• diversity and inclusion.

1

Taxonomy definition

2

Assessment of topic relevance and materiality to the Group

We defined a taxonomy of 201 sustainability topics, grouped into 59 themes and 11 mega-themes across ESG groupings. For the purposes of this exercise we took 'sustainability topics' to mean themes which originate outside the Group; can be classified as ESG concerns; and whose meanings have a high degree of interoperability across industries and sectors of the economy.

Our long-list was derived by reference to external standards including (but not limited to) the United Nations' Sustainable Development Goals; the Principles for Responsible Investing; the Global Reporting Index; the Sustainability Accounting Standards Board framework; and the European Union's Corporate and Sustainability Reporting Directive and its supporting standards.

Having long-listed the topics, we next assessed their relevance to the Group, using the following methodology:

• an assessment of the topic's ability to impact the Group's revenue, cost of capital and valuation (including an assessment of reputational risk) over the short, medium and long term
• consideration of whether the topic is systemically important or poses a systemic risk
• a view of the Group's capacity to impact the unfolding of, or its dependency on the unfolding of, the topic. The assessment of impacts, risks and opportunities was informed by our business model and strategic purpose
• a summary judgment on the overall importance of the topic to the Group.

Our analysis concluded that we have an appropriate awareness and coverage of topics in our various sustainability and related strategies. There are some gaps which are either the result of evolving thinking or instances where we are still working towards developing our view. There are some topics where additional focus could drive additional benefit to the business and our stakeholders. This includes developing our approach to nature and biodiversity and taking appropriate steps to tackle modern slavery. These issues are covered in our Climate and nature report and our Modern slavery statement, respectively.

3		Having assessed the relevance of the topics, we took a view on the extent to which our existing sustainability and related strategies
	adequately addressed the most relevant topics.
Assessment of the fitness
of our strategic approach

	4		The findings were subject to scrutiny and approval by the Group Environment Committee, a management committee, in the first quarter
		of 2024.
	Governance reviews

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The UK's Money and Pensions Service defines financial wellbeing as being 'financially resilient, confident and empowered'. This means feeling secure and in control of your finances, both now and in the future: knowing that you can pay the bills today, can deal with the unexpected and are taking steps to ensure a healthy financial future.

Long-term financial wellbeing

Younger people	10
Working-age people	13
Older people	15

Legal & General Group Plc 2023 Social impact report

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Appendix

We know that financial difficulties can impact all aspects of human health, especially when unexpected challenges arise, such as cost-of-living pressures. As a leading insurance and retirement product provider, we are in a key position to influence people's long-term financial wellbeing.

We're committed to creating a better financial future for the customers and the communities whom we serve, whatever their life stage or financial position.

Our Retail business offers products, services and tools which support individuals' and society's long-term financial wellbeing. We enhance these with extra services and not-for-profit activities aimed at improving our customers' ability to cope with difficult times, creating additional, targeted value for customers who need it most.

Our approach

At Legal & General, we're committed to building a better financial future for the customers and communities whom we serve. Our products and services enable people and their support networks, to manage their current finances and plan effectively for a secure financial future.

Selected highlights

• We launched our second year of partnership with RedSTART, and with our additional funding, enabled the financial education charity to expand its programme into Wales.
• We used our 'Bank of Family' research insights to create a free 'Guide to Gifting' so that family members giving to loved ones can maximise their financial support.
• We rolled out our Care Concierge service to all Retail customers and clients for free, providing guidance for individuals and their loved ones to find and fund care.

Section outline

In this chapter, we describe what we're doing to support customers at each life stage, as well as our work with not-for-profit organisations to improve financial wellbeing for the wider community.

Long-term

financial wellbeing

Legal & General Group Plc 2023 Social impact report