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Legal & General: corporate social responsibility is about hedging against future risks



There’s an old adage in the corporate sector, about the head of corporate social responsibility (CSR) being tucked away on the 11th floor, simultaneously banging the drum for sustainability and their head against the wall in frustration.

While this may have been the case a decade ago – and albeit still the case in some businesses today – there seems to be a growing appreciation of the core value that CSR can add.

Graham Precey, who heads up the CSR and ethics team at the leading insurance firm Legal & General, arrives at work each day with a clear mantra: to enhance the decisions the business makes.

I genuinely believe we’re in times where you need to have a wider, more diverse set of views to make business decisions,” he says.

Those decisions, for Legal & General  span a range of financial products. It provides its 8 million customers with pensions, life insurance, home insurance and savings. And it is also one of Britain’s biggest investors – owning roughly 4% of the FTSE 350, with total assets surpassing £450 billion.

On paper, it is exactly the type of business you would expect the aforementioned exasperated CSR activist to be working for – but Precey insists this is not the case, and that he is not a lone voice. You can almost substitute the term CSR for research and development (R&D) these days, he says. It’s not about how much a firm gives to charity or how many plastic bottles it recycled – but instead about how it hedges against future risk.

Precey firmly believes that many of the private sector’s solutions are in the third sector. He gets “a real buzz” from bringing people together that may never have thought about working with each other. Sitting in a coffee shop just down the road from Legal & General’s London HQ, he lists a few of the successful collaborations.

There’s the Everyday Matters initiative, which helps bring real issues like flooding or ill health to life for Legal & General’s frontline staff. During the floods at the beginning of the year, the firm paid for some of its call centre workers to visit the RNLI flood rescue team. “How do you empathise and understand what flood water does to your house if you’ve never seen it?,” Precey asks.

Then there’s AgeUK’s Call in Time programme. Legal & General has 1 million annuity customers – people who are drawing from the pension they have saved – but a very young workforce. The aim of this initiative is to help the staff understand what it’s like making the biggest financial decision of your life, through regular 15-minute phone conversations with an older person for whom that might be the only call they get that week.

More recently, Legal & Gerneral got behind the third annual Action on Stroke Month, which in 2014 focused on transient ischaemic attacks (TIA) – also known as mini-strokes or ‘funny turns’. Forty-six thousand people experience a TIA every year in Britain – but most don’t know its significance or its long-term implications.

Precey says, “From a life insurance perspective, we pay out on full strokes because it has typically a long-term effect on the customer. But there’s not enough data in the market to fully understand mini-strokes.

We want more people when they’ve had a mini-stroke to recognise what’s happened and to go and tell somebody, which then creates more data, which then enables us to insure this more broadly in the future.”

Given the success of these commendable initiatives, is there a financial solution? Social impact investment, creating financial products out of a social issue, is quickly gathering pace within the mainstream investment world.

Precey explains that Legal & General is “trying to get its head around” the market and could one day buy into something like a social impact bond (SIB), which he says “bring together the best of all worlds” – not-for-profits, corporates and government.

Where Legal & General is directing much of its time and effort is in UK infrastructure – in which it has committed to invest £15 billion, across housing, energy and healthcare over the next 5 years. In the last 12 months, Legal & General’s CSR work has been to enhance these big and long term decisions with strong consideration for environmental, social and governance (ESG) factors working with the knowledge from not-for-profits and NGO’s to carefully place long term funds into parts of the economy and society that need long term stable capital..

For the retail investor, Legal & General offers a couple of dedicated ethical funds and a Global Environmental Enterprises fund which invests in environmental technology, but its long-term aim is to apply that ESG lens to all of its investments.

Precey says this decision is simply a response to demand from consumers – but again a way of avoiding future risk: “When you place money into a financial institution, you’ve made a choice – not only about what you expect back personally, but about how that money is used. And I think the recession has made consumers far more conscious and thorough, when actually they tend to have less money to invest.”

Having worked at Legal & General for the best part of 13 years, seven in his current role, Precey is familiar with the sometimes negative view of large corporates and, in particular, financial services.

A recent YouGov survey found that nearly half of parents (44%) think working in the industry is “not socially responsible”. Asked what advice he would give to his own two children, Precey says, “I genuinely believe that as people grow up, they’ll see things that don’t feel right or that need fixing. What I’d say to my kids is, ‘You’re here for a short while and you have the chance to change things. Go and find a home – it could be a company, an NGO, a charity – and solve something’.”

As for the future, his focus is on helping Legal & General put money into places that matter. But his mission will always come back around to helping the firm do what it does best.

People go to their insurance companies when they’re least vulnerable, and they take out a product that helps them when they’re at their most vulnerable. The insurance sector kicks into action when people are at their most vulnerable – whether they’ve been flooded, got a critical illness or passed away. Whenever people talk about CSR, the first thing you have to get right is what you’re in business to do.”

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Further reading:

Legal & General: ‘fundamentally wrong’ that CEOs are rewarded for share buybacks

Lessons in sustainability from the city that touches the clouds

Report calls for businesses to move from ‘doing less harm’ to having positive impact

Legal & General backs mini-stroke awareness month

Legal & General backs Social Enterprise Assist scheme in Croydon and Sussex


Will Self-Driving Cars Be Better for the Environment?



self-driving cars for green environment
Shutterstock Licensed Photo - By Zapp2Photo |

Technologists, engineers, lawmakers, and the general public have been excitedly debating about the merits of self-driving cars for the past several years, as companies like Waymo and Uber race to get the first fully autonomous vehicles on the market. Largely, the concerns have been about safety and ethics; is a self-driving car really capable of eliminating the human errors responsible for the majority of vehicular accidents? And if so, who’s responsible for programming life-or-death decisions, and who’s held liable in the event of an accident?

But while these questions continue being debated, protecting people on an individual level, it’s worth posing a different question: how will self-driving cars impact the environment?

The Big Picture

The Department of Energy attempted to answer this question in clear terms, using scientific research and existing data sets to project the short-term and long-term environmental impact that self-driving vehicles could have. Its findings? The emergence of self-driving vehicles could essentially go either way; it could reduce energy consumption in transportation by as much as 90 percent, or increase it by more than 200 percent.

That’s a margin of error so wide it might as well be a total guess, but there are too many unknown variables to form a solid conclusion. There are many ways autonomous vehicles could influence our energy consumption and environmental impact, and they could go well or poorly, depending on how they’re adopted.

Driver Reduction?

One of the big selling points of autonomous vehicles is their capacity to reduce the total number of vehicles—and human drivers—on the road. If you’re able to carpool to work in a self-driving vehicle, or rely on autonomous public transportation, you’ll spend far less time, money, and energy on your own car. The convenience and efficiency of autonomous vehicles would therefore reduce the total miles driven, and significantly reduce carbon emissions.

There’s a flip side to this argument, however. If autonomous vehicles are far more convenient and less expensive than previous means of travel, it could be an incentive for people to travel more frequently, or drive to more destinations they’d otherwise avoid. In this case, the total miles driven could actually increase with the rise of self-driving cars.

As an added consideration, the increase or decrease in drivers on the road could result in more or fewer vehicle collisions, respectively—especially in the early days of autonomous vehicle adoption, when so many human drivers are still on the road. Car accident injury cases, therefore, would become far more complicated, and the roads could be temporarily less safe.


Deadheading is a term used in trucking and ridesharing to refer to miles driven with an empty load. Assume for a moment that there’s a fleet of self-driving vehicles available to pick people up and carry them to their destinations. It’s a convenient service, but by necessity, these vehicles will spend at least some of their time driving without passengers, whether it’s spent waiting to pick someone up or en route to their location. The increase in miles from deadheading could nullify the potential benefits of people driving fewer total miles, or add to the damage done by their increased mileage.

Make and Model of Car

Much will also depend on the types of cars equipped to be self-driving. For example, Waymo recently launched a wave of self-driving hybrid minivans, capable of getting far better mileage than a gas-only vehicle. If the majority of self-driving cars are electric or hybrids, the environmental impact will be much lower than if they’re converted from existing vehicles. Good emissions ratings are also important here.

On the other hand, the increased demand for autonomous vehicles could put more pressure on factory production, and make older cars obsolete. In that case, the gas mileage savings could be counteracted by the increased environmental impact of factory production.

The Bottom Line

Right now, there are too many unanswered questions to make a confident determination whether self-driving vehicles will help or harm the environment. Will we start driving more, or less? How will they handle dead time? What kind of models are going to be on the road?

Engineers and the general public are in complete control of how this develops in the near future. Hopefully, we’ll be able to see all the safety benefits of having autonomous vehicles on the road, but without any of the extra environmental impact to deal with.

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New Zealand to Switch to Fully Renewable Energy by 2035



renewable energy policy
Shutterstock Licensed Photo - By Eviart /

New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.

New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.

Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.

Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”

The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.

Zero net emissions by 2050

Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.

Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.

She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.

Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”

A worldwide shift to renewable energy

Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.

Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.

Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.

Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.


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